World Cup boosts Berger Paints’ Rus­sian ven­ture

Business Standard - - COMPANIES - AVISHEK RAK­SHIT

Berger Paints In­dia is con­sid­er­ing ac­qui­si­tion of com­pet­ing paint com­pa­nies in Rus­sia af­ter the 2018 FIFA World Cup. The tour­na­ment has in­stilled it with fresh hopes to scale up the loss­mak­ing op­er­a­tion in Rus­sia.

Its Rus­sian sub­sidiary part­nered a local firm to paint three World Cup foot­ball venues — Ros­tov Arena, Vol­gograd Arena and Kalin­ingrad — apart from two air­ports. This led the sub­sidiary to reg­is­ter a breakeven in prof­itabil­ity in this fi­nan­cial year. “We have 1,000 tonnes a month ca­pac­ity plant at Krasnodar in Rus­sia and the ca­pac­ity util­i­sa­tion stands at 35-40 per cent. But we are eye­ing ac­qui­si­tions there,” Ab­hi­jit Roy, manag­ing di­rec­tor and chief ex­ec­u­tive of­fi­cer, said.

Roy said firms hav­ing a de­cent brand good­will, strong dis­tri­bu­tion struc­ture and ca­pa­bil­i­ties in local re­search and devel­op­ment would be tar­geted for ac­qui­si­tion.

Out of its three for­eign sub­sidiaries in Poland, Nepal and Rus­sia, the lat­ter had re­mained the weak­est by reg­is­ter­ing low rev­enues at ~7080 mil­lion. How­ever, with the new con­tracts, its rev­enue is pro­jected at ~150-160 mil­lion.

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