Berger Paints plans to acquire speciality paint company

July 29th, 2010 - 9:08 pm ICT by IANS  

Kolkata, July 29 (IANS) Berger Paints India is in talks to acquire a speciality paint company, a top company official said here Thursday.
“The board will discuss the offer… the deal is still at a preliminary stage and due-diligence is yet to start,” Chairman K.S. Dhingra told reporters on the sidelines of the annual general meeting of the company.

The company has appointed consultant Ernst & Young for the deal, he said.

He did not divulge any further details about the acquisition.

The company would invest around Rs.250-300 crore over the next five years in doubling capacity to 500,000 tonne by setting up green-field and brown-field projects, he said.

The paint company would invest Rs.125 crore into setting up a greenfield paint plant in Andhra Pradesh, which would produce 150,000 tonne a year of water-based decorative paint. The remaining amount would be spent for capacity augmentation at Rishra plant in West Bengal by 60,000 tonne, at Goa by 72,000 tonne and at Jammu by 1,000 tonne, managing director Subir Bose said.

The company’s profit after tax grew by 30 percent from Rs.28.38 crore in the first quarter (April-June) of last fiscal to Rs.37.02 crore during the corresponding quarter this fiscal (2010-11).

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