As for Berger Paints, he says they’re making substantial investments to extend manufacturing capability via each brownfield and greenfield expansions. Edited excerpts:
The Financial Occasions (ET): How has the unorganised paint sector remodeled up to now century?
Abhijit Roy (AR): The Indian paint market — valued at practically Rs 70,000 crore — is basically pushed by just a few main corporations. Nevertheless, the entrepreneurial spirit of the unorganised sector has performed a vital function within the business’s progress over the previous century, now accounting for about 20% of the market. Small and medium-scale producers have been key in increasing the attain of paint merchandise into underrepresented markets. Whereas formalisation has elevated after demonetisation and GST, India’s huge panorama nonetheless affords alternatives for well-managed smaller gamers, particularly in industrial paints the place sooner response is valued quite a bit. Smaller gamers could deal with particular product segments to run their operations extra successfully.
ET: Berger Paints crossed Rs 10,000 crore in gross sales in 2023. The place does the corporate go from right here?
AR: Berger Paints closed the fiscal 12 months 2023-24 with a consolidated gross sales turnover of Rs 11,199 crore, positioning us because the fifteenth largest paint and coating firm globally. Our overarching enterprise technique stays clear — to drive worthwhile progress. This can necessitate continued growth of our distribution community, the creation and progress of revolutionary and worthwhile manufacturers, rigorous value administration to safeguard our margins, and a relentless deal with expertise growth.
We’re concentrating on the subsequent vital milestone of Rs 20,000 crore in gross sales by 2029. To help this ambition, Berger is making substantial investments in rising manufacturing capability via each brownfield and greenfield expansions. Plans are underway for the development of vegetation at Kalibeti Industrial Park in Odisha, and Panagarh in West Bengal.
ET: How does Berger Paints goal to reinforce its footprint within the southern markets? Do excessive climate situations within the area pose a problem in establishing a deep attain there?
AR: The paint market within the 5 southern states is a vital one for us, and we have now a sizeable presence there, particularly in states like Kerala and Andhra Pradesh. Every of those states have distinct traits that decide our technique for every state. The widespread factor is that all of them provide nice alternatives for progress, with some being extremely urbanised and industrialising quickly. We now have glorious paint and water-proofing merchandise which might be tailor-made to fulfill the necessities of those markets, together with these of coastal and excessive rainfall areas. Aside from the commerce channels, customers and painters in these states have reposed their religion on these merchandise. The in depth shoreline brings with it excessive ranges of moisture and salt, which contribute to corrosion, making it important for paint utilized in these areas to serve a protecting operate. A lot of the southern states have extreme rainfall which brings with it the requirement for sturdy waterproofing of buildings. Berger has a powerful portfolio of merchandise in building, chemical compounds & waterproofing that serve the wants of customers right here.
ET: How did the actual property market and infrastructure developments impression the paints companies within the present fiscal 12 months?
AR: The demand from the actual property sector mixed with the continuing infrastructure growth is poised to stay sturdy not solely within the present fiscal 12 months but in addition properly into the long run. This optimistic outlook is pushed by the anticipated completion of quite a few large-scale initiatives and elevated authorities funding in inexpensive housing and infrastructure.
The federal government’s current dedication to assemble 30 million inexpensive properties over the subsequent 5 years below the PM Awas Yojana — along with the 40 million homes at the moment below growth — may have a major and lasting impression on the Indian paint business. This bold initiative underscores the numerous progress alternatives, positioning us to capitalise on the rising demand and contribute meaningfully to those transformative initiatives.
The true property market can be trying up in all main metros and it’s believed that this cycle will proceed for the subsequent few years. This could assist push up demand for paints and building chemical compounds.
ET: What’s the proportion of uncooked supplies Berger Paints has sourced from MSMEs within the present fiscal 12 months?
AR: In FY 2023-24, Berger Paints immediately sourced 11% of its enter supplies from MSMEs and small producers, reflecting its dedication to fostering partnerships with smaller enterprises. Popularity for constant high quality, well timed provide, aggressive pricing and locational proximity to our manufacturing areas play an vital function in serving to Berger determine on getting into right into a contract with any MSME.