Financial Daily from THE HINDU group of publications
Friday, Sep 20, 2002
Global operations to drive Asian Paints' sales
MUMBAI, Sept. 19
INTERNATIONAL operations of Asian Paints are expected to witness a five-fold increase in turnover to around Rs 500 crore over the next two years, primarily on account of the recent acquisitions overseas.
"This year we expect a turnover of Rs 95 crore from our international operations against Rs 70 crore last year. We expect the turnover to go up to Rs 500 crore over the next two years,'' Mr Jalaj Dani, Vice-President - International, Asian Paints (India) Ltd, said. During the current year, the international operations will fetch profits to the tune of four per cent of the turnover, he said.
Asian Paints is in the process of acquiring controlling stake (50.1 per cent) in the Singapore-based Berger International Ltd (BIL). This process is expected to be completed by October end.
Last month, the company acquired 60 per cent stake in a paint unit in Egypt.
The company, which has been on an acquisition spree, will be focussing on its international operations. "We will build on the existing international operations,'' Mr Dani said when queried on the possibility of any further overseas acquisitions.
The company has a presence in Nepal, Mauritius, Oman, South Pacific (Vanuatu), Tonga, Solomon Islands, Australia, Sri Lanka and Bangladesh. With the acquisition of BIL, the company's geographic spread increases further as BIL has operations in 11 countries including China, Singapore, Thailand, Malaysia, Myanmar, Bahrain, Malta, United Arab Emirates, Jamaica, Barbados and Trinidad & Tobago.
According to Mr Dani, Asian Paints' decision to go in for international acquisitions was primarily to hasten the company's strategy to go global.
With the BIL acquisition, Asian Paints will not only have an access to newer markets but also gain a capacity addition of 50,000 tonnes taking the total capacity to 100,000 tonnes.
According to an analyst, the contribution from turnover of Asian Paints' international operations will rise to 20 per cent from the current level of five per cent following these acquisitions.
For the year 2001-02, Asian Paints (India) Ltd reported a turnover of Rs 1,655 crore and net profit of Rs 115.33 crore.
The company is expected to outperform the domestic paints market in the current fiscal too. During 2001-02, Asian Paints' net sales grew by 9.98 per cent against a seven per cent growth in the paints market.
According to Asian Paints officials, erratic monsoon could impact offtake of paints marginally. However, the main demand season for paints has just commenced in India.
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