Competitive landscape of the Indian paints and coatings industry?  

There is a paradigm shift in the paint industry, prompting a lot of companies to jump into the fray. The scope and scale for paints and coatings business in India is huge as per capita consumption is at 3-4 kg per annum as compared to 15 kg in developed countries. Moreover, there are four stages of transformation that have happened in the Indian economy. These are digitalization, formulation, structural change and sustainability, ESG or SDG. Within these four structures, there is a huge amount of indigenization happening along with increasing usage of digital platforms at all levels. People are aware of the situation across the world. There is transparency and clarity with respect to the consumers’ mind making the paint company more agile & Flexible. Market is extremely volatile and uncertain, complex and ambiguous. In this particular scenario, if one needs to survive then one's mindset needs to match with the industrial mindset. Organizations need to develop a situation based strategy to combat the uncertainty and should be based on flexibility & adaptability.  

Strategy India should adopt to become a global manufacturing hub for paints and coatings? What role Berger sees for itself in making India a global hub?   

People are already thinking of India as a global hub due to transformation. We are third in unicorn in the world after the USA and China. India has huge intellectual capital and talents are available at a much cheaper rate. There is a thrust from the government on Atma Nirbhar Bharat, Make in India and Vocal for Local initiatives. We have self-belief and mindset that we can do this. The ‘can do attitude’ and the ‘never say die spirit’ is making India more vibrant, tolerant and progressive. Similar factors are applicable for the paint as Indian infrastructure, defence and many other sectors are preferring Made in India products. There is a need to develop innovative technology or tie up with someone who is having technology to get it produced in India. In this process, we will also learn and hence the knowledge base will increase in terms of technology and manufacturing facilities.  

What is India’s current status in the global paints and coatings market and where do you see it going forward?  

It is very good to see Indian companies already in the Global Top 20 list. We are Number 14 in the world and there are other giants also there in the Top 20 global list. We are number two in the country, fourth in Asia and in Protecton (Heavy Duty Protective Coating), we are by far the market leader. In December 2023, we crossed 100 years of our existence and celebrating the Centenary year and Berger is the fastest growing paint company in the country. Our major thrust is on value innovation and ease of usage of our paint to the customer.  We believe in quality, reliability and delivery. It is not only product innovation but also innovation in process and marketing tools. Innovation is our basic theme in the whole scheme of thoughts. 

What's the total size of Protecton business globally and in India? What's the market share of Protecton?  

It is very difficult to share exact market size of Protecton because any surface which is prone to corrosion be it concrete or steel, needs protection. Protecton market in India, particularly for heavy duty protective coating, is around Rs. 5,500 - 6,000 crore in India. Berger Paints market share is approximately 25 percent. 

How has Berger Paints and Protecton business performed in FY 2023-24? 

All the major paint companies which were not there earlier and also the existing companies that are not focusing on Protecton have increased their focus because they realized the growth potential. Even the Government of India is spending a huge amount of money in terms of infrastructure, especially the Gati Shakti initiative and huge expansion on railways, ports, airports etc. There is a 5% increase in the Railway Budget and there is a huge amount of focus in the airport sector. Wherever infrastructure is there, be it roads, factories, boats, shipbuilding, airports and railways, the construction and protection chemicals are used. Railway itself is a huge investor .; there is a huge amount of investment in designing the bullet train, bullet train stations and lots of other activities. Opportunity for Protecton is extremely huge and everybody can have some pie. We have prepared very well to catch the bus. Hopefully, we will achieve a good number in 2024-25 and last FY we crossed Rs. 1,000 crore.  

Overall, the paint industry market was not so flamboyant because flow of money is little problematic despite opportunities. There were huge problems in the working capital flow and that's why the business was sluggish in the initial stage. There is a tremendous amount of innovation required to protect margin. Hence, the past two quarters were not that good and hopefully we will be covering up in the third and fourth quarter. 

Orders bagged by Protecton business in FY 2023-24? What portion of it comes from overseas? Any plans of expanding business outside India?  

We have bagged huge orders and among all such orders, we are basically focusing on non-conventional energy. We have received big orders from Reliance Industries through the PV, like Kilby and others. We are very much focused on railway sectors and have got the first two orders of bullet train stations. We are also going to get more orders for bullet train stations as well as bridges. Again, we expect orders coming from marine segments through our partners. There is also business coming from new sectors. We got good business from Indian Oil. We have done our first venture in ONGC also. Moreover, we have done well in the power sector, be it nuclear power, thermal power, hydel power and non-conventional like solar power and now focusing on wind power as well. As far as the chemical sector is concerned, we are working very closely in segments wherever there is a high level of corrosion. We are focusing on construction chemicals like floor coating, admixtures, grout and sealant. These sectors are equally important and growing in the same way as infrastructure. Having a leadership and good relation with the customers, we are also trying to push these segments as well and that will be another good driver for us in years to come. 

Countries that Protecton is focusing on currently and countries where you are planning to expand?  

We are already present in Nigeria and have executed business in Kenya and Mauritius. We have our own plant in Russia. Also, we are having a presence through our subsidiary in Europe. We are present in Bangladesh and Nepal. While we are already there in a number of countries, we are now looking at taking our business to other countries in Southeast Asia, Saudi Arabia and African countries and further explore Europe. There is a huge amount of scope and we are exploring it. 

What's Protecton business plan for FY 2024-25 and how are you planning to execute it?   

We are growing at a CAGR of 17% since 2017. From a turnover of Rs. 349 crore, we will be closing FY 2023-24 at Rs. 1,100 crore and by FY2026-27, will be definitely crossing Rs. 2,000 crore. We have a strong focus on the dealer segment and we have to focus on the infrastructure segment. Third one is the new margin sectors like construction chemicals, admixtures, and flow coating. Export is the fourth pillar among key drivers to take our business to the next level.  

55 percent of our business comes from the dealer network and it is helping us to grow. This is not a normal dealer network as they are acting as a partner to us. All business is routed through them so that our reach can be enhanced further. Our money is safe because the dealer is paying us much faster than the customer, hence, it is a joint growth as the business will grow while customers are better serviced. One has to take care because our business is not about just selling the product but offering solutions to customers through a very close collaborative approach. I strongly believe in 3Cs - Collaboration, Communication, and Commitment to customers. Our customers are always looking for affordable and quality solutions and they are aware that Berger can deliver. Customers prefer us because we work with them at the ground level and this has helped us to maintain a leadership position year after year. 

Number of plants catering to Protecton business and what's the total production capacity? Are you planning to enhance your production capacity this year?  

We are currently catering our business through five plants. In total, we have 17 plants in the country and out of that five plants are dedicated to Protecton. We have set up a Shandilya plant in March 2023 and we are also planning to put more plants in West Bengal. We have acquired 30 acres land in Banagher in Orissa to set up another plant dedicated to the industrial business. This state-of-the-art plant is not just for the decorative paints but also dedicated to construction chemicals as well. We are also enhancing the capacity of our existing plant to cover the increased demand in the market. 

What are the new innovations you are planning within Protecton R&D facilities? How will these innovations help in maintaining leadership positions? 

We always do something which is not in the market. For example, we have come with water based asphalt coating which has been supplied to the pipe coating segment in the USA. It is a very unique product and no one could make it in India. And for this reason, the plant itself shifted their base from China to India to get the material cost drastically reduced. The product quality is fabulous and we are creating new opportunities for the company by providing the best product. We have got an award from the railway division for upgrading the product and service through a new innovation called process innovation. We are closely working with the Railway Board and RTSO. Major focus in our whole journey and years to come are railways, airports, army, navy, ports and airports.  

How does Protecton Consultancy division help businesses in providing complete solutions? What is its USP?  

Our consultancy team which is now called the business development team works with the customer to find an exact solution at an affordable price. They do the corrosion audit to find out which plant requires what type of solutions. They make a full-fledged report and provide a unique solution to them. Our team analyses whether there is a lag in the process and application or there is a lack in recommending the painting system. We address the both and recommend AMC and maintenance contracts to customers. We assure them about taking care of issues while they focus on the process or production. It actually gives a really strong mileage to us over others. We are also part of a joint effort along with the CII team to save national assets, 4% of which are being wasted for non-mitigation of corrosion damage. 

As far as application is concerned, the company is using artificial intelligence (AI) to produce a unique product, Skill Berry in collaboration with IIT Madras. This patented product has been tested by our Prime Minister. This initiative helps in training unskilled painters and turning them into skilled painters which is ultimately helping us to give a long time durability of the existing painting system which in turn helps drive sustainability. If you need to have a long term sustainability goal, SDGs 17-point score, corrosion covers 12 points out of 17. These are being covered here and ultimately helps us to address Sustainable Development Goal 2020 through long term solutions. 

How does Protecton technology collaboration help industries and tie-ups that you have made till date?   

We have tied up with Chugoku Marine Paints for marine paints because of their global expertise. We have come with a new product called Polyurea which is extremely new, unheard of in India and comes from VIP Coatings, Germany. And, we are having tie up with PROMAT, Belgium in terms of fire-coating paint to save the structures from the fire through luminescent paint and refinery through Vermiculite paint. We are going to make a lot of other tie ups as the talks are going on with various organizations in innovative areas of application which are not there in the country. 

How do you incorporate ESG in your operations and business? 

We are incorporating ESG at every stage and have got so many awards by taking these initiatives. The important thing is that we don't need to discharge anything outside our premises. We are having a lot of innovative ways of making waste to wealth and in this regard we are working with IIT Kharagpur and going to have tie up with IIT Kanpur. We are working to save the mother earth and meet sustainability as well as ESG goals.