Berger, Nippon to consolidate auto paints business in India

Berger Paints India Ltd and Japan’s Nippon Paint Automotive Coatings Company have agreed to transfer some of their automotive paints businesses to an existing joint venture.

The understanding is non-binding and subject to the two partners entering into definitive agreements, Berger said in a stock market disclosure on Tuesday.

The financial terms of the deal are yet to be finalized.

The move is part of the two companies’ efforts to strengthen BNB Coating India Pvt Ltd, their joint venture for manufacturing of coatings for plastic substrates.

As part of the initial agreement, Berger would transfer its three- and four-wheeler paints business – which includes passenger cars and sport-utility vehicles -- to BNB Coating. Nippon Paints (India) Pvt Ltd would transfer its four-wheeler paints business, other than commercial vehicles, auto parts, and ancillaries, to the joint venture.

Nippon Paints Automotive holds a 51 per cent stake in BNB Coatings and Berger owns the remaining. BNB is mainly engaged in the business of coatings for plastic substrate of automobiles.

In the financial year 2014-15, the joint venture recorded a net profit of Rs 4.46 crore. 

Kolkata-based Berger also makes industrial paints and consumer products including metal and wood paint, interior wall coatings, exterior wall coatings and clear coats for wood. It also provides colour consultancy services.

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