Date:07/09/2006 URL: http://www.thehindubusinessline.com/2006/09/07/stories/2006090703630300.htm

Back ICI Paints to spend Rs 1,500 cr on buys

Our Bureau

Keen on organic and inorganic growth

MR RAJIV JAIN, Managing Director, ICI India Ltd, at the launch of Inspira emulsion paint in Bangalore on Wednesday. — G.R.N. Somashekar

Bangalore , Sept 6

ICI Paints has lined up Rs 1,500 crore for acquisitions to grow its business in India. Mr Rajiv Jain, Managing Director, told newspersons on Wednesday: "We have the capacity of up to Rs 1,500 crore to acquire."

He added that ICI has around Rs 500 crore in cash and can raise another Rs 1,000 crore for acquisitions.

ICI will look at both organic and inorganic growth to increase its market share, which is currently at 15 per cent. It has identified paints, starch and adhesives and fragrance as its core businesses.

According to Mr Jain, ICI's revenues touched Rs 1,000 crore last year and the company expects revenues to grow 20 per cent this year.

The decorative paints business is currently growing 13-14 per cent, mainly fuelled by the real estate boom in the country. Because of the rise in petroleum prices, input costs have gone up. ICI plans to increase prices of some of its products by 2-3 per cent in October. It had recently increased the price of some of its products by 2-3 per cent.

Mr Jain said that ICI is looking at more opportunities in the food starch market and is waiting for certain changes in food laws for it to expand its business. Currently, the food starch business accounts for 10 per cent of the total revenues.

ICI produces 60 million litres of paints every year and has doubled the capacity at its three plants in three years. It expects to invest Rs 15 crore in capex this year. The company has launched Inspira, the country's first four wall super premium emulsion paint, which costs Rs 986 per litre. The company expects to launch more such paints soon.