asian paints

PRESS RELEASE

Corporate Communications: Asian Paints House, 6A Shanti Nagar, Santacruz (E), Mumbai 400055, India.Tel : +91-22-5695 8549 / 8548 Fax : +91-22-5695 8805 Email : [email protected]

Asian Paints announces strategy for growth.Berger International to pioneer growth for the company

in its international operations.

December 13, 2002 - Asian Paints Limited (“Asian Paints”) is transforming itself tobecome a major world player in the decorative paints business with particular focuson emerging markets following its acquisitions of controlling stakes in BergerInternational Limited (“Berger International”) of Singapore and SCIB Chemical S.A.E.(“SCIB”) of Egypt. The total investment made by the company in both theseacquisitions amount to around US$ 16.8 million (S$29.6 million).

Asian Paints announced that it would focus on emerging markets of the world forgrowth and also that Berger International will be the main growth driver for AsianPaints’ international operations.

“Following the acquisitions this year we are among the top ten decorative paintcompanies in the world ” said Mr. Jalaj Dani, Head of international operations ofAsian Paints and newly appointed Chairman of Berger International. “The emergingmarkets has 50% of the world’s population and this is where we see the potentialupside as we seek to draw more efficiencies out of the acquisitions we have justcompleted,” he said in a statement.

Focusing on the aspect of increasing shareholder value in BergerInternational, Mr. Dani said: “In Berger International, Asian Paints will focus toincrease shareholder value by further improving the supply chain management in thesubsidiaries (Asian Paints’ supply chain management is considered the best in Indiaservicing around 14,500 dealers directly from 70 sales locations and manufacturing over2,500 stock-keeping units (SKUs).

“Further, the company will implement cost structures in Berger’s operationsworldwide for increased plant efficiencies and increased asset productivity. It willfocus to improve working capital management through various initiatives andintroduce information technology in areas of operations where essential.

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Asian Paints will innovate and develop new products for the individual units of BergerInternational to boost top-line sales. We are confident that all these measures willreflect positively on the operations of Berger International,” he added.

He further added: “Besides the acquisitions in Singapore and Egypt, Asian Paintshave just commissioned in September ’02 a new greenfield venture in the fast-growing Bangladesh market. This is Asian Paints’ largest greenfield venture. Low percapita consumption of paints in Bangladesh, vast potential to upgrade the market,limited product range, increased urbanisation and consistent GDP growth have beensome of the reasons for Asian Paints entering into this market.”

Asian Paints had announced that the six-month results for the Mumbai-based parentcompany for the period ended September 30, 2002. The company posted revenuesof Indian Rupees (INR) 7237.73 million (about S$259 million), an increase of 15.9 %over the corresponding period of the previous financial year. Net profit for thecompany increased by 42.0 % to INR701.38 million (about S$25 million). EBDITincreased by 33.4 % to INR1407.21 million (about S$50 million). Market share gains,margin improvement, improved efficiencies and good growth in new products havebeen some other major achievements in the performance of Asian Paints for the firstsix months of the financial year.

On the international front, the company has made forays in 13 countries in the lastfour months through Berger International (11 countries), SCIB Chemical, Egypt andBangladesh (greenfield venture).

On October 24, Asian Paints completed the Partial General Offer (PGO) of BergerInternational, taking a 50.1% stake in the Singapore Exchange-listed Company forS$20.8 million (US$11.8 million). This followed an acquisition of a 60%-stake inSCIB, Egypt’s fifth largest paint company, for US$5 million which was completed inNovember ’02.

Following the acquisitions, the enlarged group now operates in 24 countriesscattered over mostly emerging markets in South Asia, the Middle East,Mediterranean, East and South East Asia, the South Pacific and the Caribbean, withcombined paint manufacturing capacity in 27 facilities of 330 million litres per annum.

The immediate focus will be to turn around the operations of under-performing unitsof Berger International and add value from Asian Paints by improving efficiencies inoperations, manufacturing, distribution and introduction of new products.

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ABOUT ASIAN PAINTSAsian Paints is India's largest paint company with a turnover of INR16.56 billion(around US$ 340 million). The company sells over 200,000 MT of paint annually andis ranked amongst the top 10 decorative coatings companies in the world. It is alsoIndia's largest exporter of paints, exporting to over 15 markets in the Asia-Pacificregion, the Middle East, and Africa. After the acquisition of Berger InternationalLimited, the company would have 22 joint venture units with manufacturing facilitiesin all of these markets. It is the market leader in ten countries including India.

ABOUT BERGER INTERNATIONALBerger International is one of the oldest names in the paint and specialist coatingsindustry. Its history can be traced back to London in 1760, when Lewis Bergerfounded the business. Over the years, through mergers, acquisitions and theestablishment of operations in many countries, the business has grown in size andstature. The Company is the holding company of the Group's operations in the Eastand South East Asia, the Caribbean, the Mediterranean and the Middle East.

Incorporated on December 3, 1993 as a private limited company, BergerInternational was converted into a public company on March 31, 1994. Through itsoperating subsidiaries and associate company, the Group is engaged in themanufacture and distribution of paints. It has manufacturing plants in Singapore,Malaysia, Thailand, Myanmar, China, Malta, Bahrain, UAE, Jamaica, Trinidad andBarbados.

ABOUT SCIBWith 52 million Egyptian pounds (about S$20 million) in sales in 2001, SCIBCHEMICAL is one of the five largest paint producers in Egypt and considered bymarket watchers as dynamic and an innovative company. Established in 1978 by theprominent Moussa family, it was turned into a joint stock company in 1997 andbecame a subsidiary of United Paints & Chemicals (UPC) which is a 50:50 jointventure between Egypt’s giant Orascom Construction Industries Group (OCI) andthe Moussa Family, the Hafez Family and Mr. Badr Sednaoui. SCIB Chemical has amodern paint plant situated in the city of ‘6th of October’ that has a capacity of25,000 MT.

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Issued on behalf of the companies by WeR1 Consultants Pte Ltd, Singapore([email protected])

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