Publication
India gears up for coil-coating boom
Increasing affluence and swelling populations are fuelling a growing appetite for coil in India and her Asian neighbours. Beckers' advanced new coatings production facility in Goa is poised to serve this fast expanding market.
It all started in the mid 1980s, when Mr S.K. Sharma, owner of Osmic India, a small trading company, approached
Becker Industrial Coatings with an enquiry about a suitable coating for metal strapping (Signode). These were early days
for coil coating in India. After the traditional introduction of paint samples and delivery of a trial batch, Beckers was surprised to receive a firm order for a complete container of coil coatings (15 tonnes). Unfortunately, due to prohibitive import duties, this business could not be sustained. What these early contacts with the Indian market did do, however, was open Beckers' eyes to the potential of the market in general, and to the potential for coil coatings in particular.
Precoating gains momentum
By this time, Beckers had learnt about the "Shree Precoat" project from coil coating pioneer Mr Sihdanti, and had also established contact with "Nippon Denro" in Nagpur. Actually, the Shree Precoat project was bought and sold a number of times, before ending up under the management of the Ajmera family, an important Indian real-estate company.
Through the contact established with Mr Sharma, Beckers was able to develop a small coatings business for the appliance market in association with "Nippon Denro". At the time, "Nippon Denro" was the only company involved in coil coatings, although several companies were considering entering the market. Their hesitation may perhaps be attributed
to a natural inclination to allow others to discover the pitfalls first!
Towards the close of the 1980s, Garware Paint was on the lookout for a licence partner and approached Becker Industrial Coatings. In spite of the considerable effort invested in the venture, the partnership came to an end in 1992, when Garware Paint discontinued operations. In the meantime, however, Beckers' business relationship with Nippon Denro
developed steadily, and when Shree Precoat came online, Beckers became the new company's coatings supplier. This was to prove a turning point, establishing the necessary conditions for Shree Precoat's subsequent expansion. The company rapidly developed its export business, thereby avoiding the prohibitive import duties levied on paint purchased outside India, and dramatically improving profitability.
Everyone wants a piece of the cake
It was like opening a floodgate. Suddenly, several companies started making serious plans to enter the coil coating market. Jindal, Uttam and Bushan are just three companies that have already started operating in this fast expanding market.
Becker Industrial Coatings has always been quick to see the true potential of emerging markets, and these early contacts not only provided considerable insight into the specific conditions that apply to the Indian coatings market, but also permitted the development of close relationships with potential future customers.
In 1996, British Steel and Jindal announced a joint venture to meet their coil coating requirement, triggering Beckers' renewed interest in the potential benefits of local manufacture. The time was ripe for a major change in business strategy. From having focused on licensed production as the best way to become a local player on emerging markets, Beckers now started to look for a suitable partner. Assisted by the company's broad network of contacts established during the early years, Beckers eventually came into contact with Berger Paint India.
Following extensive negotiations, the joint venture with Berger Paint could finally be realised. Unfortunately, the British Steel/Jindal joint venture did not work out. Undaunted, Berger Becker Coatings started to manufacture coil coatings at Berger Paint's existing facilities in the Indian state of Goa.
From gloom to boom
The collapse of the planned joint venture between the two steel companies naturally created some anxiety, since the projected feasibility of a local manufacturing unit was based on the assumption that Beckers' strong tie with British Steel would secure a reasonable volume of or ders. Not surprisingly, initial volumes were modest, but the business grew steadily and, in 1995, the unit signed a contract with its first export customer – Hulas Industries, in Nepal.
By the end of the decade, it became clear that the Indian coil coating market was poised for major expansion. Uttam, Bushan and National Steel had decided to enter the market. The fact that several of these production lines were designed for really high capacity was an added bonus.
Becker Industrial Coatings originally entered the Indian market in the mid 1980s, at a time when the entire continent boasted only a single coil coating line. Since then, the pace of development has been impressive. In 2006, India will have no fewer than ten indigenous manufacturers of coil-coated sheet. Thanks to the growing appetite for coil coatings exhibited by India's neighbours, the region has become a really important market. Even so, if developments elsewhere are anything to go by, it is still "early days". When Becker Industrial Coatings decided to establish local manufacture of coil coatings in China in 1994, a mere four coil coating lines had been installed by the end of the year, only three of which were actually operational. Now, just twelve years later, China has almost 100 coating lines in operation!
Responding to the rapid growth of the Indian coil market, Berger Becker Coatings decided to invest in a new and much larger production facility on company-owned land in Goa. This new plant features state-of-the-art production and laboratory
equipment. Annual capacity, rated at 10,000 tonnes, will serve for years to come, and at 19,000 square metres, the site offers plenty of space for further expansion — if and when required.
A semi-automatic base blending system enables fast, accurate response for colour production. The product portfolio includes a full range of PVdFs, metallic and textured finishes, as well as polyesters, silicone polyesters, primers and backing coats. The plant serves all the main Indian pre-coating lines, as well as customers in Nepal, Bangladesh and Dubai.
Many dignitaries attended the inauguration of the new plant, among them customers, suppliers and state government officials.
In his inauguration address, Mr. R. Mehrotra, Berger Becker's Vice-President, explained the need for the new, larger factory.
"The coil coating market in India is growing rapidly. It has doubled in the past few years. Existing coaters are either increasing their line speed or thinking of starting another line. New players are entering the market with new coil lines. This new plant will enable Berger Becker to provide an efficient service to our customers as they grow."
Released: September 2006