Berger Paints Bangladesh Limited
Summary
- Berger Paints Bangladesh Limited has been involved in business in this part of the world since 1950.
- In December 2005, Berger Paints Bangladesh Limited offloaded 5% shares to the public and got listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).
- Berger Paints Bangladesh Limited has one subsidiary namely Jenson & Nicholson (Bangladesh) Limited. The company owns 100 percent shares of Jenson & Nicholson (Bangladesh) Limited.
- The financial year of the company ends on 31 March of the year. The company has generated a revenue of Tk 1,666.98 crores for the year 2020-2021, which was Tk 1,621.90 crore (a 2.78% increase year-on-year).
- Net profit of the company for the year has been Tk 254 crore which was Tk 229 crore, a growth of 10.92%.
- EPS is Tk 54.96, latest P/E ratio is 30.23, NAV per share is Tk 213.26.
History of Berger Paints
Berger is one of the oldest paint solution providers in the world. The history of the company dates as far back as 260 years. Louis Berger, a German national, founded a dye and pigment-making business in England in 1760. Louis Berger & Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship, culminating in perfecting the process of making Prussian-Blue, a deep blue dye– a colour widely used for the uniforms of many European armies. Production of dyes and pigments evolved into production of paints and coatings, which till today, remains the core business of Berger. The company grew rapidly by establishing branches all over the world and through mergers and acquisitions with other leading paint and coating manufacturing companies.
History of Bangladesh Operation
Berger Paints Bangladesh Limited has been involved in business in this part of the world since 1950. Initially, the company imported paints from Berger UK and subsequently from Berger Pakistan. During that time, the company was known as Jenson & Nicholson. In 1970, J & N set up a paint factory in Chittagong. Initially, there were three shareholders of the company –
- Jenson & Nicholson
- Duncan Macneil & Co. Limited
- Dada Group
After independence of the country in 1971, Dada Group vested its shares to the government. Name of the company has been J & N (Bangladesh) Limited until it was changed in Berger Paints Bangladesh Limited on January 1, 1980. However, J & N Investments (Asia) Limited remained the owner of the company and reinforced its position by purchasing the Government shares in August 2000. Then in December 2005, Berger Paints Bangladesh Limited offloaded 5% shares to the public and got listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).
Company overview
Corporate profile
Berger Paints has invested heavily in research and development (R&D). The company purchases its raw materials from some of best-known brands in the world such as ExxonMobil, DuPont, BASF, BYK, Cristal, and Shell. The company has built a strong distribution network all over the country. The dealer network of Berger is located in all the major cities of the country including Dhaka, Chattogram, Rajshahi, Khulna, Bogura, Sylhet, Cumilla, Mymensingh, Barishal, Rangpur, Feni, and Brahmanbaria. The company has expanded its operation by forging a joint venture with Becker Industrial Coatings Holding AB, Sweden to form Berger Becker Bangladesh Limited, which produces coil coatings. Berger Fosroc Limited is another joint venture with global leader Fosroc International Limited to cater world-class construction chemicals to Bangladesh. Berger Paints Bangladesh Ltd. and Chugoku Marine Paints Ltd of Japan have entered into an agreement for the manufacture of marine and related industrial paints in Bangladesh. Berger is the first Bangladeshi company to manufacture such world-class marine paint products in the country.
Shareholding position
Of the total 46,377,880 shares outstanding of the company, J&N Investments (Asia) Limited holds 95%. The rest of the shares are held by institutional investors and individual investors. Bangladeshi and foreign institutional investors hold 3.73% and 0.13% of shares, respectively. Individual investors from Bangladesh hold 1.14% of the shares (number of shares equal to 526,417) and from foreign countries hold 0.01%. A summary of the shareholding position of the country is given below –
Product range
Product range of Berger Paints Bangladesh is given in the following list –
- Decorative paints
- Specialized outdoor paints to protect against adverse weather conditions
- Color bank
- Superior marine paints
- Textured coatings
- Heat resistant paints
- Roofing compounds
- Epoxies
- Powder coating
The company has introduced three new product lines as follows –
- WeatherCoat AntiDirt Supreme
- Fireguard Fire intumescent coating
- Breathe Easy Eco Series
The last product series is meant to contain green biocides that ensure an environment free from bacteria and has no VOC.
The segmentation of the products based on their usage structure is listed below –
- Interior
- Exterior
- Enamel Paints
- Illusions
- Wood Coating
- Marine Paints
- Adhesive
- Powder Coating
- Textile Auxiliaries
- Special Products
- Undercoats
Some of the brands of the company are listed below –
- Breathe Easy ViraCare
- Easy Clean
- Luxury Silk Metallic Finish
- Durocem
- WeatherCoat AntiDirt LongLife
- WeatherCoat Biowash
- Robbialac Synthetic Enamel
The company offers textile printing binders and finishing agents under the Texbond brand. Construction Chemicals is another diversification for Berger. The company has recently launched Express Painting Tools for faster, cleaner, and better painting work and introduced Express Painting Services for one-stop painting solutions. Recently, Berger has introduced printing ink in its portfolio.1
Amid the pandemic, the company has launched a sanitizer product namely Berger Expert Sanitizer which has a target to help people maintain hygiene and to curb the infection rate.
The company has a ‘Paint Express Service’. The service offer includes skilled painters painting the houses for the clients. The company mainly position this service as the solution to painful dust.
Mission and vision
Mission of the company is to increase turnover by 100 percent in every 5 years and to remain a socially committed ethical company. Vision of the company is to be the most preferred brand in the industry ensuring consumer delight.
Subsidiary of Berger Paints
Berger Paints Bangladesh Limited has one subsidiary namely Jenson & Nicholson (Bangladesh) Limited. The company owns 100 percent shares of Jenson & Nicholson (Bangladesh) Limited. The subsidiary was established in 1990 and involved in the Metal Container’s business in Bangladesh since 1995. JNBL had set up the factory at Chattogram and extended its second unit at Dhaka. Over the decades, JNBL has evolved to become the leading Metal Container manufacturer in the country and has diversified into Paint, Lubricant oil, Engine oil, Hair oil, and Food Grade container. Recently, JNBL has also invested in Fancy Container manufacturing, which is the first ever in Bangladesh.2
Dividend Distribution Policy
Bangladesh Securities and Exchange Commission (BSEC) requires the listed companies to disclose Dividend Distribution Policy. Basically, Berger Paints Bangladesh distribute dividend according to the regulatory requirements but keeping in mind the profitability, liquidity, leverage ratios, and future opportunities for growth. The company goes with the decision of the board on dividend. It can distribute dividends from accumulated profits of the previous years. The dividend can be interim and final. The company considers the followings in declaring dividend –
- Distributable surplus available as per the Companies Act, Listing Regulations and other applicable regulations and directives.
- The Company's liquidity position and future cash flow needs
- Track record of Dividends distributed by the Company
- Pay-out ratios of comparable companies
- Prevailing taxation policy and legal requirements with respect to Dividend distribution
- Capital expenditure requirements
- Stipulations/ Covenants of loan agreements, if any
- Macro-economic and business conditions in general
- Any other relevant factor that the Board may deem fit to consider
The company can distribute less dividends to pile up retained earnings to do the followings –
- Organic growth needs including working capital, capital expenditure, repayment of debt, etc.
- Inorganic growth needs such as acquisition of businesses, establishment of joint ventures, etc.
- Buyback of shares subject to applicable limits
- Payment of Dividend in future years
- Issue of Bonus shares
- Any other permissible purpose
However, when the company has not generated adequate profit, believes that the company has significant avenues of generating greater profits by using the funds rather than giving away as dividends than the shareholders can, it may decide not to declare dividends.
Industry Analysis
The paint industry in Bangladesh has about 45 players with a market size of Tk 3,700 crore as of 2019.3
