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Berger International Reports First Profit in Last Six Financial Years

Published on 2004-02-26. Author : SpecialChem

Net Profit was S $ 2.2 mn (INR 58.04 mn*) on revenues of S $ 110.3 million (INR 2958.43 mn*)

Singapore, February 26, 2004 : Berger International Limited (BIL), Singapore, announced its results for the year ended December 31, 2003. The year under review has been significant for BIL. This was the first complete year since Asian Paints, Asia's fourth largest paint company took controlling stake in the company.

For the year ended December 31, 2003, revenues of Berger International Limited (BIL) decreased by 6.1 % to S $ 110.3 million (INR 2958.43 mn) as compared to S $ 117.5 million (INR 3150.95 mn) for the previous financial year. This was primarily due to the group's decision to reduce contracting sales and focus on manufacturing and distribution of paints. This was clearly evident, as volume of paints sales for the group increased by 13 % to 31.27 million litres from 27.75 million litres in the previous year. Gross profit for BIL was S $ 36.5 million (INR 979.21 mn) as compared to S $ 37.0 million (INR 992.45 mn), a marginal decrease of 1.3 %. However gross profit margin has improved to 33 per cent from 32 per cent for the previous year, due to various steps undertaken by the units to reduce material costs. Due to initiatives to reduce costs in other operational areas, profit from operations increased by 26.9 per cent to S $ 5.23 million (INR 140.32 mn) as compared to S $ 4.13 million (INR 110.62 mn). Net profit for the year before minority interests was S $ 3.1 million (INR 82.92 mn) as compared to S $ 0.6 million (INR 15.01 mn), an increase of 452.3 %. Net profits attributable to the shareholders of the company was S $ 2.2 million (INR 58.04 mn) as compared to a loss of S $ 1.1 million (INR 28.66 mn) in the previous year.

Commenting on the results, Mr. Jalaj Dani, Chairman, Berger International Limited mentions "For the first time in the last six financial years, Berger International Limited reported profits. The emphasis during the year, was to drive operational efficiencies through material cost optimisation, control on overheads, financial restructuring to reduce interest cost, reduction in inventories and minimising investment in fixed assets. Initiatives in the area of supply chain management, manufacturing, marketing and technology was undertaken across most subsidiaries to build a strong foundation that would propel growth for the group in the years ahead"

The focus for the group in this financial year was to lay a solid foundation, which would enable growth for the company in the years ahead. The group has been in the process of studying all its systems and policies at all its subsidiaries. The idea is to institute an operating model for each of the subsidiary and make each self- sufficient in all areas of operations. Asian Paints, Asia's fourth largest company, which has a controlling stake in the group has given the group and its subsidiaries access to all its resources and is also assisting the group to implement initiatives to bring greater efficiencies across all subsidiaries. Below are some of the initiatives undertaken in the last financial year that has helped the company achieve profitability:

Leverage the group's strengths for sourcing efficiencies to reduce material cost

Initiatives in supply chain management to reduce inventory

Focused on understanding all aspects in the markets

Regional Technology Centres and Lead Technology centres have been instituted

Focus on transparency and accountability

Improve supply chain & thus reduce working capital

Council of Supply Chain experts have been formed

Implement cost structures for increased plant efficiencies, better overhead management & increased asset productivity

* Only for ease of conversion, 1 Sing Dollar = INR 26.81 for 2002 & 2003, Rate as on December 31, 2003

About Berger International Limited

Berger International Limited operates in 11 countries across the world viz Singapore, Malaysia, Thailand, Myanmar, China, Malta, Bahrain, UAE, Jamaica, Trinidad and Barbados. It has manufacturing facilities in all these countries. Incorporated on 3 December 1993 as a private limited company, BIL was converted into a public company in 1994. In November 2002, Asian Paints (India) Limited acquired controlling stake in the company. Through its operating subsidiaries and associate company, the Group is engaged in the manufacture and distribution of paints and has manufacturing plants in Singapore, Malaysia, Thailand, Myanmar, China, Malta, Bahrain, UAE, Jamaica, Trinidad and Barbados. The company is the leader in four countries

Source: Asian Paints

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