Georgia-Pacific arm eyes new buys in India

Georgia-Pacific Resins Inc (GPRI), a subsidiary of US-based Georgia-Pacific Corp, may go in for inorganic growth in India.

The company made its foray in the country by entering into a joint venture with Kemrock Industries and Exports.

GPRI and Kemrock Industries recently announced plans for their upcoming joint venture for the production of thermosetting resins under the banner of Georgia-Pacific Kemrock International.

"In the first phase, we are looking at organic growth in India and at tapping the markets in the Indian sub-continent," said Peter Williams, vice-president, GPRI.

When asked whether the company would be acquiring any units in India, Williams said, "The inorganic growth is one of the possibilities that the company may look into, but initially we want to strengthen our base in India."

He elaborated by citing the 50-year-long history of Georgia-Pacific group, which has expanded mainly through inorganic growth. He said the company would be catering to the West-Asian markets, like the UAE, Bahrain, Saudi Arabia and Kuwait, along with the domestic market.

He added that the Indian domestic market is very large and needs to be tapped. When asked whether GPRI would cater to the East-Asian countries through its Indian facility, he said, "It can be possible in future as the Chinese joint venture facility is largely for the Chinese domestic use only while the Indian facility will cater to the domestic as well as overseas demand."

GPRI is a major supplier of thermosetting resins and chemicals used in building products, paper-making and speciality industrial applications. For the financial year 2005, GPRI had earned a revenue of $1 billion, while the total size of Georgia-Pacific is worth $80 billion.

"We are in pursuit of global expansion and this is the first step towards India. We need to find a partner to know the Indian market and explore it to understand the market better." said Williams.

The composite resins market size In India is worth $150 million, while in terms of volume, it is 1,50,000 tonne a year. The composite resins market is growing at 25 per cent a year.

Kalpesh Patel, chairman and managing director, Kemrock Industries, said, "The new joint venture is of Rs 40 crore and we are also working out future expansion plans. We are bringing various technologies from global leaders so that we can produce any kind of composite for our clients."

He emphasised that the company wants to be a outsourcing hub and all kinds of composite resins would be available under one roof.

Kemrock exports 80 per cent of its total production. The company registered a turnover of Rs 60 crore for the year 2005-06.

In the first quarter ended June 2006, the company earned turnover and net profit of Rs 30 crore and Rs 4.5 crore respectively.