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Shalimar Paints has seen three ownership changes

Anand Adhikari     June 23, 2011
Shalimar's lunch used to be the cynosure of all eyes in Calcutta corporate circles," begins 48-year-old Sandeep Sarda. Sitting comfortably at Shalimar Paints' corporate office in Mumbai's suburban Andheri, Sarda, Chief Executive Officer, says the company was run like a British company till the 1960s. The managing director and a number of other managers were all British. The corporate office shifted from Kolkata in early 2000, after its last ownership change, when it was taken over by the O.P. Jindal Group, "The lunch used to be an 11-course one with drinks and dessert," he says. Sarda is yet to assimilate all the historical facts about India's oldest paint company, having joined it only in 2000 after working in Pune for Force Motors, He found out quite a bit though, when the paint major was planning to celebrate its centenary in 2002.

1902 The world's first movie theatre opened in Los Angeles. In China, Empress Tzu-hsi banned the cruel practice of binding women's feet

"I myself sometimes wonder what actually kept Shalimar Paints going for over a century," he says and offers an explanation in the same breath, "I'm sure ethical business practices and a strong foundation for the future must have played a role."

The history of Shalimar Paints is the history of the paints industry in India and also in South East Asia. Way back in 1902, two British nationals - A.N. Turner and A.C. Wright - sowed the seeds of a paint unit at Howrah, Calcutta (now Kolkata). "Imagine setting up a paint manufacturing unit with no raw material suppliers or distributors," stresses Sarda, sizing up the monumental task before the two entrepreneurs. In fact, the company still possesses the rights to mine raw material. For over a decade, Shalimar was the only Indian player which had imports coming in from the US and Europe. Ironically, even as the two world wars hit import supplies, the industrial activity they generated spiked the domestic market for paints. By then other foreign paint majors were also moving into Kolkata: Elephant Oil Mills, Goodlass Wall, British Paints and Jenson & Nicholson, among others.

Multinationals began wooing Shalimar for a buyout. The first change of ownership took place in 1928 when the UK-based multinational Pinchin Johnson & Associates took control of Shalimar. The company became part of Pinchin's parent, the Red Hand Composition conglomerate. Pinchin ran Shalimar for three-and-a-half decades till 1964, before International Paints Plc acquired Red Hand Composition.

What helped Shalimar while it was under the two multinationals' control was its strong footprint in the industrial paints segment. It gained access to high-end technology in the industrial coating segment, especially in areas like aviation coatings, marine paints and the painting of thermal power plants.


1902: Two Britons - A.N. Turner and A.N. Wright - set up Colour & Varnish Company in Howrah, West Bengal. It is the fi rst paint manufacturing plant in the South East Asia

1928: UK-based Pinchin Johnson & Associates acquires Shalimar Paint Colour & Varnish - its new name - and makes it a part of its Red Hand Composition Company

1961: Shalimar Paints becomes a public limited company

1964: International Paints acquires US-based Red Hand Composition. Ownership changes hands again

1973: Problems surface with the FERA regulation as the company is majority owned by foreigners

1989: Company sold to O.P. Jindal Group and the Jhunjhunwalas. Both jointly manage the company

2003: Acquires the American Paints unit in Sikandrabad near Delhi

2008: Enters into technical collaboration with KCI, Korea for pre-coated metal coatings

In India, when it came to paint, Shalimar was the first name on everyone's lips. While he was President from 1989 to 1974, V.V. Giri even got the Rashtrapati Bhavan painted with Shalimar's paints. Shalimar was the brand of paint that coat many other iconic buildings, like the palaces of Bhutan and Nepal. Another feather in its cap has been its uninterrupted track record of painting the Howrah Bridge. "We have been painting Howrah Bridge right from 1948/49," says Sarda. The bridge is painted after every eight to 10 years. "It takes almost a month-and-a-half to finish painting the aluminium pillars of the bridge," says Subhas Banerjee, Regional Head, East, Shalimar Paints.

Shaliamr Paints Howrah Plant
Paint is collected in drums at the Howrah plant for distribution.
The dilution of foreign ownership of Shalimar started when the Foreign Exchange Regulations Act, or FERA, was passed in the 1970s, which laid down that foreign companies could only be minority shareholders in Indian firms. Many foreign firms like IBM and Coca-Cola shut down their India operations, rather than dilute ownership. Shalimar, too, was hit. The owners soon lost interest in the company. In 1972, Shalimar tapped the capital market and foreign holding in the company fell to 60 per cent. It was during this period that other paint companies grabbed crucial market share.

In 1989, just before the liberalisation of the economy, Shalimar again changed hands with Indian promoters taking control for the first time. Shalimar was acquired by the O.P. Jindal Group with interests in steel, and the Hong-Kong based S.S. Jhunjhunwala Group, that ran businesses in real estate and hospitality. "By then the company was not at all in good shape," says Sarda. Asian Paints, Kansai Nerolac, Berger Paints and Akzo Nobel had already pushed Shalimar to fifth position in the market.

Undeterred, Shalimar embarked on a major effort to regain its past glory. "It was a struggle till 1997, but after that we picked up steam," says Sarda. The real growth for Shalimar came in the early 2000s when it started growing on the back of increased activity in housing, infrastructure and other core sectors.

An 11-course meal at the Shalimar Paints office.
An 11-course meal at the Shalimar Paints office.
To meet the growing requirement, Shalimar set up its first plant outside Kolkata in 1992 at Nashik, Maharashtra. Then, in 2003, it acquired a plant in Sikandrabad near Delhi. Today, it has a combined capacity of 57,000 tonnes of paint per annum. A fourth plant in Chennai is also expected to come up by April 2012 to produce another 18,000 tonnes a year. But the company still has a long way to go. It has a revenue base of Rs 400 crore, compared to the market leader Asian Paints' Rs 6,000 crore. Kansai Nerolac, US-based Sherwin Williams and a few others are all wooing Shalimar Paints for a buyout. A fourth change of hands in the coming months is entirely possible for this iconic brand.

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