Indian paint industry

INDIAN PAINT INDUSTRY

Made by : Vikram Dahiya

Business Model

Association with following people is involved:

• Channel Partners

• Painters

• Contractors

• Decorators (Arch/ID)

• Builders / Developers


INTRODUCTION

The Indian Paint Industry has been growing at a rate of near

about 15% for the past few years.

The industry is estimated at around Rs. 21000 Cr.

The per capita consumption in India is 1.5kgs p.a., as compared

to the global average of 15kgs p.a.


HISTORY OF PAINTS

The Indian Paint Industry was initiated in 1902, when Shalimar

Paints set-up its first factory in Kolkata.

After liberalization, as the excise duties got drastically reduced

(from 40% to 16%), the industry recorded a healthy growth of

12-13% annually.


SEGMENTATION OF PAINT INDUSTRY

Indian Paint

Industry

Decorative Industrial

DistemperEmulsions

Mainly

Villages

Generally

in Cities

Automobiles Marine

Paints

& others


MARKET SEGMENTATION

Industrial: Three main segments of the industrial sector include

automotive coatings, powder coatings and protective coatings.

User industries for industrial paints include automobiles

engineering and consumer durables.

The industrial paints segment is far more technology intensive

than the decorative segment.


MAJOR PLAYERS IN INDIAN PAINT

INDUSTRY


Decorative Paints

Exterior PaintsInterior Paints

Wall-Emulsion

-Distemper

Metal-Enamel

Wood

Emulsion

Textured

Cement

Types of Decorative Paints


Types of Paint

• Primer

• Emulsion – Water Based

• Flat Finish – ceiling or walls with bad shape

• Matt finish – wash-ability

• Eggshell Finish – bathrooms

• Satin – furniture

• Varnish – protective coating


MECHANISM OF PAINTS

Major InputsMajor

ProductsEnd User

Raw Materials

(56%)

Selling &

Administration

expenses

(23%)

Employee Cost

(12%)

Decorative

Products: Paint

Emulsions, Enamels,

Distempers, Wood

Finishes, Metal

Finishes etc.

Industrial Products:

Powder Coating,

Floor Coating,

Surface Coating etc.

Households,

Construction

firms (70%)

Automobiles

Consumer Goods

Marine Industry

(30%)


COMPONENTS OF PAINTSRaw Materials: On an average, raw materials constitute 56% of

the total expenditure in paint companies.

Titanium dioxide is one of the major raw materials and price

fluctuations in its cost have direct and substantial impact on the

cost of production.

Crude oil derivatives are the other major raw materials and

have similar impact.

Apart from these a large number of other raw materials are

used for adding/giving specific properties to the wide product

range offered by the industry.

Contd.Made by : Vikram Dahiya

COMPONENTS OF PAINTS

End-User: The decorative paints segment products find

use in households and construction whereas the industrial

segment products find use in automotive industry,

consumer durables industry.


SALES OF COMPANIES

Asian

Paints

Kansai

Nerola

c

Berger

Paints

ICI

Paints

Shalim

ar

Paints

Net Sales(FY2011) in

Cr.6607.2 2266.2 2096.2 1087.6 404.4

0

1000

2000

3000

4000

5000

6000

7000

Qu

an

tity

Net Sales(FY2011) in Cr.


MARKET SHARES OF COMPANIES

(CONTD.)

32%

11%

11%6%5%

35%

Asian Paints

Kansai Nerolac

Berger Paints

ICI Paints

Others

Unorganised


DISTRIBUTION PROCESS OF PAINTS

Paint Manufactures

Regional Warehouses

Company Dealer

Customers


FACTORS AFFECTING PAINT INDUSTRY

Increasing level of income & education

Increasing urbanisation

Increasing share of organised sector

Development of the Realty, Automobile and Infrastructure

sector

Availability of financing options

Increasing Penetration in the Rural Markets


NEW CONCEPTS OF PAINTS

Multi coloured room concept.

Lead free colour.


Dealership

Conditions:

• Blank check against next order/security

• Dealer form – Registration etc

• Asking for display space wall/racks -company pays (in

case of Asian)

• Margin – 5-6%

Dealer Incentives

• Scheme based Incentives

• Foreign trips / Gifts


Market Condition

• Paint Industry is Mostly Organized sector and local

players gives comparatively more competition in Rural

areas rather than Urban Areas

• Competition is fierce

• Indian Paint Industry growth is higher than Global rate

– so Demand is ever increasing


Company Support and Market

Strategy

Sales Support

• Presence of Sales team in the local market

• Channel sales and Project sales teams are different in

some cases

• Projects are being executed via channel only except for

Berger Paints which takes projects directly many times

Marketing Support

• Contractor Meets at local level

• Approaching construction sites well in Advance to

generate leads

• Advertisement support for big brands

• Yearly gifts to associated members


Market

There are different approaches to cap different markets

• Decorative paints

• Industry purpose Paints

Company Industrial market Decorative Market

Asian 14.5 37.5

Nerolac 42.5 10

Berger 14.2 11.2

Dulux 7.8 7.8

J N Paints 8.1 5.5

Market Share

(Percentage)


Paint Substitutes

• White Cement

• White Wash

• Brick and Stone structure

• WALLPAPER


Innovation in the Industry

Despite its lower margin and greater credit risks, dealers stick around, Demand

being main reason, Innovation is what keeps them intact

There is so much R&D going on in this sector and results are tangible,

• Paints that lower the room temp up to 5*c

• Marble Finishing

• Scratch proof

• Textured

• Stencils

And so much..


THANK YOU !!!
