Indian Paints Market

Challenges of Global Brands in Indian Paint Market.

What is Paints

• Paint is any liquid, liquefiable, or mastic composition which after application to a substrate in a thin layer is converted to an opaque solid film. It is most commonly used to protect color or provide texture to objects.

Categories

Decoratives

•Major segments in decoratives include exterior wall paints, interior wall paints, wood finishes and enamel and ancillary products such as primers, putties etc. Decorative paints account for over 72% of the overall paint market in India.

Industrial

•Three main segments of the industrial sector include automotive coatings, powder coatings and protective coatings. Kansai Nerolac is the market leader in this segment. User industries for industrial paints include automobiles engineering and consumer durables. The industrial paints segment is far more technology intensive than the decorative segment.

Type of Paints

Decorative

Water base paint

Emulsions

Distamper

Solvent base paint

Wood finish and enamel

India Paints MarketOld Major Player 80%Asian, Nerolac, Berger, Dulux (Akzo No

bel)

Other brands 6%

Local Player14%

Major Challenges for global brand

• Brand • distribution network • working capital efficiency

• technology play a crucial role.

DARE/barriers to entry for new players

• 1. Big players (organized segment) control about 80% of the paints market.

• 2. The sector requires high input costs and it is raw material intensive.

• 3. Sharp rise in crude and petrochemical prices.

• 4. Profit margins are low. Thus volumes play a major role.

• 5. Building brands is a major challenge.

• 6. Modern and updated production technology needed.

Market Depends on

New ConstructionBuilders 30%

Archietect 30% Contractor 40%

Contractor 70%Dealers 20%

Consumer 10%

Industrial paints find major us

DARE/quick facts

1. India’s booming real estate sector, growing at 35% year-on-year, is driving the demand for both decorative and industrial paints.

2. Paints’ demand stands at 1.22 million tons, and is projected to grow to 2 million tons by the start of the next decade, says research firm IRL.

3. In volume terms, the paints sector posted a 16% year-on-year growth in FY07

4. Rural markets offer new opportunities for growth.

5. Demand for decorative (architectural) paint is projected to increase 8.7% per year by 2011, which constitutes 70% of the paint market.

Indian Pains Company v/s MNCs

• Indian paints & coatings industry has been showing healthy growth over last few years. This

• has attracted investments from many multinationals companies (MNCs). While few MNCs

• are consolidating their presence in India, new players are planning to enter the market.

• Indian market is all set to witness an interesting competition between domestic companies

• and MNCs, as they try to increase their marketshare.

Global Leader Now in Indian paint market

• Akzo Nobel World Number 1 in industrial segment, to acquire Ici Dulux

• Sherwin Williams usa number 1 and globally Number 2 in decorative segment, to acquire

• Nippon Paint

• Juton Paint

Thanks