Professional Documents
Culture Documents
COMPANY’S PROFILE
Asian Paints is India's largest paint company and ranks among the top ten
decorative coatings companies in the world today, with a turnover of Rs.30.2
billion (USD 680 million). It was formed as a partnership firm by four
friends in 1942. The company has an enviable reputation in the corporate
world for professionalism, fast track growth, and building shareholder
equity.
Driven by its strong consumer-focus and innovative spirit, the company has
been the market leader in paints since 1968. Today it is double the size of
any other paint company in India. Asian Paints operates in five regions
across the world viz. South Asia, South East Asia, South Pacific, Middle
East and Caribbean region through the four corporate brands viz. Asian
Paints, Berger International, SCIB Paints and Apco Coatings. Asian Paints
has 30 paint manufacturing facilities in 22 countries with a combined total
manufacturing capacity of around 370 million liters per annum. The
company operates in 10 markets through Berger International Limited and in
five markets in the South Pacific through Apco Coatings. In Australia it also
owns the Pacific Paints brand, in Fiji & Samoa Islands it also operates
through Taubmans, and in 6 countries through Asian Paints.
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PRODUCT MIX
Asian Paints produces a wide range of paints for decorative and industrial
use. It also manufactures intermediate products like Phthalic Anhydride and
Pentaerythritol. The chemicals business which contributes 5% to overall
sales of the group is managed for value. APIL's product range includes Wall
paints, Metal paints, Wood Finishes, Primers and others.
Apart from offering the customers a wide range of decorative and industrial
paints, it even custom-creates products to meet specific needs.
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conditions of high rainfall, humidity and heat, Apex provides
excellent resistance against the growth of algae and fungi on the
walls. It offers excellent protection against alkali and UV
degradation too.
Utsav
Royal
Tractor emulsion
MARKETS
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South Asia
Bangladesh, Nepal, India and Sri Lanka.
Africa
Egypt
Caribbean Islands
Barbados, Jamaica, Trinidad and Tobago.
Middle East
Bahrain, Dubai and Oman.
South Pacific
Australia, Fiji, Solomon Islands, Tonga, Vanuatu and Samoa Islands.
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H1-FY 2005
Caribbea
n Middle
25.0% East
34.9%
South
Pacific
13.4%
S.E. Asia South
15.6% Asia
11.1%
The paint industry is raw material intensive. Paint involves the mixing of
various raw materials in various proportions. The raw materials are of a wide
variety. On an average, raw materials account for 60% of net sales (industry
average). In case of small-scale units it forms up to 70% of the net sales.
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Raw materials are divided into three major groups, namely, pigments
(titanium dioxide, zinc oxide etc.), solvents (mineral turpentine) and resins
and additives.
Binders are generally oils, resins and plasticisers that give paints its
protective property. Most resin manufacturers make alkyds, polyesters,
emulsion polymers, epoxy resins, amino resins, powder coating resins etc.
Around 600 raw materials are required by the industry and all raw materials
are not directly related to crude oil. The basket of raw materials is quite
exhaustive. Raw materials, which constitutes around 60 per cent of total cost
for the paints industry is an important factor for maintaining operating
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margins. The industry imports around 25 per cent of raw materials. But the
most important raw material is titanium dioxide, which accounts for around
25-30 per cent of raw material costs.
LOGISTICS
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has been able to market brands aggressively, thereby outperforming the
industry year after year
The company needs to reach the customer at the right time ensuring the
availability of the product on shop shelves
This calls for reduction in lead time, operating costs and inventory levels
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distribution system through an external agency offering specified services,
which could be constantly improved upon.
(a)Order processing:
Most paint companies are hit by the fact that they do not make the raw
materials themselves. For example, phthalic anhydride (PAN) is
manufactured from orthoxylene and which goes into the production of paints
along with titanium dioxide. Asian Paints is the only paint company that
manufactures PAN. The other paint companies have to import their stock.
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Since PAN prices generally outpace international orthoxylene prices by
almost 50% paint companies end up paying a fortune when prices rise. In
such a situation Asian Paints benefits by selling PAN in the open market.
(b)Transportation Management
(c)Inventory Management
The company prefers to maintain low inventory levels due to having large
no. of suppliers at bay. The company has 350 raw material and intermediate
and goods suppliers.
(d)Warehousing
(f)Packaging
(g)Acquisition
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MARKETING AND SALES
Product: Asian Paints Colour World is the brand name for the one-stop
colour shop of Asian Paints, which are unique paint shops where shades are
generated with the help of a computer with software to choose and select
1,511 shade combinations, designed to reach consumers in a direct `dil se'
style.
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Advertising Objective: Position Asian Paints Colour World as the ‘one stop
paint shop’ with all the colours one could want. The advertising should
create enough interest in potential consumers to ensure that they come to the
Asian Paints Colour World outlet or at least call the Asian Paints helpline.
CUSTOMERS
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The company does not favor the customer by serving him but the customer
is doing them a favor by giving them an opportunity to do so.
SEGMENTS
Segment Information
Asian Paints (India) Limited has identified two segments in line with the
Accounting Standards on Segment Reporting (AS-17). These are Paints and
Others. Others include the Chemicals business of the company viz. the
manufacturing of Phthalic Anhydride & Pentaerythritol.
Paint sales for the company recorded growth of 11.4 % at Rs. 14590.3
million compared to Rs. 13096.7 million in the previous financial year.
Segment results of the paints business increased by 17.9% to Rs. 2579.9
million from Rs. 2188.4 million in 01-02. Sales from the Chemicals business
registered growth of 32.2% at Rs. 1147.56 million compared to Rs. 868.19
million in 01-02. It is for the first time that the Chemical business has
recorded sales of over Rs. 1000 million. Segment results of the chemical
business increased by 190.8% to Rs. 182.9 million from Rs. 62.9 million in
01-02.
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(September-December) is significant, as compared to other periods. This
segment is price sensitive and is a higher margin business as compared to
industrial segment.
MARKET STANDING
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unorganised segment used to have a much higher share of the market but this
is slowly changing. Today's consumer is evolving and has become quality
and brand conscious. In addition, the reduction of excise duties from a high
of 40 per cent to 16 per cent in the last decade has reduced the advantage of
the unorganized segment. Increase in raw material costs will equally affect
both the organized and the unorganized sector. Asian Paints has been the
market leader in the Indian paint industry for over three decades. Today the
company has a very high market share. The nearest competitor is half of
there size. Yet, despite the dominant position in the market, Asian Paints has
been able to consistently record an increase in market share. The company's
market share has increased over 3 per cent in the past seven years.
11.1% 0.4%
17.3% 3.9%
20.3% 46.9%
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Suggestions –
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BIBLOGRAPHY
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