Organisation Study On NEON Paints

1ORGANISTION STUDY ON NEON PAINTS PVT.
LTD
ORGANIZATION STUDY
ON
NEON PAINTS VIJAYAWADA
Submitted in Partial fulfillment of the requirement for the award of the Degree of
Master of Business Administration
Name : SIVA PRASAD MEKALA C
Reg No. : 09P35H0250
Specialization : FINANCE
Partner Institution : ACHARYA LEADERSHIP AND RESEARCH INSTITUTE
Under the guidance of
INTERNAL GUIDE EXTERNAL GUIDE
Prof. PUNEETA GOEL Mr. SUDHEER KUMAR

(HR)
Centre for Participatory and Online Programs
Bharathiar University
Coimbatore – 641 046

2ORGANISTION STUDY ON NEON PAINTS PVT.LTD
(Month & Year) : DECEMBER 2010
DECLARATION
I hereby declare that this project work titled ORGANIZATION STUDY is a record of Original work
done by me under the guidance of Prof. PUNEETA GOEL and that this project work has not
formed the basis for the award of any Degree/Diploma/Associate ship/Fellowship or similar title to
any candidate of any University.
Signature of the candidate
Name : SIVA PRASAD MEKALA C
Reg No. : 09P35H0250
Course with Specialization: MBA
(FINANCE)
Date : Signature of the Guide

ACKNOWLEDGEMENT
I would like to express my gratitude to Acharya Leadership & Research Institute and my
teachers and my guide Prof. Puneeta Goel also thankful to my external guide Mr. Sudheer Kumar, MD Mr. V.
Srinivas, of Neon Paints Pvt. Ltd (Vijayawada) whose direction, assistance, and guidance have been
invaluable for the project. I wish to thank staff for their constant support.
I particularly like to extend my thanks to my seniors and colleges and friends who supported me
during the project.
SIVA PRASAD MEKALA C

The Indian paint industry worth Rs. 49bn has consolidated over the past four years with the
organized sector taking away share from the unorganized segment .The paint market is expected to
grow at 8-10% p.a over the next few years .The growth could be higher of industrial activity picks
up as the industrial paint segment is gaining more importance. Neon paints offers the best exposure
being the competitor and an innovative marketing company.
Paints can broadly be classified as decorative and industrial on the basis of the end use. The Indian
market is dominated by the decorative segment, which comprises almost 705 of consumption as
compared to developed countries where the industrial segment is more dominant. The ratio in Indian
is also likely to shift more towards industrial segment, especially with growth in the auto and white
goods industry.
The unorganized sector has historically been dominant due to the high excise structure .Over the last
five years, the excise rates have come down drastically from 40% to 18% resulting in erosion of the
unorganized sector’s share. The paint industry is characterized by low fixed asset intensity (as
essentially it is a mixing process) but high working capital intensity (as the number of shades is large
and there is seasonally in demand). The main investments are in brand building and distribution
infrastructure. New trends are emerging in technology and marketing Introduction of tinting
machines at the dealer/ retailer level will bring down working capital costs .Also new technology is
being used for increasing the utility and life span of paints. Indian industry will have to keep pace
with global technological changes to maintain their competitiveness. Already, a few alliances have
been entered into and the number is likely to increase in the future .Neon paints is the competitor in
the industry followed by Goodlass Nerolac and ICI respectively.
With the help of this organization study we are able to understand the in an out functions, activities
and the process of creating paints in a paint industry. The effort put in bringing our lives colorful is
quite high and with at most sincerity and dedication by each and every employees of the
organization
PARTICULARS PAGE NO:
1 INDUSTRY PROFILE 8
2 COMPANY PROFILE 22
3 ORGANIZATIONAL STRUCTURE 27
4 DEPARTMENT PROFILE 31
5 SWOT ANALYSIS 59
6 FINDINGS&SUGGESTIONS 65
7 CONCLUSION 69
BIBLIOGRAPHY 71
Contents
Paint is defined as the group of emulsions, consisting of pigments suspended in a liquid medium, for
use as decorative or protective coatings. Today, contemporary paints and coating consists of
countless of hundred of thousands to fulfill the varied requirements of hundreds of thousands of
applications.”Paint” ranges from the broad group of environmentally sound latex paints that many
consumers use to decorate and protect their homes and the translucent coating that line the interior of
food homes and the translucent coating that line the interior of food containers, to the chemically
complex, multi-component finishes that automobile manufacturers apply on the assembly line.
• Paint made its earliest appearance about 30,000 years ago. Cave dwellers used crude paints to
leave behind the graphic representations of their lives that even today decorate the walls of
their ancient rock dwellings. It becomes the 10th largest decorative paint company in the
world
It is more than twice the size of its nearest competitor
• It is one of the most admired companies in India
• Present in 22 countries with 27 manufacturing locations, over 2500 SKU's, Integrated SAP -
ERP & i2 - SCM solution
• Rated Best Employer by BT-Hewitt survey, 2000 Bluest of the blue chips by Hindu Business
Line; Most admired company to work for by ET-BT survey, 2000
• On the recommendations of Booz, Allen and Hamilton, Neon Paints restructured itself into
Growth, Decorative and International business units and adopted SCM and ERP technology
• Aims to become the 5th largest decorative paint company in the world
The utility of paints has evolved from a decorative use to a surface protection use. Also, know as
surface coatings, paints can be classified on the basis of end use, solvent system and solid content.
End use classification:
Under this heading, paints can be classified as decorative / architectural paints and industrial
paints .As the names suggest, decorative paints are mainly used for household and construction
purposes while industrial paints are used as coating for industrial productions. Main types of
decorative paints are enamels,
Acrylic emulsions, distempers and exteriors and post message primary types of industrial paints are
marine paints, anti corrosive metal coatings.

Solvent based classification:
This includes paints, which use petro products or water as the main solvent. Water based paints are
gaining popularity due to their environment friendliness.
Solid content: can be classified as liquid or solid (powder) paints .Powder coating find application
mainly in the white goods industry.
The decorative segment dominates the market in India with a 70% share with the rest accounted for
by industrial paints. This is compared to the developed countries where the share is the reverse with
the industrial segments the major one. With increased industrialization segments the major one. With
increased industrialization the ratio in India is also likely to change in the favor of industrials and
both segments are likely to be equal partners by the end of five years.
Decorative Paints Segment Market Size (Rs mn)
Enamels 8600
Wall Finishes 4730
Primers 2150
Wood Finishes 430
Total 15910
INDIAN PAINT INDUSTRIES SECTOR REPORT
Products
Industrial Paints Segment Market Size (Rs mn)
Auto 4386
CRP 1075
Powder 860
Coil 94.6
Others 731
Total 7147
OVERVIEW OF PAINT INDUSTRY
 The Indian paint industry is a Rs 49 Billion sector
 The demand for paints is relatively price – elastic but is linked to the industrial and
economical growth.
 The per capita consumption of paints in India is very low at 0.5 kg per annum if compared
with 4kg in the South East Neon nations and 22 kgs in developed countries. The global
average per capita consumption is 15 kg.
 In Indian the organized sector control 70 percent of the total market with the remaining 30
percent being in the hands of nearly 2000 small – scale units.
 In Indian the industrial paint segment account for 30percent of the paint market while the
decorative paint segment accounts for 70 per cent of paints sold in Indian.
 In most developed countries, the ration of decorative paints vis-à-vis industrial paints is
around 50:50.
 All the industry major has a vast dealership network and is required to maintain high
inventory levels.
 Most of the paint leaders have technical tie-ups with global paint leaders.
Sector comments
Paint is a mixture of four elements – solvents, binders, pigments and additives. Solvents give the
paint a liquid flow while the binder binds it to the surface. Pigments impart colour and opacity to
the paint and the additives give it special resistance properties.
Sector trends
The recession in the construction and automobile sector had throw in shades of gray across the
Industry spectrum, but the revival in these sectors is cause for cheer for the paint industry as
well. The balance sheets of the industry major are now painted with bright colors.
Sector specifics
On product lines, paints can be differentiated into decorative or architectural paints and industrial
paints. While the former caters to the housing sector , the automotive segment is a major consumer
of the latter .Decorative paints can future be classified into premium, medium and distemper
segments .Premium decorative paints are acrylic emulsions used mostly in the metros .The
medium range consists of enamels , popular in smaller cities and towns . Distempers are economy
products demanded in the suburban and rural markets .Nearly 20perr cent of all decorative paints
sold in India are distempers and it is here that the unorganized sector has dominance. Industrial
paints include powder coatings, high performance coating and automotive and marine paints .But
two –thirds of the industrial paints produced in the country are automotive paints.
Market profile
The leaders in the organized paint industry are Neon Paints Pvt Ltd. (NPPL), Goodlass Nerolac
Paints Ltd. (GNPL), Berger Paints, Jenson & Nicholson Ltd. (J&N) and ICI (India) Ltd.
Neon paints is the industry competitor with an overall market share of 15 per cent in the organized
paint market. It has the largest distribution network among the players and its aggressive marketing
has earned it strong brand equity. The Berger Group and ICI share the second slot in the industry
with market shares of 17 per cent each. GNPL has a market share of 15 percent in the organized
sector.
The market can be further split into decorative paints and industrial paints. The demand for
decorative paints is highly price-sensitive and also cyclical. Monsoon is a slack season while the
peak business period is Diwali festival time, when most people repaint their houses. The industrial
paints segment, on the other hand, is a high volume-low margin business. In the decorative segment,
it is the distribution network that counts while in the industrial segment the deciding factor are
technological superiority and tie-up with automobile manufacturers for assured business.
NPPL dominates the decorative segment with a 16 per cent market share. The company has more
than 7,000 retail outlets and its brands Tractor, Apcolite, Utsav, Apex and Ace are entrenched in the
market. GNPL, the number-two in the decorative segment, with a 8 per cent market share too, has
now increased its distribution network to 5,700 outlets to compete with NPPL effectively. Berger
and ICI have 9 per cent and 8 per cent shares respectively in this segment followed by J&N and
Shalimar with 1 and 6 per cent shares.
The share of industrial paints in the total paint consumption of the nation is very low compared to
global standards. It accounts for 15 per cent of the paint market with 34 per cent of paints sold in
India for decorative purposes. In most developed countries, the ratio of decorative paints v/s
industrial paints is around 50:50. But, with the decorative segment bottoming out, companies are
increasingly focusing on industrial paints. The future for industrial paints is bright. In the next few
years, its share would go up to 25 per cent, in line with the global trend.
GNPL dominates the industrial paints segment with 21 per cent market share. It has a lion's share of
35 per cent in the OEM passenger car segment, 20 per cent share of two wheeler OEM market and
10 per cent of commercial vehicle OEM market. It supplies 35 per cent of the paint requirement of
Maruti, India's largest passenger car manufacturer, besides supplying to other customers like Telco,
Toyota, Hindustan Motors, Hero Honda, TVS-Suzuki, Mahindra & Mahindra, Ashok Leyland, Ford
India, PAL Peugeot and Bajaj Auto.
GNPL also controls 10 per cent of the consumer durables segment with clients like Whirlpool and
Godrej GE. The company is also venturing into new areas like painting of plastic, coil coatings and
cans. NPPL, the leader in decorative paints, ranks a poor second after Goodlass Nerolac in the
industrial segment with a 8 per cent market share. But with its joint venture Neon-PPG Industries,
the company is aggressively targeting the automobile sector. It has now emerged as a 50 per cent
OEM supplier to Daewoo, Hyundai, Ford and General Motors and is all set to ride on the automobile
boom. Berger and ICI are the other players in the sector with 10 per cent and 9 per cent shares
respectively. Shalimar too, has an 8 per cent share.
SEGMENTATION
Paints – Products
Products
The products of the paint industry can be classified indo two major segments decorative
(architectural) paints and industrial paints.
Decorative paints:
The decorative paints segment can be classified into interior paints and exterior of cement
paints .80% of the decorative paints account for interior paints, which consists of premium.
Medium and economy categories .The premium category consists of plastic emulsions, the
medium – priced category consists of synthetic enamels and the economy category consists of
distempers.
 The products under the decorative finishes can be limestone coating, primers, distempers,
cement paints, matt/ luster finishes, enamels, emulsions (first quality), and premium
emulsions.
 Consumption of paints is skewed towards decorative paints that account for 70 % of paints
sold in India. This is in a sharp contrast to the trend in developed countries, where the ratio is
skewed towards the industrial segment.
 This segment is marked by the presence of a large number of players from the organized as
well as unorganized sector. Competition is high and margins tend to be low in this segment.
Products of this segment are relatively price sensitive.
 Demand for decorative paints is seasonal with bulk of sales taking place during the festival
seasons from September to December. Besides sales remains slack during the monsoon
months from June to August.
 Entry barriers in term of technological and funds requirements are relatively lower in the
paints sector. However decorative paints are marketing savvy products and backed by large
advertisement campaigns and dealership networks. These server as high cost entry barriers
for new companies in this business .The huge investment required in setting up a vast
marketing and dealership network to advertise and develop a brand over a period of time can
only be afforded by companies in the organized sector .It is for this reason that smaller
companies and small scale sector units are slowly losing market shares to the organized
sector.
Industrial Paints:
Industrial paints comprising 30% of the market include automotive paints , high performance coating
, coil coatings .The automotive segment is further bifurcated into OEMs and auto refinishes .The
automotive and general industrial coating occupy top slot in terms of production
FOREIGN COLLABOTION
The industrial paints segment due specialized technology and high capital expenditure attracts fewer
players. Most Indian companies have tied up with of are in the process of tying up with international
paint majors to have access to the latest technology. A tie – up with a global paint manufacturer also
enables the domestic company to supply to local customers of its partner. For example, Good lass
Nerolac is a major supplier to Maruti Suzuki because of Kansi, its Japanese collaborator and Suzuki
rotations .It is for the same reason that Neon Paints (tie –up with PPG Industries, USA) is a major
supplier of paints to Opel Astra.
Technology collaboration
All the paint majors have tie-ups with global paint leaders for technical know-how. Neon Paints has
formed a JV with PPG Industries Inc to service the automotive OEMs.
Berger has a series of tie-ups for various purposes. It has a technical tie-up with Herbets Gmbh of
Germany in addition to its joint venture with Becker Industrifag. With the agreement with Herbets
coming to an end in 2001, Berger has now allied with the Japanese major Nippon Paints to boost its
OEM turnover since the Indian roads are being flooded with Japanese automobiles. It also has an
agreement with Orica Australia Pvt. Ltd. to produce new generation protective coatings. The
company also has tie-ups with Valspar Corp and Teodur BV for manufacturing heavy duty and
powder coatings.
Incidentally, ICI makes paints with the technical support of Herbets, which has been recently
acquired by by E I Du Pont de Nemours of the US. Interestingly, Du Pont, which is a leader in
automotive coatings in the US, has a technical tie-up with Goodlass Nerolac for the manufacture of
sophisticated coatings for the automotive sector. Goodlass also has technical collaborations with
Ashland Chemcials Inc, USA, and a leader in the petrochemical industry, Nihon Tokushu Toryo Co
and Oshima Kogyo Co Ltd, Japan.
DEMAND AND SUPPLY SCENARIO
Paint demand is intrinsically related to economic development .The demand for decorative paints in
India mainly arises from tow segments viz. Construction of new building retails demand for
refurbishment like automobiles, consumer durables, shipping engineering
The demand for paints has grown at 10% for the last five years. After a sluggish growth in late 80s
and early 90s, industry grew at a rapid pace of more than 12% from 1992-1996. High excise duties
and lackluster industrial growth resulted in low growth of 2- 4 % during 1987-92. After 1992, the
industry picked up aided by improving economic conditions and rationalization of excise structure.
Almost the entire growth can be attributed to volume increase as price realization has increased
At less than 5% p.a. over the last two years; demand has slowed down due to the economic
slowdown.
According to Indian Paints Association, demand will rise from the current 0.6mn ton per annum to
almost 1mn TPA by 2003. Demand for decorative paints will be led by the household construction
industry which is expected to grow at almost 8% over the next five years considering the extreme
shortage of housing and the government’s thrust on encouraging housing activity. The centers of
housing activity are also likely to shift more towards rural areas. The industrial segment will grow
faster due to the lower base and fast growth in major user industries like consumer durables and
automobiles.
The paint industry is not capital; intensive. However, it has high entry barriers in the form of
distribution network and product branding. Thus, fresh capacity is likely to come from existing
players only. In fact, low capital costs encourage manufacturers to increase capacity to cater to
seasonal peaks (especially in decorative paints) rather than incur inventory-carrying costs, during
lean periods.
MAJOR PLAYERS AND THEIR SHARES
The major players existing in industry are:
1. Neon paints.
2. Goodlass Nerolac paints.
3. Berger paints.
4. ICI paints.
5. Jenson and Nicholson paints.
6. Shalimar paints.
The leader in the high volume medium and mass segments of decorative paints, Neon paints have
been consolidating its competitorship over the past few years and now have the biggest slices of 33%
of the market of decorative paints where as Goodlass Nerolac paint has the highest market share in
the industrial paint segment.

Neon Paints is India’s largest paint company and, with a turnover of INR 19.63 billion. The group
has an enviable reputation in the corporate world for professionalism, fast track growth, and building
shareholder equity. Neon Paints operates in 6 countries and has 14 paint manufacturing facilities in
the world servicing consumers in over 32 countries. Besides Neon Paints, the group operates around
the world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and
Tubman’s. Forbes Global magazine USA ranked Neon Paints among the 600 Best Small Companies
in the World for 2002 and 2003 and presented the 'Best under a Billion' award, to the company.
Neon Paints is the only paint company in the world to receive this recognition. In Nov 2005 and
Nov 2007, Forbes ranked Neon Paints among the Best under a Billion companies in Asia. The
company has come a long way since its small beginnings in 1988. Four friends who were willing to
take on the worlds biggest, most famous paint companies operating in India at that time set it up as a
partnership firm. Over the course of 15 years Neon Paints became a corporate force and India's
leading paints company. Driven by its strong consumer-focus and innovative spirit, the company has
been the competitor in paints since 2000. Today it is double the size of any other paint company in
India. Neon Paints manufactures a wide range of paints for Decorative and Industrial use.
Vertical integration has seen it diversify into products such as Phthalic Anhydride and
Pentaerythritol, which are used in the paint manufacturing process. Neon Paints along with PPG Inc,
USA, one of the largest automotive coatings manufacturers in the world has begun 50:50 joint
ventures, Neon Industries to service the increasing requirements of the Indian automotive coatings
market. Another wholly owned subsidiary, Neon Paints Industrial Coatings Limited has been set up
to cater to the powder coatings segment which is one of the fastest growing segments in the
industrial coatings market.
INTERNATIONAL PRESENCE
Today the Neon Paints group operates in 10 countries across the world. It has Manufacturing
facilities in each of these countries and is the largest paint company in five countries. The group
operates in three regions across the world viz. South Asia, South East Asia, and Caribbean region
through the three corporate brands viz. Neon Paints, Berger International, and SCIB Paints. In five
markets, it operates through its subsidiary, Berger International Limited; in Egypt through SCIB
Paints; in five markets in the South Pacific it operates through Apco Coatings and in Fiji and Samoa
it also operates through Tubman’s.
Vision
Our vision is to grow rapidly with the help of newer technologies and tapping latent needs of the
consumers. It is our firm belief that if we can provide what consumers need, in a way they need,
there is hardly a reason why Neon brand will not soon become one of the most preferred and trusted
brands. For this we will keep re-assessing and build upon our strengths and improve upon our
weaknesses. As part of the Neon group, we, the Promoters & the employees should never
compromise on the promises of quality and innovation. And the goals are ours to reach.
MISSION
Continue to provide value added products in an ethical and competitive way to the community.
Businesses are to generate profits. The difference with us is how we define profit. We believe that
any exchange of goods and services should leave both- the giver and taker- satisfied and pleased.
This generates trust. This in turn is, key to the growth and even survival of a company.
On the other hand, adapting to changing times – whether it is new technology or consumer needs
makes a business profitable. This profitability allows continuity and growth of the business.
GOAL
"To satisfy our customers by giving all the paint and coating related solutions at their doorstep".
Neon Paints (India) Limited - Engaged in manufacturing and exporting of decorative paints,
emulsion paints, protective coatings, industrial paints and automotive paints. The company have
designed and supplied over 100 plants. We distribute our success to a business philosophy that
stresses on technical excellences, ethics and committed customer service Paint Companies in India
bring to you a wide range of paints, varnishes, pigments and coatings for the perfect finishes for the
home interior and exteriors décor and beautification.
The paints industry in India has flourished into a full-fledged manufacturing and sale market catering
to the international standards being demanded for the painting jobs. The top paints manufacturers
and painting companies like Neon Paints India, Nerolac India Paints, Berger, Dulux India Paints, and
Shalimar Paints and NEON etc. also provide an online visual gallery and shade cards citing all the
available colors and paints products.

Painting is a vital ingredient in any décor. Different surfaces require different kinds of products. The
surfaces may vary from walls - interior, exterior and textured to wood and glass surfaces, metals,
faux finishes, doors and handles to cars and special decorative paints for bedrooms and kids rooms
and many such special requirements. The India paints companies have given many products to suit
each individual need. You can get all varieties of plastic paint, acrylic paint, primers, emulsions,
latex paints etc. Selection of home and office paint goes far beyond just the matching or desired
color.
The texture and quality of the paint applied is what matters the most for the perfect finish you are
looking for. Some of the common problems one might face with the painting jobs done on their
surrounding surfaces are blistering, cracking or flaking, blocking, sagging, yellowing, fading or
surfactant leaching.
The organization structure of Neon paints is as follows:

The various departments coming under Neon are:

1. Production
2. Financial management
3. Human resources management
4. Information & systems
5. Research & development
6. Marketing management
Production:
This department as various functions in the organizations like the making of paints which as lot of
procedure in it and also it takes a lot of time.
The process of making paints is as follows:
Paint is a term used to describe a number of substances that consist of a pigment suspended in a
liquid or paste vehicle such as oil or water. With a brush, a roller, or a spray gun, paint is applied in a
thin coat to various surfaces such as wood, metal, or stone. Although it’s primary purpose is to
protect the surface to which it is applied, paint also provides decoration.
Samples of the first known paintings, made between 20,000 and 25,000 years ago, survive in caves
in France and Spain. Primitive paintings tended to depict humans and animals, and diagrams have
also been found. Early artists relied on easily available natural substances to make paint, such as
natural earth pigments, charcoal, berry juice, lard, blood, and milkweed sap. Later, the ancient
Chinese, Egyptians, Hebrews, Greeks, and Romans used more sophisticated materials to produce
paints for limited decoration, such as painting walls. Oils were used as varnishes, and pigments such
as yellow and red ochre’s, chalk, arsenic sulfide yellow, and malachite green were mixed with
binders such as gum Arabic, lime, egg albumen, and beeswax.
Paint was first used as a protective coating by the Egyptians and Hebrews, who applied pitches and
balsams to the exposed wood of their ships. During the middle Ages, some inland wood also
received protective coatings of paint, but due to the scarcity of paint, this practice was generally
limited to store fronts and signs. Around the same time, artists began to boil resin with oil to obtain
highly miscible (mixable) paints, and artists of the fifteenth century were the first to add drying oils
to paint, thereby hastening evaporation. They also adopted a new solvent, linseed oil, which
remained the most commonly used solvent until synthetics replaced it during the twentieth century.
In Boston around 1700, Thomas Child built the earliest American paint mill, a granite trough within
which a 1.6 foot (.5 meter) granite ball rolled, grinding the pigment. The first paint patent was issued
for a product that improved whitewash, a water-slaked lime often used during the early days of the
United States. In 1865 D. P. Flinn obtained a patent for a water-based paint that also contained zinc
oxide, potassium hydroxide, resin, milk, and line-seed oil. The first commercial paint mills replaced
Child's granite ball with a burrstone wheel, but these mills continued the practice of grinding only
pigment (individual customers would then blend it with a vehicle at home). It wasn't until 1867 that
manufacturers began mixing the vehicle and the pigment for consumers.
The twentieth century has seen the most changes in paint composition and manufacture. Today,
synthetic pigments and stabilizers are commonly used to mass produce uniform batches of paint.
New synthetic vehicles developed from polymers such as polyurethane and styrene-but Aden
emerged during the 1940s. Alkyd resins were synthesized, and they have dominated production
since. Before 1930, pigment was ground with stone mills, and these were later replaced by steel
balls. Today, sand mills and high-speed dispersion mixers are used to grind easily dispersible
pigments.
Perhaps the greatest paint-related advancement has been its proliferation. While some wooden
houses, stores, bridges, and signs

The first step in making paint involves mixing the pigment with resin, solvents, and additives to
form a paste. If the paint is to be for industrial use, it usually is then routed into a sand mill, a large
cylinder that agitates tiny particles of sand or silica to grind the pigment particles, making them
smaller and dispersing them throughout the mixture. In contrast, most commercial-use point is
processed in a high-speed dispersion tank, in which a circular, toothed blade attached to a rotating
shaft agitates the mixture and blends the pigment into the solvent.
Were painted as early as the eighteenth century, it wasn't until recently that mass production
rendered a wide variety of paints universally indispensable. Today, paints are used for interior and
exterior house painting, boats, automobiles, planes, appliances, furniture, and many other places
where protection and appeal are desired.

Raw Materials
Paint is composed of pigments, solvents, resins, and various additives. The pigments give the paint
color; solvents make it easier to apply; resins help it dry; and additives serve as everything from
fillers to anti fungicidal agents. Hundreds of different pigments, both natural and synthetic, exist.
The basic white pigment is titanium dioxide, selected for its excellent concealing properties, and
black pigment is commonly made from carbon black. Other pigments used to make paint include
iron oxide and cadmium sulfide for reds, metallic salts for yellows and oranges, and iron blue and
chrome yellows for blues and greens.
Solvents are various low viscosities, volatile liquids. They include petroleum mineral spirits and
aromatic solvents such as benzyl, alcohols, esters, ketones, and acetone. The natural resins most
commonly used are line-seed, coconut, and soybean oil, while alkyds, acrylics, epoxies, and
polyurethanes number among the most popular synthetic resins. Additives serve many purposes.
Some, like calcium carbonate and aluminum silicate, are simply fillers that give the paint body and
substance without changing its properties. Other additives produce certain desired characteristics
Paint canning is a completely automated process. For the standard 8 pint paint can available to
consumers, empty cans are first rolled horizontally onto labels, then set upright so that the point can
be pumped into them. One machine places lids onto the filled cans while a second machine presses
on the lids to seal the cons. From wire that is fed into it from coils, a bailometer cuts and shapes the
handles before hooking them into holes precut in the cans.
In paint, such as the thixotropic agents that give paint its smooth texture, driers, anti-settling agents,
anti-skinning agents, defoamers, and a host of others that enable paint to cover well and last long.
Design
Paint is generally custom-made to fit the needs of industrial customers. For example, one might be
especially interested in a fast-drying paint, while another might desire a paint that supplies good
coverage over a long lifetime. Paint intended for the consumer can also be custom-made. Paint
manufacturers provide such a wide range of colors that it is impossible to keep large quantities of
each on hand. To meet a request for "aquamarine," "canary yellow," or "maroon," the manufacturer
will select a base that is appropriate for the deepness of color required. (Pastel paint bases will have
high amounts of titanium dioxide, the white pigment, while darker ton will have less.) Then,
according to a predetermined formula, the manufacturer can introduce various pigments from
calibrated cylinders to obtain the proper color.
The Manufacturing Process
Making the paste
Pigment manufacturers send bags of fine grain pigments to paint plants. There, the pigment
is premixed with resin (a wetting agent that assists in moistening the pigment), one or more
solvents, and additives to form a paste.
Dispersing the pigment
The paste mixture for most industrial and some consumer paints is now routed into a sand
mill, a large cylinder that agitates tiny particles of sand or silica to grind the pigment
particles, making them smaller and dispersing them throughout the mixture. The mixture is
then filtered to remove the sand particles.

Instead of being processed in sand mills, up to 90 percent of the water-based latex paints
designed for use by individual homeowners are instead processed in a high-speed dispersion
tank. There, the premixed paste is subjected to high-speed agitation by a circular, toothed
blade attached to a rotating shaft. This process blends the pigment into the solvent.
Thinning the paste
Whether created by a sand mill or a dispersion tank, the paste must now be thinned to
produce the final product. Transferred to large kettles, it is agitated with the proper amount of
solvent for the type of paint desired.
Canning the paint
The finished paint product is then pumped into the canning room. For the standard 8 pint
(3.78 liter) paint can available to consumers, empty cans are first rolled horizontally onto
labels, then set upright so that the paint can be pumped into them. A machine places lids onto
the filled cans, and a second machine presses on the lids to seal them. From wire that is fed
into it from coils, a bailometer cuts and shapes the handles before hooking them into holes
precut in the cans. A certain number of cans (usually four) are then boxed and stacked before
being sent to the warehouse.

Quality Control
Paint manufacturers utilize an extensive array of quality control measures. The ingredients and the
manufacturing process undergo stringent tests, and the finished product is checked to insure that it is
of high quality. A finished paint is inspected for its density, fineness of grind, dispersion, and
viscosity. Paint is then applied to a surface and studied for bleed resistance, rate of drying, and
texture.
In terms of the paint's aesthetic components, color is checked by an experienced observer and by
spectral analysis to see if it matches a standard desired color. Resistance of the color to fading
caused by the elements is determined by exposing a portion of a painted surface to an arc light and
comparing the amount of fading to a painted surface that was not so exposed. The paint's hiding
power is measured by painting it over a black surface and a white surface. The ratio of coverage on
the black surface to coverage on the white surface is then determined, with .98 being high-quality
paint. Gloss is measured by determining the amount of reflected light given off a painted surface.
Tests to measure the paint's more functional qualities include one for mar resistance, which entails
scratching or abrading a dried coat of paint. Adhesion is tested by making a crosshatch, calibrated
to .07 inch (2 millimeters), on a dried paint surface. A piece of tape is applied to the crosshatch, and
then pulled off; good paint will remain on the surface. Scrub ability is tested by a machine that rubs a
soapy brush over the paint's surface. A system also exists to rate settling. An excellent paint can sit
for six months with no settling and rate a ten. Poor paint, however, will settle into an immiscible
lump of pigment on the bottom of the can and rate a zero. Weathering is tested by exposing the paint
to outdoor conditions. Artificial weathering exposes a painted surface to sun, water, extreme
temperature, humidity, or sulfuric gases. Fire retardancy is checked by burning the paint and
determining its weight loss. If the amount lost is more than 10 percent, the paint is not considered
fire-resistant.
Byproducts/Waste
A recent regulation (California Rule 66) concerning the emission of volatile organic compounds
(VOCs) affects the paint industry, especially manufacturers of industrial oil-based paints. It is
estimated that all coatings, including stains and varnishes, are responsible for 1.8 percent of the 2.3
million metric tons of VOCs released per year. The new regulation permits each liter of paint to
contain no more than 250 grams (8.75 ounces) of solvent. Paint manufacturers can replace the
solvents with pigment, fillers, or other solids inherent to the basic paint formula. This method
produces thicker paints that are harder to apply, and it is not yet known if such paints are long
lasting. Other solutions include using paint powder coatings that use no solvents, applying paint in
closed systems from which VOCs can be retrieved, using water as a solvent, or using acrylics that
dry under ultraviolet light or heat. A consumer with some unused paint on hand can return it to the
point of purchase for proper treatment.
A large paint manufacturer will have an in-house wastewater treatment facility that treats all liquids
generated on-site, even storm water run-off. The facility is monitored 24 hours a day, and the
Environmental Protection Agency (EPA) does periodic records and systems check of all paint
facilities. The liquid portion of the waste is treated on-site to the standards of the local publicly
owned wastewater treatment facility; it can be used to make low-quality paint. Latex sludge can be
retrieved and used as fillers in other industrial products. Waste solvents can be recovered and used as
fuels for other industries. A clean paint container can be reused or sent to the local landfill.
Financial management department:
This is one such department which takes care of the entire financial matters of the organization, and
which cannot be avoided as the entire organization depends on this one process.
The structure of financial department is as follows:
Senior
Finance
Manager
Deputy Senior
Finance Finance Accounts
Manager Manager Officer
We have analyzed the financial statements of Neon Paints for the last six years and those of the
competitors in order to come up with some implications of the data represented. The company has a
track record of profitability, transparency in operations and strong balance sheet. Factors that have
been given emphasis here include the low per capita consumption of paints (1.0 kilogram), growth in
construction sector (it is being offered industry status) & growth in the auto/white goods market
respectively spurring demand for decorative & industrial paints. The impact of recent issues &
trends (like excise duty rationalizations, quality consciousness in user segments) on the industry
dynamics can also be seen.
The industry has also witnessed increased activity in the industrial variety of paints with the entry of
Multi-National Companies in auto, consumer durables etc, which has been gaining steadily over
decorative paints in the last one decade. Traditionally, Neon Paints has been the Competitor in the
Decorative Paints Segment. This segment however has been characterized by stagnant growth rates.
The fiscal is expected to grow at around 8 per cent. Traditionally, margins have also been lower in
this segment. But an important characteristic is the lower volatility of cash flows. The demand for
decorative paints is a function of the growth in construction activity and the demand for re-painting.
The growth in the construction activity leads to first-time demand for the new structures coming up.
The re-painting, or replacement, demand arises usually during festivals, when people paint their
homes. Therefore, the wider dispersion of consumers reduces the overall risk, leading to lower
volatility of cash flows. Housing Loan disbursements, tax incentives and lower levels of interest
rates would encourage the customers to invest in homes and thereby a growth in the construction
activity.
However, the propensity to re-paint houses seems to have dropped over the last few quarters because
of the deceleration in economic activity. Consumers seem to have decided to postpone their re-
painting decisions, affecting off-take.
Over the last few years, Neon Paints has been increasing its sales and promotional expenses. For
instance, sales and administrative expenses as a percentage of total sales have risen from around 10
per cent in 1993 to around 14 per cent in 2001. In the same time span, the share of expenditure on
advertisement rose from around 9 per cent to around 21 per cent. Given the current slowdown in
demand, the company is likely to put more pressure on the advertising effort to try and at least
maintain its current growth rates. In the recent past most major paint manufacturers, including Neon
Paints, have reduced prices of their products. The prevailing over-capacity situation in the world
markets for titanium dioxide, a major raw material for the paint sector, and the subsequent fall in
input prices have led to the reduction in prices.
The decision by the main players to pass on to customers the gains of the falling costs clearly
indicates a demand squeeze. Though demand is constrained, the company does not foresee this
situation to continue for long. The company has initiated steps to increase capacity, and acquisitions
cannot be ruled out. Therefore, in the medium- to long-term, the outlook continues to be positive.
There were some significant events in 2004-2005 which have impacted the company’s financial
position during the year. Inflation and shortage of raw materials, growth of the housing finance
sector supported by government policies, a longer painting season (with Diwali occurring in mid-
November as opposed to October in 2003) and introduction of VAT were some of the reasons for the
fluctuations observed. On the raw material front, the prices of crude oil were extremely volatile
throughout the year. Because of this, the prices of many raw materials and packing materials used by
the company witnessed a large unexpected surge.
Some of the effect of this price hike in Crude oil and raw materials is alleviated by the proposal in
the Budget that has reduced peak Customs duty from 20 per cent to 15 per cent and the appreciating
rupee. On the demand side, with the Budget announcing a deduction of up to Rs 1 lakh from the
taxable income, housing loans have become a compelling proposition. The fillip this would provide
to housing demand was a substantial plus for Neon Paints, as it derives a significant portion of its
revenues from the decorative paints space.
HUMAN RESOUCE DEPARTMENT
The human resource department is the department, which involves people, the most important
resources of the company.
The various processes which are involved in this Human resource department are as follows:
 Manpower recruitment.
 Manpower training and development
 Maintaining personal record of employees
 Deciding salaries and wages
 Employee welfare
RECRUITMENT
Recruitment is a process of searching for prospecting employees and stimulating them to apply for
jobs in an organization.
Objectives:
 Attract right skills and competencies at the right time for the right job.
 Helps to ensure that attitude and values matches with Neon Paints requirement.
Documents:
 Manpower requisition requirement.
 Resume of the candidates.
 Interview evaluation sheet.
Recruitment Process at Neon Paints:
Manpower Planning:
The HR manager plans the recruitment and estimate the required manpower for the store. The
manpower required for a particular job may depend on the departmental requirement for candidates
at the floor. Then the manpower requisition form is sent to the HR by the departmental managers.
Recruitment for the position of Team Members, Team Leaders, and sometimes even Assistant
Department Managers is done at the store by the HR head, Store Manager and Assistant Store
managers. However for the recruitment of higher posts like Department Managers, Assistant Store
managers and store manager, the selection is done at the zonal office
Sourcing of the candidates:

On the requirement of the departmental managers, HR searches for potential candidates to meet the
existing requirement.
The candidates along with the resumes are sourced from:
 Direct Application
 Employee Referrals
 Walk-in-interviews
 The applications received for all positions are maintained in the database.
Screening of Resume:
The resumes of the potential candidates are screened to identify the best alternative among the
candidates. The HR, to evaluate and identify candidates with required qualification and experience,
does preliminary screening. These shortlisted resumes are forwarded to the respective departmental
managers. The forwarded resumes are then screened by them for the know-how and matching it with
their respective department requirement
SELECTION
Selection is the process to choose the individual who can most successfully perform the job from the
pool of qualified candidates.

All candidates have to undergo a selection process. This process comprises of the the written test
followed by group discussion, role play and the final interview.
The selection procedure involves the functions and devices adopted in a given company to ascertain
whether the candidates’ specifications are matched with the job specifications and requirement or
not.
Selection Procedure
HR Interview:
The HR interview mainly conducted by the Store HR manager, evaluates the inter-personal skills,
communicational skills, presentation skills, work motivation and other skills of the candidate.
Departmental Interview:
The departmental interview is conducted by the respective department manager to which the
candidate is going to place after the final interview. The department manager evaluates the
convincing skills, communicational skills and product knowledge skills of the candidates and gives
feedback to the HR manager. Based on the evaluation and ratings of the department manager the HR
manager will Place candidate into the department where vacancy is available.
Final Interview:
A final interview, if required is conducted by the Store manager before the induction of the selected
candidate to the company.
MAN POWER TRAINING AND DEVOLPMENT:
The main idea behind this program is to develop knowledge, skill and attitude required by an
individual to perform adequately a given task. This training program has been successfully
improving the performance of the employee and which in turn has enhanced the organizational
performance.
Various training programs along with the written test at each of the training levels have been
designs. They are cashiering training, group philosophy, training on retail business, values, sales
trainee, polices, product knowledge etc.
MAINTAINING EMPLOYEE RECORDS
The personal information of each employee is maintained in the SAP. Information related to leaves,
provident fund, gratuity, Employee state insurance, Bonus, Salary, Personal loan etc. is maintained
by the HR department.
DECIDING SALARY AND WAGES
The salary is finalized considering the following factors:
 Current salary level.
 Qualification and Experience.
 Level at which the job is offered.
 Existing salary levels in the organization.
 Market Trends.
Various leaves are available to the employees like casual leave, sick leave, earned leave, maternity
leave, all purpose leave, paid holiday, compensatory off and weekly off. Any changes in the salary
are made on the basis of appraisal and overall rating of the employees.
EMPLOYEE WELFARE
Every organization conducts welfare activities for its employees. The welfare activities in Neon
Paints are unique by themselves. Following are the welfare activities in Neon Paints
 Award to staff who help in pointing pilferage
 Cultural activities to provide scope for their hidden talents.
 Long Term service awards.
 Birthday Celebrations.
 Yearly party.
 Extra benefits for night shift employees.

The employees of your Company are important and valuable assets and have contributed
significantly in achieving sustained growth over the years. During the year 2009-10, significant
advancements were made on multiple fronts in different Human Resources (HR) processes. To
enable better interface, initiatives like introduction of HR Help Desk, Employee Self Service and e-
Learning applications were done during the year. People development has been a key element in the
DNA of your Company. While each and every employee plays a part in scripting her/his
'Development', certain focused activities are also carried out to ensure synergy and growth. E-
Learning was introduced in your Company during the year 2009-10 to meet the ever-growing
diverse developmental needs of the organization that is spread across multiple locations. The year
also saw the stabilization of the Performance Management System that was put in place during the
previous year with greater ownership and competence.
During the year, the industrial relations at all the plants of your Company continued to be cordial.
The year that went by has seen your Company, move many notches in putting in place the basics that
automatically set your Company up for continuing and augmenting superlative people oriented
action in the years to come.
Corporate social responsibility
Today's business environment demands that corporate play a pivotal role in shouldering social
responsibility. You will be happy to learn that in the year under review your Company executed
several Corporate Social Responsibility (CSR) programmers for the benefit of the communities
where your Company operates. Your Company's CSR initiatives primarily focused on three core
areas: Water Conservation, Aged Care and Education. The Total Water Management (TWM) Centre
located in the premises of the Company's manufacturing facility at Bhandup, Mumbai has been
championing the issue of water conservation; informing and demonstrating techniques of water
harvesting to the public at large.
A large number of concerned citizens ranging from representatives of government bodies, housing
societies, corporate and even school students have visited the TWM Centre to obtain a holistic
perspective on water management. The Company has also organized and participated in numerous
seminars to create awareness on this fast depleting natural resource. Your Company continues to
operate Mobile Medicare Units around the Patancheru (Andhra Pradesh), Kasna (Uttar Pradesh),
Sriperumbudur (Tamil Nadu) and Ankles war (Gujarat) plants which provide health care to the
elders in the villages around the plant.
These units provide regular medical checkups and distribute medicines at nodal points in these
villages and if required, even go to the door steps of the needy elders in the villages. In the area
around the Sriperumbudur plant, this initiative is being administered in collaboration with Help Age
India, an NGO. Additionally, other aids like dentures, cataract surgeries, hearing aids, wheel chairs,
walking sticks etc. are also being provided to the elderly. Camps are also held to involve the elders
in activities which provide them joy and a feeling of inclusion within the society. Your Company is
also actively involved in upgrading the infrastructure facilities in schools near its plants to facilitate
proper and unhindered education of children staying in villages in the vicinity of the plants.
Information technology
During 2009-10, your Company has setup and stabilized two centralized Customer Contact Centers
for improving servicing to its dealers. The contact centers have been provided with advanced
telephony solutions with integration with the Company's backend applications. This has allowed
your Company to standardize the order taking process and provide dealers with a uniform, agile and
improved experience of interacting with the Company. This has also given the capability to improve
the speed of enabling new services being offered to the dealers and end consumers.
The Rohtak plant, which was commissioned in April 2010, has been implemented using Advanced
Manufacturing Execution Systems which optimizes the material flow controls used in paint
manufacturing. This will improve the throughput of the plant and provide real time information
visibility of operations. As stated above, with the increasing global focus on the environment and its
preservation, your Company has implemented an Environment, Health and Safety (EHS) system to
streamline the processes, monitor compliance to standards and report on various control parameters.
While your Company continues to strengthen existing systems and processes to drive efficiencies,
during the year under review, your Company has also invested towards building a robust
infrastructure to manage structured and unstructured information in the organization. This will be
implemented in phases in the next 18 months.

The structure of information & systems department is as follows:
President
Senior
manager
In charge
IT
Internal control systems and their adequacy
The Company is committed to ensuring comprehensive internal controls across its operations to
ensure that all assets are safeguarded and protected against loss from unauthorized use or
disposition. Towards this end, it has deployed:

 A well-defined control structure using a mix of manual and automated control
systems.
 Well-defined procedures to carry out and approve financial transactions.
 Well-defined review mechanisms at different levels in the hierarchy on all aspects of
Company performance. )
 Shared services model implemented for the Company with the objective of improving
controls and centralizing payments.
 Independent Internal audit department continuously monitoring and reporting on the
adequacy or otherwise of internal control processes across the business units.
 A risk based approach towards developing an Audit Plan for the Company and its
subsidiaries which is presented to the Audit Committee for their approval and
feedback.
 A blend of process audits and operational audits covering both domestic and
international operations to ensure true and fair reporting and compliance with
regulatory requirements as well as internal policies.
 A mechanism to bring significant observations along with any action plan identified
by the management to the attention of the Audit Committee for review and guidance
at periodic intervals.
Research & development
The Company is executing an integrated strategy for technology development and deployment. The
technology function is supporting your Company's strategy around four missions: technology
development, development of substantially new products, productivity improvement and cost
reduction.
The focus for your Company in the financial year 2009-10 had been to exploit and leverage the
results of technology development and platform programmers and set the stage for a shift towards
eco friendly products. A number of those new concepts will be incorporated in products to be
launched next year. This is to allow the Company to meet its mid and long term strategic goals.
Those capabilities, built on the technology trends and customers requirements, made possible the
development of substantially new products and productivity improvements in manufacturing. The
technology group also put a renewed emphasis on rejuvenating the products portfolio in support of
the joint venture. Furthermore, the integration of the overseas technical groups has continued and
their support has increased to leverage the Company capabilities. The removal of lead has been
extended to products sold in overseas units.
Your Company will continue to strengthen collaboration with research organizations to accelerate
progress. Some of those programmers are bearing fruits and will enhance the overall technical
capabilities in the area of resins and emulsions development. The Company has been successful in
increasing its presence in international forums through publications in peer review journals. The
recognition of the work of its scientists has helped shape an image of the organization that attracts
competent and committed scientists. Your Company scientists were recognized with the Gordon
Award for their working the area of self cleaning paints.
Marketing management:
These countries and is the largest paint company in ten overseas markets. Neon Paints operates in
five regions across the world viz. South Asia, Southeast Asia, South Pacific, Middle East and
Caribbean region through the five corporate brands viz. Neon Paints, Berger International, SCIB
Paints, Apco Coatings and Tubman’s. In ten markets, it operates through its subsidiary, Berger
International Limited; in Egypt through SCIB Paints; in five markets in the South Pacific it operates
through Apco Coatings and in Fiji and Samoa it also operates through Tubman’s.
The countries that Neon Paints has presence are as follows:
South Asia: - Bangladesh, Nepal, and Sri Lanka
South East Asia: China, Malaysia, Singapore and Thailand
Caribbean Islands: Barbados, Jamaica, Trinidad and Tobago
Middle East: Bahrain, Egypt, Oman and United Arab Emirates
South Pacific: Australia, Fiji, Solomon Islands, Samoa Islands, Tonga and Vanuatu
Sales: Most of its revenue from outside India comes from the Middle East
SWOT ANALYSIS OF NEON PAINTS:
SWOT analysis is a basic, straightforward model that provides direction and serves
as a basis for the development of marketing plans. It accomplishes this by assessing an organizations
strengths (what an organization can do) and weaknesses (what an organization cannot do) in addition
to opportunities (potential favorable conditions for an organization) and threats (potential
unfavorable conditions for an organization). SWOT analysis is an important step in planning and its
value is often underestimated despite the simplicity in creation. The role of SWOT analysis is to take
the information from the environmental analysis and separate it into internal issues (strengths and
weaknesses) and external issues (opportunities and threats). SWOT analysis is done for a company,
to find out its overall Strengths, Weaknesses, Threats and opportunities leading to gauging the
competitive potential of the company. The SWOT Analysis enables a company to recognize its
market standing and adopt strategies accordingly. Here SWOT analysis of Neon Paints is made to
understand the positioning of the company better.
Strengths:
 Competitor with 15% market share in the organized sector.
 Comprehensive nation wide coverage of the market – urban, semi-urban and rural areas.
They have quite a number of brands, covering all segments and filling all gaps. For example,
they have brands in different prices lots like Utsav for rural lower-end markets and Apcolite
for high end-markets.
 Widest product range in terms of products, shades, pack sizes - 40 different decorative, some
in 150 shades, 8 different pack sizes.
 Unlike its competitors who concentrate only in urban areas, Neon paints are found every
where. It has a country wide distribution
 A network of 7,000 dealers spread all over the country. For this, they have large network of
regional offices and company depots and sales personnel to service the nationwide dealer
network.
 Strong in inventory control Neon paints average inventory level is 28 days sales against 51
days for the industry. Neon paints has 45% edge in inventory carrying costs.
 The pricing strategy is oriented to middle/lower end consumers.
 Neon paints is quite strong in production-marketing coordination. Their policy of
offering tailor-made products to suit customer need has resulted in an ever
growing product range.
 In-house production, no outsourcing, high reliability in suppliers, superior in quality
assurance.
 High caliber human resource employs maximum number of MBAs, as a proportion to total
number of employees.
 Corporate reputation has been a major strength for Neon paints. The image is that of
a successful and well-managed company. They have won many accolades and awards.
For example, 2004 Corporate Excellence Award from ET, IDBI study rated Neon paints
as one of India’s most excellent companies, another study rated Neon paints among top 5
paint manufacturers in the India. They have an enviable track record in breaking
the position of MNCs in the Indian paint industry.

Weaknesses:
 In industrial paints, Neon paint has only a 8% market share. It is far behind the leader
Goodlass Nerolac, which has a market share of 43%. Since this is going to be the major
growth segment in the future, a lag in this segment will end up as a major weakness.
 Widening product mix puts strain on production distribution, accounting and administration.
 Innovation in developing new products is adequate.
 Neon paints has a major weakness on the technology front in industrial paints. Most paint
firms have technology tie-ups with manufacturers abroad. For example, Goodlass Nerolac
has a tie-up with Kansai paints, which has provided the company with Cathodic Electro
Deposition (CED) technology. Since Kansai is the supplier to Suzuki, Japan, Goodlass with
its Kansai connection finds it easy to tap Maruti in India. Neon paint has not been able to
make any significant advances either with Maruti or the auto segment in general. Berger has
a technical tie up with Herbets, Germany, for automotive paints, Valspar Corp, USA for
heavy-duty coatings and Teodur NV, Holland for powder coatings.
 Ever expanding product mix throws some strain on inventory management.
 Seasonal demand and hence in off seasons it can lead to cash flow problems.
 No tie up with foreign manufactures. Through it has units in several countries.
Opportunities:
 Acquiring/ increasing market share in Industrial paint sector.
 Developing market in automobile industry, which accounts for 50% of Industrial paint
market.
 Neon paint has always encashed on opportunities that have come its way. It has
maintained a product profile keeping the market trends in picture. It shifted to predominance
in industrial paints than industrial paints than in decorative paints
as was evident from the production figures of 1998-99.
 The automobile industry accounted for 50% of the industrial paint market.
Threats:
 Domination of few foreign companies.
 Since both Goodlass Nerolac (43%) and Berger’s (14%) have a higher market share than
Neon Paints (14%), it is possible that in the future, they may capture the entire industrial
paint market.
 Competitors have gone in for hi-tech with instacolour spot mixing. For example, J&N’s
instacolour offers 626 shades.
 Automated paint blending in retail points already there. ICI’s Touch Colour and Berger’s
Colour Bank are indicative of this.
 Competition is catching up fast, hi-tech facilities gives abundant choices.
The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far out weigh
‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and threats
are transitory. Any investment idea can do well only when you have three essential ingredients: (the
ability to take risks), innovative approach (in product lines and marketing) and values (of
quality/ethics).
Benjamin Franklin discovered electricity, but it was the man who invented the meter that really
made the money.

Neon is an upcoming company which has created its own place in the lists if top brands of our
country with high quality and varied products it as emerged successfully. The company has come a
long way since its small beginnings .Today it is double the size of any other
Paint company in India.
 Company should properly use the advertising tools. From use of the advertising tools it can
be more affect to the customer awareness.
 There are more people are aware of Neon paint product. But it is not efficient.
 There are major competitor to compete the Neon like the Neon, Nerolac and Berger. So the
company has to make the marketing strategy.
 Customer has given the rank for the new paint product products to Neon paint product. So
the people are expected more quality, brand loyalty, colour, validity for the new products. So
the company should keep in the mind this thing. 54% customer has give the rank to quality,
40% customer has give the rank to brand loyalty, 45% has give shades, and then 56% has
give 1st rank to validity. So company has to keep in the mind customer expectation.
 The company has to maintain properly the quality, shades and price as a customer
expectation.
Suggestions:
 Majority of the people are ready to purchase a Neon paint product in future therefore there is
a lot of demand for paint product, so there is large potential market for Paint product in
Mehsana. Hence company can start formulating strategies to enter and grab the market.
 Most of the people are aware of Neon paint product, People are also aware of which kind of
paint product is available in market? Because of the major competitor the company have to
use the marketing strategy and properly use the advertising tools for create the awareness.
 Awareness of the paint product can be creates more for the Neon paint product in the future.
To create the awareness they can use the different kind of tools for the advertising.
 Due to high in the price of the paint product most of the respondents they are move to
another paint product products, which is much costly. So the customer is expected it should
be easy in the price.
 While purchasing paint product Price is the most influential factors. History and image of the
company, word of mouth, Brand loyalty is also influential factors while customer are
purchase the paint product.

2009 started off grimly for the paint and coatings market but it slowly started to pick up pace
towards the end of the year. With a growth rate of 8to11 percent. This was aided mainly by the
strong driving forces of China and India as well as developing growth from key Neon countries such
as Indonesia and Vietnam. Industry players are optimistic on seeing double digit growth once again
in 2011. Asia being a developing industrial nation has many key growth sectors that aid the growth
of the paint and coatings market. Some of the key industrial sectors monitored are construction,
steel, marine, automotive and furniture
In terms of industry specifics, the coming year will see the industry players creating a competitive
edge by introducing new innovative products in the market with enhanced "sustainability" features.
Many have already set in place strategies to recapture market share after a 2 year lull period. Green
based technology will see high growth; particularly for powder and water based type coatings. If
these strategies Neon paint also follows then it can emerge as tuff competitors for its other
substitutes companies
 www.google.com
 www.wikipedia.com
 www.neon.com
 Financial management- Khan and Jain, I M Pandey
 Marketing management text by Philip Kotler
 Organization behavior text by Stephen Robbins
 Human resource management by Stephen Taylor
 Production & operations management by Richard B. Chase, Nicholas J. Aquilano
 weekly magazines

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1ORGANISTION STUDY ON NEON PAINTS PVT.

NEON PAINTS VIJAYAWADA

Master of Business Administration

Name : SIVA PRASAD MEKALA C

Reg No. : 09P35H0250

Partner Institution : ACHARYA LEADERSHIP AND RESEARCH INSTITUTE

Under the guidance of

INTERNAL GUIDE EXTERNAL GUIDE

Prof. PUNEETA GOEL Mr. SUDHEER KUMAR

Centre for Participatory and Online Programs

Coimbatore – 641 046

(Month & Year) : DECEMBER 2010

any candidate of any University.

Signature of the candidate

Name : SIVA PRASAD MEKALA C

Reg No. : 09P35H0250

Course with Specialization: MBA

Date : Signature of the Guide

during the project.

SIVA PRASAD MEKALA C

being the competitor and an innovative marketing company.

the industry followed by Goodlass Nerolac and ICI respectively.

PARTICULARS PAGE NO:

countless of hundred of thousands to fulfill the varied requirements of hundreds of thousands of

It is more than twice the size of its nearest competitor

• It is one of the most admired companies in India

ERP & i2 - SCM solution

Line; Most admired company to work for by ET-BT survey, 2000

End use classification:

decorative paints are enamels,

marine paints, anti corrosive metal coatings.

Solvent based classification:

gaining popularity due to their environment friendliness.

mainly in the white goods industry.

Decorative Paints Segment Market Size (Rs mn)

Wall Finishes 4730

Wood Finishes 430

INDIAN PAINT INDUSTRIES SECTOR REPORT

Industrial Paints Segment Market Size (Rs mn)

OVERVIEW OF PAINT INDUSTRY

 The Indian paint industry is a Rs 49 Billion sector

average per capita consumption is 15 kg.

percent being in the hands of nearly 2000 small – scale units.

the paint and the additives give it special resistance properties.

Shalimar with 1 and 6 per cent shares.

India, PAL Peugeot and Bajaj Auto.

respectively. Shalimar too, has an 8 per cent share.

(architectural) paints and industrial paints.

skewed towards the industrial segment.

Products of this segment are relatively price sensitive.

months from June to August.

supplier of paints to Opel Astra.

formed a JV with PPG Industries Inc to service the automotive OEMs.

acquired by by E I Du Pont de Nemours of the US. Interestingly, Du Pont, which is a leader in

and Oshima Kogyo Co Ltd, Japan.

DEMAND AND SUPPLY SCENARIO

refurbishment like automobiles, consumer durables, shipping engineering

MAJOR PLAYERS AND THEIR SHARES

The major players existing in industry are:

2. Goodlass Nerolac paints.

5. Jenson and Nicholson paints.

the industrial paint segment.