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CONTENTS
SR NO. TOPIC
2 TYPES OF PAINTS
3 TECHNOLOGY
6 FUTURE OUTLOOK
7 CONTACT
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1. OVERVIEW OF THE PAINTS INDUSTRY
• The Indian paints industry is currently placed at Rs. 85.0 billion and has been
showing consistent double-digit growth from 1991. The organized sector
consists of 65-70% whereas the unorganized sector still controls a large
portion of 30-35%.
• The growth of the domestic paint industry is attributed to the boom in the
housing sector and the strong growth in the automobile sector. The
automobile sector has done well over past 10-years with an average growth of
7-8%. The auto sector is likely to grow at 8-10% due to healthy growth in 2-
wheeler and car segments. However, the volume growth in the paint industry
may not be in line with the auto sector growth, as the quantity of paint per
vehicle is declining over a period, due to continuous innovations.
• Around 70% of the domestic paint industry revenues come from the
decorative segment, whereas the industrial segment constitutes around 30%.
In FY05, the manufacturing sector has shown good activity with new projects
in roads, ports and industrial segments.
• The Indian paint industry has a huge potential, as the per capita consumption
of paint in India is 800-900 grams compared to 15-25 kg in the developed
countries. The domestic paint industry is poised for good growth in the coming
years.
• The Indian paint industry is governed by 4 major players and is largely
dependent on the crude oil prices as most of the raw materials are derived
from crude oil. The prices of derivatives of crude oil rose more than crude oil
due to the lag effect. Despite the sharp rise in the crude oil prices in FY05, the
industry has reported good growth.
• The Indian paint industry has grown at CAGR of 10% or 1.5-2.0x GDP growth.
With the expected 7-8% GDP growth in FY06, the industry is likely to grow at
10.5-12.0%.
• The decorative segment is likely to do better than the industrial segment. The
decorative segment is likely to grow at 12% whereas the industrial segment is
expected to grow by 8 -10%.
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2. TYPES OF PAINTS
Industrial Paints
• Include powder coatings, high performance coating and automotive and
marine paints
• Two-thirds of the industrial paints produced in the country are automotive
paints.
• Technological superiority and tie-up with automobile manufacturers
3. TECHNOLOGY
Dealers and contractors play a very important role in the purchase decision for
paints, as they are major influencers.
The town-wise mapping of dealer network is required to ensure increase in the width
of the network, that is, number of dealers across the country; and the depth, that is,
to give consumers a better choice of products.
The installation of tinting machines has been an important initiative in increasing the
penetration and helping the dealers to serve the consumers better, while decreasing
the inventory costs. This will increase decorative sale.
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The latest value-added service being provided by the dealer network is the magic
eye or spectrophotometer. With the help of this system, the customer can walk in
with a shade in mind and walk out with the paint within minutes. The machine can
conjure up 60,00,000 different colours, as many as the naked eye can detect. This
goes with commitment to provide technological breakthroughs to consumers and will
definitely give the consumers an edge in the market.
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4.1 Market Segment
• Architectural 70%
• Industrial 30%
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4.6 Powder Coatings
Increase growth due to increased sales of white goods and auto ancillaries.
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4.12 Key Domestic players in Branded paints
• Asian Paints 37%
• Goodlass Nerolac 15.9%
• Berger Paints 13.8%
• ICI 11%
• Jenson & Nicholson 5.7%
• Shalimar 4%
• Others 12%
(i) India’s Exports—Segment wise: India’s exports of paints and allied products in
the year 2005-06 registered a growth of 30.10 per cent over the previous year when
the same reached a level of Rs. 3,739.35 crore as against Rs. 2,874.22 crore.
Segment wise export trend during the period 2003-04 and 2005-06 shows that the
segment “Synthetic organic coloring matter, whether 6 or not clinically defined”
continue to dominate exports, and in the year 2005-06, this segment showed a
growth of 32.16 per cent over the previous year when the same reached a level of
Rs. 2,896.37 crore as against 2,191.64 crore.
The other segments showing a significant growth during the period included:
Prepared driers (589.74%), Glaziers’ putty, grafting putty, resin cements, caulking
compounds and other mastics (275.68%), Pigments Including metallic powders and
flakes) dispersed in non-aqueous media in liquid or paste (140.76%), Artists.
Students or signboard painter colours, modifying tints, amusement colours and the
like (132.92%), Paints and varnishes (including enamels and lacquers) based on
synthetic polymers or chemically modified (110.64%), Prepared pigments, opacities,
and colours, verifiable enamels and glazes (71.82%), and Color lakes; preparations
based on color lakes (64.23%). On the other, the segments registered a steep
decline during the period included: Paints and varnishes including enamels and
lacquers (based on synthetic polymers or chemically modified (50.98%), and Other
paints and varnishes (including enamels, lacquers and distempers (26.75%).
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Source: Compiled from the DGCI&S, “Monthly Statistics of Foreign Trade of India”,
Volume 1, Exports and Re-Exports.
(ii) India’s Exports—Country wise: Country wise exports trends, shows that USA
continues to be the largest market for India’s exports of paints and paints-based
products, and had registered a growth of 30.10 per cent in the year 2007-08 over the
previous year when same increased to Rs. 559.78 crore as against Rs. 404.86 crore
in the previous year. The other countries showing a robust growth during the period
included: Iran (133.31%), Kenya (117.03%), UAE (54.39%), Malaysia (38.57%), and
Netherland (27.20%). On the other, the countries registering a steep decline during
the period included: China (26.62%), Italy (21.28%), France (19.90%), and Germany
(16.09%).
6. FUTURE OUTLOOK
• Over the next few years, the ratio of industrial paints to decorative paints is
expected to be 50:50, more in line with the global trend. Currently it is 30:70.
With the decorative segment bottoming out, companies are increasingly
focusing on industrial paints
• Demand for paints from new housing is expected to constitute approximately
30 percent of total demand; the rest comes in from repainting, mainly after the
monsoon rains and before the festive season. This is a function of disposable
income, so improvement in rural incomes will boost the growth in the paint
sector. Lending institutions continue to make it easier for a consumer to
gather up the finances needed to buy homes.
• Within the decorative coatings segment, considerable growth is being
observed in the exterior coatings segment. Paint manufacturers have
launched premium products in this category, which are doing well due to
superior quality and durability.
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7. CONTACT FURTHER DETAILS:
Web: www.siddhimanagement.com
Email:info@siddhimanagement.com,pankajmuthe@gmail.com
Skype: muthep
Disclaimer: Some of the information is from published sources and it may have changed over a period of
time.SMC/Siddhi Management Consultants does not own any responsibility for the facts mentioned in this
report.
THANK YOU!
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