Indian Decorative Paint Industry

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

Decorative: Major segments in decorative include exterior wall paints, interior wall paints, wood finishes and enamel and ancillary products such as primers, putties etc.

Decorative paints account for over 70% of the overall paint market in India.

Demand for decorative paints arises from household painting, architectural and other display purposes.

Demand in the festive season (September-December) is significant, as compared to other periods.

Contd. 

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

Asian Paints Royale luxury Emulsion

Interior Paints (Emulsion)

Dulax Velvet Touch

Silk

Interior Paints (Distemper)

Tractor Distemper Bison DistemperBeauty Distemper

Interior Paints Metal & Wood (Enamel)

Apcolite Premium Gloss Enamel

Synthetic Enamel

Luxol

Gloss Premium Enamel

Exterior Paints

Tartaruga (Textured) Snowcem Plus (Cement)

Weather Shield MAXApex Ultima

Price of Products (Interior)Segment Product Price (per lt.) Company

Walls (Emulsion) Royal Rs. 360-450 Asian PaintsWalls (Emulsion) Velvet Touch Rs. 360-450 ICI DulaxWalls (Emulsion) Impression Rs. 360-450 Nerolac PaintsWalls (Emulsion) Silk Rs. 360-450 Berger PaintsWalls (Emulsion) Premium Rs. 250-280 Asian PaintsWalls (Emulsion) Super Smooth Rs. 250-280 ICI DulaxWalls (Distemper) Tractor Rs. 60-80 (per

lt.)Asian Paints

Walls (Distemper) Bison Rs. 65-80(per lt.)

Berger Paints

Metal & Woods Dulax Gloss Premium Enamel

Rs. 200-230 ICI Dulax

Metal & Woods Synthetic Enamel Rs. 200-270 Nerolac PaintsMetal & Woods Luxol Rs. 200-270 Berger PaintsMetal & Woods Apcolite Premium

Gloss EnamelRs. 200-270 Asian Paints

Price of Products (Exterior)

Segment Product Price (per lt.) Company

Walls (Emulsion) Apex Ultima Rs. 350-400 Asian Paints

Walls (Emulsion) Dulax weather Shield Max

Rs. 350-400

ICI Dulax

Walls (Emulsion) Apex Rs. 250-300 Asian Paints

Walls (Emulsion) Dulax weather Shield

Rs. 250-300 ICI Dulax

Walls (Emulsion) Weather coat All Guard

Rs. 250-300 Berger Paints

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%)

AutomobilesConsumer GoodsMarine Industry

(30%)

Components of Paints

Raw 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.

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 Nero-lac

Berger Paints

ICI Paints Shalimar Paints

Net Sales(FY2011) in Cr.

6607.2 2266.2 2096.2 1087.6 404.4

500150025003500450055006500

Net Sales(FY2011) in Cr.

Qua

ntity

Market Shares of Companies (Contd.)

32%

11%11%6%5%

35%

Asian PaintsKansai NerolacBerger PaintsICI PaintsOthersUnorganised

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.

Nerolac_led free.FLV

Conclusions

• 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.

• Decorative paints segment is expected to witness higher growth going forward. The incentives given by the government to the housing sector have benefited the housing sector immensely. This will benefit key players in the long term.

• 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.

References:

• www.indianmirror.com• www.bergerpaints.com• www.asianpaints.com• www.nerolac.com• www.competitiveness.in• www.stockshastra.moneyworks4me.com• www.equitymaster.com• Phulwari Paints, Bapuji Nagar, Bhubaneswar• Kunthia Brothers, Ravi Talkies, Bhubaneswar