Analysis of Paint Industry
Presented by: Group 8
• Alisha (09PG244)
• Monil Modi (09PG326)
• Rakesh (09PG039)
• Prabhava Ram (09PG430)
• Subhanwita Pal (09PG411)
Introduction
The size of the paints market in India is at Rs 110 billion, with
the contribution of the organized and unorganized segments in
the ratio of 65:35.
Decorative and industrial paints are the segments within the sector,
in a 70:30 proportion.
APIL dominates the decorative segment with a 38 per cent
market share.
GNPL dominates the industrial paints segment with 41 per cent
market share.
OBJECTIVES OF THE STUDY:
To throw light on the emergence of the paint and
coatings industry in India.
To study the global view of paint and coatings
industry and the post recession impact on this
industry
Study of the key financial ratios of the leading and
the lagging companies under paint and coatings
industry.
METHODOLOGY OF STUDY
An in depth analysis of paints and coatings industry based
on the secondary data.
The selection of top three and mediocre two companies
have been taken on the basis of sales turnover of the
previous years
Data from Capitaline and company annual reports have
been taken as a base for quantitative analysis.
Both Qualitative and Quantitative analysis for these
companies have been done.
GLOBAL SCENARIO
The global Paint industry is estimated to be
around $93 billion in the year 2009.
The sales volume increased by around 5 %
and the revenue by around 7 %
The growth of this industry almost became
stagnant during the global turndown.
Chart Showing Total Sales Volume
14%
35%
21%
30%
Latin America Asia pacific Europe NAFTA
PAINT INDUSTRY IN INDIA
CONTENT
FACTORS
MARKET DRIVING
STRUCTURE GROWTH IN
PAINT INDUSTRY
COMPOSITION
FEATURES OF
OF PAINT
PAINT INDUSTRY
INDUSTRY
MARKET COST
PROFILE STRUCTURE
MARKET STRUCTURE
PAINT • ORGANIZED BUSINESS(Rs.72.8
bn)
INDUSTRY • UNORGANIZED
SIZE(Rs.110 BUSINESS(Rs.39.2 bn)
bn)
• DECORATIVE-70%(HOUSING
AND CONSTRUCTION
SECTOR)
PRODUCT • INDUSTRIAL-30%
(AUTOMOTIVE AND
CONSUMER DURABLES)
COMPOSITION OF PAINT INDUSTRY
Enamels (50%)
Distemper(19%)
Decorative Emulsions(17%)
Exterior Coating
(12%)
Wood Finish(2%)
PAINTS
Automative Paints(50%)
High Performance Coating (30%)
Industrial Powder Coating (10%)
Marine Paints(5%)
Coil Coating(5%)
MARKET PROFILE
ON THE BASIS OF SIZE:
1. Leaders in the organized sector are
APIL,GNPL,BERGER PAINTS, J&N LTD,
ICI (INDIA).
2. Asian paints -33 per cent
Berger Group and ICI -17 per cent each.
GNPL -15 percent
Contd.
ON THE BASIS OF PRODUCTS:
1. APIL dominates the decorative segment with a 38 per
cent market share. GNPL, the number-two in the
decorative segment, with a 14 per cent market share.
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.
2. GNPL dominates the industrial paints segment with 41
per cent market share. APIL holds 15 percent market
share. 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.
COST STRUCTURE
FEATURES OF PAINT INDUSTRY
SEASONAL PRICE SENSITIVE
HIGH WORKING STRONG
CAPITAL DISTRIBUTION
REQUIREMENT NETWORK
FACTORS DRIVING GROWTH IN THE
INDAIN PAINT INDUSTRY
CONSTRUCTION URBANIZATION INDUSTRIALIZATION
INCREASE IN PER NUCLEAR
TECHNOLOGY CAPITA INCOME FAMILIES
INDUSTRY ANALYSIS
Expected growth of 11-12% due to
•Increased demand 1.22 - 2 million ton
•OEM sector growth 15%
•Automobile sector growth
•Reduced excise duty
SWOT
STRENGTHS
Urbanization
Strong industrial growth
Infrastructure growth
Increase in manufacture
Rise in income
WEAKNESS
Per capita consumption
Poor Distribution
Raw material unavailability
THREATS
Environmental issues
Nippon
Foreign invade
OPPORTUNITY
Industrial segment growth upto 50: 50
30 % of total demand repainting ,exterior
coatings segment.
Financial institution leverage on housing
loan
Canning industry
Marine coating
PEST ANALYSIS
POLITICAL
Largest Democracy.
Taxation policy
Fair amount of political stability.
Sound legal system – a factor
contributing large foreign direct investment.
ECONOMIC
CAGR of 12-13% after 1992,and in the next
five years, it is expected to grow at a CAGR
of 11-12%.
The industry has appositive correlation with
the country's gross domestic product (GDP)
as both have the same growth drivers.
SOCIAL
Price sensitivity factors
Raw material import
Rise in price of titanium oxide, phalic
anhydride.
SEASONAL FACTOR
TECHNOLOGY
Technology collaboration
All the paint majors have tie-ups with
global paint leaders for technical know-
how.
Example –
Berger – Nippon
ICI – Herbets.
Debt-Equity Ratio
2.5
1.5
0.5
0
2005 2006 2007 2008 2009
Current Ratio
2.5
1.5
0.5
0
2005 2006 2007 2008 2009
Fixed Asset Turnover Ratio
7
0
2005 2006 2007 2008 2009
Inventory Turn Over Ratio
18
16
14
12
10
0
2005 2006 2007 2008 2009
Debtors Turnover Ratio
20
18
16
14
12
10
0
2005 2006 2007 2008 2009
Interest Coverage Ratio
70
60
50
40
30
20
10
0
2005 2006 2007 2008 2009
-10
Asian Paints
• Ranked 24th worldwide in the paint industry and
is the No. 1 paint company in India.
•International Operations: operates in 22 countries
•Joint Ventures: Technological advantage
•Manufacturing Capacity: Economies of Scale.
•New Product Launch: Color World, Royale Play.
Kansai Nerolac
Second largest coating company in India
with a marke share of over 20%. It is the
leader in powder coatings.
Dealer Network: Has a wide network of
around 11,000 Dealers.
Strategic Alliances: For technology
upgradation.
Distribution Network: Sales division
across the nation to cater to local demand.
Manufacturing Strength: Total installed
capacity is 173900 Mt/pa and is expected to
Berger Paints
Third largest paint manufacturer.
More than 12000 paint retailers and 75
stock points.
Second largest decorative paint
player.
Gained entry into industrial paints
business by acquisition of industrial
paints division of ICI.
Invested in Berger Cyprus to start
operations in Russia.
Shalimar Paints
The Company has a wide product range in
both Architectural and Industrial sectors.
Under the brand name "Color Space" the
Company offers more than 9000 shades
across all product lines.
Paint systems for every application - interior
or exterior, for every surface - concrete,
plaster, metal or wood.
R&D development in industrial paint
segment (Oil & Gas , Fertilizers, Hydro
Power plants and Marine sector)
Hard Castle & Waud Mfg Co.
Three divisions- synthetic resins, metal
processing, and sealants.
Technical collaboration agreement with
Oxyplast, Belgium for improving
technology to produce special resins for
coil coating.
Conclusion
• The paint industry witnessed strong growth
on account of high economic growth.
• Companies that had prominent presence in
industrial paint segment suffered due to
slump in auto and consumer durables
segment.
• Importance of technology is growing.
• Foreign players entering the Indian market
leads to expansion of the organised sector.
Future Outlook
• Favorable Government policy towards housing
and infrastructure sector.
• Volatile prices of raw materials.
• Improved global scenario.
• Consumer demand increases as government
increased the tax slabs and leads to increase
in per capita income.
• Joint ventures are expected to increase as
there is demand for improved technology.
SOURCES
The Conservation of Acrylic Emulsion Paintings: A Literature Review
(www.goldenpaints.com/conservation/conservation.pdf)
Elizabeth jablonski, Tom learner and James Hayes and Mark Golden
Mukherjee P (2007),’Colourful Times for paint Industry’ Retrieved from
http://www.rediff.com/money/2007/may/30paint.htm.
Paint industry in India has grown to see a double digit growth year after year (
http://www.financialexpress.com/news/paint-industry-has-grown-to-see-a-doubledigit-gro
wth-yearafteryear/161438/
) Posted: Sunday, Apr 09, 2006.
Parthasarathy. D (2008).” The Indian Paint Industry”, Coatings world.
http://findarticles.com/p/articles/mi_hb053/is_5_13/ai_n29437901/pg_2?tag=content;co1
1
Asian Paints Topped FMCG Sector: (Survey by Franklin Templeton Mutual Fund) – TOI
(http://timesofindia.indiatimes.com/biz/india-business/Asian-Paints-topped-FMCG-
sector-Survey/articleshow/36081045.cms)
http://www.coatingsworld.com/articles/2007/07/2007-topcompanies-report.php
www.asianpaints.com
CONTD….
www.capitaline.com
www.force10networks.com/company/customer_profiles/pdf/cp_AsianPaints.pdf
http://www.i2.com/assets/pdf/CSS_PRO_Asian_Paints_css6846.pdf
Article by Sutanuka Ghosal, Leading paint makers likely to jack up prices
published on 14 May 2008, on Times Now News.
http://www.shalimarpaints.com/images/pdf/Annexure%20-%20II%20To%20Directo
r's%20Reports_2006.pdf
Companies annual reports
www.nerolac.com/index.jsp?page=home
www.akzonobel.com
ACMIIL Report on Paint Industry Published on 15 April 2008.
www.crisil.com
