Indian Paint Industry

Profile I

• Total Market size - US$1400 million
   - Organized Sector - 55%
   - Unorganized Sector - 45%

• Organized Sector dominates by siz large players

• Unorganized Sector comprising about 2500 units manufacturing various categories of paints.

• Total Volume of the Market - 600,000MT

Profile II

• Organized Sector can be divided into 2 distinct segments
   -  Induatrial Segment growing at 15% (US$ 230 million)
   -  Architectural Segment growing at 8% (US$ 500 million)

• Overall growth is 10 to 12%

• Basic of competition in Architectural segment
   - Distribution
   - Brand Image
   - Range of Products

Profile III

• Basic of competition in Industrial Segment
   - Access to technology
   - Technical Servicing

• Compounded sales volume growth of the organized Sector was 12% in the last siz years.

• Entry barriers of decorative paints import
   - Brand quity of present players
   - Distribution network
   - Cost of modification of products

• Top six manufacturers have expanded capacity by 50% to service peak demands.

• Yet, after opening up of the Indian market, some multinational paint companies are making efforts to get a foothold in the Indian market.

Organised Sector Market Shares - Value

• Asian Paints 37%

• Goodlass Nerolac 15.9%

• Berger Paints 13.8%

• ICI 11%

• Jenson & Nicholson 5.7%

• Shalimar 4%

• Others 12%

Market Segment

• Architectural 70%

• Industrial 30%

Architectural Sector Composition

• Enamels 50%

• Distemper 19%

• Emulsions 17%

• Exterior Coatings 12%

• Wood Finishes 2%

Architectural Sector Features

• Enamels Steady growth

• Emulsions Shift from distemper and enamels to emulsions. High growth area

• Distempers High growth in low priced low quality distempers as consumers are upgrading from limewash

• Exteriors Exterior emulsion fastest growing segment in the Indin Paint market.

Industrial Sector Composition

• Automotive Paints - 50%

• High Performance Coating - 30%

• Powder Coating - 10%

• Coil Coating - 5%

• Marine Paints - 5%

Automotive Sector

High growth sector with a number of new entrants like Mercedes Benz, Mitsubishi, Daewoo, Hyundai, Honda, Fiat, General Motors, Ford. However, recently there is some slackness in Auto demands. Two wheeler market booming due to demend from large Indian middle class.

Powder Coatings
Increase growth due to increased sales of white goods and auto ancillaries.

High Performance Coatings
Steady growth due to increase investments in refinery segment and power sectors, particularly Thermal and Nuclear.

Growth Areas for the Indian Paint Industry

• Automatic Tinting System

• Indian Rural Market

• Auto OEM Finish

• Auto Refinish

• Exterior Coatings

New Developments

• New Foreign Equity

• Kansai Paints acquired controlling interest in Goodlass Nerolac - the second largest Indian paint company. There are talks about other companies also being taken over by foreign companies. Some foreign companies have actually opened shops in India.

Tinting Machines

• Concept accepted by the Indian Market.

• More than 1500 machines installed in the last five years.

• Has changed face of Indian Paint Retaling.