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Analysis of Paint Industry, Modes of Packaging and Usage of TIN in Paint Industry

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A Study of paint industry in India and packaging in Tin -Cans. Preparation of template and forecasting of tinplate in the view of Tata Tinplate( The Tinplate Company of India Ltd.).

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Analysis of Paint Industry, Modes of Packaging and Usage of TIN in Paint Industry

  1. 1. 0 Submitted By Sautrik Dutta Mantrani Registration No. : 131300710036 of 2013-2014 Roll No. : 13000913036 Submitted for the partial fulfilment of the degree of Master of Business Administration From Techno India EM 4/1, Salt Lake, Sector – V, Kolkata – 700091. Under West Bengal University of Technology The Tinplate Company of India Limited A TATA Enterprise Analysis of Paint Industry, Modes of Packaging and Usage of TIN in The Sector
  2. 2. Page 1 Acknowledgement I am extremely indebted to The Tinplate Company of India Limited for providing me the opportunity to undertake the project work in their esteemed organization. I am extremely grateful for all the guidance provided by Mr. Abesh Chatterjee, Chief (Marketing and Sales), Mr. Amit Jain, Deputy Manager (Central Marketing) without whose help this project would not have been possible. I would like to express my sincere gratitude to Prof. Dr. Amit Kundu, Head of the Department, of MBA Department of Techno India, whose role as project guide was invaluable for the project. Thanks are also due to the Training and Placement Cell of MBA Department for all the assistance provided throughout the Summer Internship Programme. I would also like to convey my gratitude to all the teachers for providing us the technical skills that will always remain as our asset and to all non-teaching staff for their cordial support. I am extremely thankful for the keen interest Techno India, Saltlake took in advising me, for the books and reference materials provided, and for the moral support extended to me. Sautrik Dutta Mantrani University Registration No.: 131300710036 of 2013-2014 University Roll No.: 13000913036 Place: Techno India, Salt Lake Date: Techno India School of Management Studies Techno India, Sector-V, Salt Lake, Kolkata - 700 091 West Bengal, India.
  3. 3. Page 2 Approval This is certify that the project report “Analysis of Paint Industry, modes of packaging and usage of TIN in the sectors.” prepared under my supervision by Sautrik Dutta Mantrani, University Roll Number: 13000913036 be accepted in partial fulfilment for the degree of Masters of Business Management which is affiliated to West Bengal University of Technology. It is to be understood that by this approval, the undersigned does not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn thereof, but approves the report only for the purpose for which it has been submitted. Internal Guide: Prof. Dr. Amit Kundu Head of the Department School of Management Studies Techno India, Saltlake. Prof. Dr. Amit Kundu Head of the Department School of Management Studies Techno India, Saltlake. External Examiner Principal in Charge Prof..(Dr.) Rina Paladhi Techno India, Saltlake.
  4. 4. Page 3 Table of Content 1. Table of Content ...................................................................................................................................... 3 2. Introduction and Summery .................................................................................................................... 5 2.a. Executive Summery .................................................................................................................... 6 2.b. Introduction to the project and its objectives ............................................................................. 7 3. Company Profile ...................................................................................................................................... 8 3.a. Company Profile ......................................................................................................................... 9 3.b. TCIL Financial Performance Comparison ............................................................................... 12 3.c. Advantages of using TIN as packaging material ...................................................................... 12 3.d. Products of TCIL ...................................................................................................................... 13 3.e. Production Facility .................................................................................................................... 14 4. Selection of Project and Relevance of the study ................................................................................. 23 5. Research Methodology .......................................................................................................................... 25 5.a. Research Methodology Overview ............................................................................................ 26 5.b. Type of Research ...................................................................................................................... 26 6. Industry Study ....................................................................................................................................... 27 6.a. Paint market overview .............................................................................................................. 28 6.b. Paint market segmentation ....................................................................................................... 29 6.c. Performance of the paint market in Financial Year ‘13 ............................................................ 31 6.d. Future paint market projection (value wise & segment wise) .................................................. 32 6.e. Economic factor affecting paint market and correlation ........................................................... 36 6.f. Key players in Paint market ...................................................................................................... 39 6.f.i. Market Share ............................................................................................................... 46 6.f.ii. Paint Manufacturing Facility of Top 5 Companies in India (Mapping) .................... 47 6.f.iii. Comparative analysis of the top 5 players ................................................................ 47 6.g. Paint Packaging ........................................................................................................................ 50 6.h. Paint Packaging Trends ............................................................................................................ 51 7. Data Analysis and Findings .................................................................................................................. 53 7.a. Assumptions of analysis ........................................................................................................... 54 7.b. Data Collection and analysis .................................................................................................... 54 7.c. Statistical Methods Used........................................................................................................... 54 7.d. Decorative Paint Market Segment wise Projection & Calculation .......................................... 55 7.e. Findings..................................................................................................................................... 56
  5. 5. Page 4 7.e.i. Segment wise TIN Consumption ................................................................................ 56 7.e.ii. Validation of the accuracy of the methodology adopted ........................................... 56 8. Limitation of Study ................................................................................................................................ 57 9. Scope of Further Study and Recommendation ................................................................................... 59 10. Appendix ............................................................................................................................................... 61 11. Reference .............................................................................................................................................. 72
  6. 6. Page 5 Introduction and Summery
  7. 7. Page 6 Executive Summary The Tinplate Company of India Limited is a premiere tinplate manufacturer of India. It boasts of a major 47% share in the domestic tinplate market. The end users of tinplates are primarily the can fabricators and fillers of process food and non food materials (and some brand owners having downstream can making business) such as paint, pesticides, aerosols. Tinplate also finds its uses in the battery jacket making segment. The other major product of TCIL is Tin Free Steel which is used to manufacture crowns and screw caps for beverage and ketchup bottles of various types. The focus of this project is: Domestic Paints Sector Along with the macro study of the domestic paints sector and how its growth has been affected by some key economic factors over the last few years, this project has been designed to do a micro analysis of the current demand scenario in each of the segments and the amount of tinplate consumed for packaging different finished goods and SKUs from this industry and its usage trend over the years. This is an exploratory research work, for which secondary data has been used, mainly sourced from CMIE (Centre for Monitoring Indian Economy) Prowess Database. Exclusive industrial data has been provided by the Company in the form of Indian Paint Association Report by Nielsen and market survey report by feedbackconsultancy.com. To append the given data, extensive online research has been carried out. Based on the aforesaid data, value-wise and volume-wise market size of paints- both decorative and industrial paints has been calculated for the period 2012-2013 & 2013-2014 taking 2011-2012 as the base year and Compound Annual Growth Rate (CAGR) of each segment as constant. Finally, tinplate packaging trend in each paint category has been observed since 2011 till 2014 and the total quantity of tinplate consumed in the sector has been ascertained.
  8. 8. Page 7 Introduction to the project and its objectives The precise business model of The Tinplate Company of India Limited is as follows: So, TCIL is essentially a B2B company that derives its revenue indirectly from its end-user segments viz. edible oil and processed food, paint, pesticides, aerosol and battery, and crowns and corks industries; and hence, the parameters that affect the growth of these sectors also immensely impact the business dynamics of TCIL. The objective of this project is to identify the key indicators having positive correlation with the growth of the paint and pesticides/crowns industries and estimate the demand of tinplate used for packaging “as is” in these two sectors, based on which TCIL can define its production and sales & marketing objectives in the short to medium term. Key Objectives: Primary Objectives: P1: To assess the consumption trend of tinplate packaging for various SKUs of paints sector. P1: To assess present cumulative tinplate consumption for packaging in paints industry vis-à-vis overall tinplate production in India. P1: To provide a template for TCIL to estimate and validate tinplate demand in the paint packaging end- user segment. For attainment of above objectives following secondary objectives have to be fulfilled. Secondary Objectives S1: To provide an overall outlook of the paints and coatings industry over the last three years till now (2011-2012 to 2013-2014). S2: To estimate the market size of Indian paints and coatings industry and identify the product segments with high growth potential. S3: To find correlation of paint production with key economic factors, and subsequently identify the indicators of growth. S3: To provide a broad overview of the Top 5 companies of Indian paint industry, their market share and growth trend over the last five years (2009-2010 till 2013-2014). Steel manufacturer (Tata Steel Limited) TCIL Can Fabricators Brand Owners Consumers
  9. 9. Page 8 Company Profile
  10. 10. Page 9 The Tinplate Company of India Limited 3.a. Company Profile: TCIL is today the largest indigenous producer of tin coated and tin free steel sheets in India, enjoying ~ 50% market share and undoubtedly the industry leader for more than 90 years. The company exports about 20-25% of its production directly to end-users (can- makers) and its products are well accepted in the markets of SE Asia, Middle East and some developed countries in Europe. Headquartered in Kolkata, the Company’s Works is located at Jamshedpur, Jharkhand. There are presently 11 offices in India and a distribution network with 16 stocking points. TCIL Works, situated at Golmuri, Jamshedpur has presently two Electrolytic Tinning Lines (ETLs) and Cold Rolling Mills (CRMs). The Company is in the business of manufacturing and supplying reliable, cost-effective, value-added tin mill products. It manufactures various grades of electrolytic tinplates, tin-free steel sheets and Full Hard Cold Rolled Sheets (FHCR) used for metal packaging. In pursuit of its downstream agenda, the company has been bonding with food processors and fillers by way of world class printing and lacquering facilities at the "Solution Centre". The company’s business can be classified into the following  Conversion Arrangement with Tata Steel Ltd. – majority of the revenues of the company are derived through conversion of hot rolled coils, which are sourced from Tata steel Ltd. to tinplate and market such products. The company receives conversion charges as per the arrangement.  Exports and own sales – under this account the company procures hot rolled coils and tin mill black plate oils (raw materials) from other sources for manufacturing tinplate products and is sold in the exports and domestic markets as per the demand. ETP Line View of TCIL CRM Complex Solution Centre
  11. 11. Page 10 Company History: The company was incorporated in 1920 and the site chosen was Golmuri, Jamshedpur. The first steel plate of Tinplate gauge was rolled on 18th Dec 1922 at the Hot Dip Plant (HDP) producing Hot Dip Tinplate, from tin bars supplied by Tata Steel and this continued till 1979 albeit with capacity enhancements. For 50 years, TCIL thus almost single-handedly built up the Indian Tinplate Industry. To keep pace with technological developments, TCIL was the first to set up a combination line capable of producing both Electrolytic Tinplate (ETP) and Tin Free Steel (TFS). This plant, the first of its kind in India, was commissioned in 1978 and commenced production in January 1979. In 1982, Tata Steel bought the shareholding of Burmah Oil, the then major shareholder and took over the management of the company. In 1991-92, TCIL undertook backward integration to setup a Cold Rolling Mill (CRM) for production of TMBP Coils, based on Hot Rolled Coil supplies from Tata Steel, which was also setting up its Hot Strip Mill (HSM) at the same time. The CRM was thus a strategic fit for TCIL with Tata Steel. The Cold Rolling Mill (CRM) was commissioned in 1996-97 but with heavy time and cost over-runs, the company started incurring severe losses. A turnaround strategy was developed focusing on: • Operational Improvements • Financial Restructuring • Hot Dip Plant(HDP) phase out and downsizing First hot-rolled tin sheet- 1922 Annealing Bay - 1972
  12. 12. Page 11 Mission, Vision, Goal During the year under review there were no fatal incidents. The Lost Time Injury Rate reduced to 1.49 as against 2.42 in 2011-2012. The company having its manufacturing facility located at Jamshedpur in the state of Jharkhand today has a capacity of 0.38 million tonnes, about half of which is catered through imports. TCIL started tinplate manufacturing in India in 1922. Today the company commands a significant market share in India. Overall operations increased by around 20% over the previous year which enabled the company to cross the milestone of 0.3 tons for a financial year. Production increased from approximately 256000 tons in FY 2011-2012 to approximately 310000 tons in FY 2012-2013. During the year FY 2013 a new domestic competitor has entered the market and some more are expected. During the FY 2012-2013 the company achieved more than 20% increase in production over the previous year. This was achieved at the two tinning lines also at the two Cold Rolling Mills. Mission •Service customer requirements of green packaging by offering reliable, cost-effective & value added tin mill products. Vision •Be an Industry leader in value creation, servicing packaging needs and creating a greener future. Strategic Goals •Create and enhance value for the stakeholders through Growth and competitiveness. •Reach status of supplier of choice for tin mill products in Asia. •Establish as an exemplar in corporate sustainability. •Create an exciting and safe work place for our employees.
  13. 13. Page 12 3.b. TCIL Financial Performance Comparison ( FY 2008 – FY 2014 ) 3.c. Advantages of using Tin as packaging material Tinplate continues to be the most preferred packaging medium, both for food products like fresh and processed edibles, beverages and non-food applications such as paints, aerosols, battery jackets, chemicals, closures, etc. It is a green packaging medium, 100% bio-degradable and eco-friendly, perfectly suited for an age in which commercial success depends on sound environmental credentials. Tata Tinplate offers a wide variety of world class tinplate for packaging, especially for edibles. 8.08 62.67 101.53 51.15 27.9 49.53 90.69 0 20 40 60 80 100 120 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 PBT (Rs. In Crores) 3.94 34.8 67.15 35.81 16.55 28.23 62.8 0 20 40 60 80 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 PAT (Rs. In Crores) 43.31 115.81 156.26 97.98 93.36 132.83 173.04 0 50 100 150 200 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 EBIDTA (Rs. In Crores) 410.39 670.78 803.02 810.94 646 898.55 1084.42 0 200 400 600 800 1000 1200 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 Revenue (Rs. In Crores) 0 0.5 1 1.5 2 2.5 3 3.5 4 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 Debt to Equity 279.78 404.01 574.76 517.8 503.31 0 100 200 300 400 500 600 700 FY '09 FY '10 FY '11 FY '12 FY '13 Capital employed (Rs. in Crorers) Source: TCIL Annual Reports
  14. 14. Page 13 Tinplate is globally preferred as the best packaging solution. Here are just a few reasons why.  Long shelf life  Ultra-Violet ray and bacterial protection  Aroma and flavour retention  Pilfer and tamper proof  Excellent printability  Eco-friendliness Tinplate Classifications 3.d. Products of TCIL Types of Tinplate Primary Grade Tinplate / Prime Secondary Grade Tinplate / Non-Prime Products of TCIL Electrolytic Tinplate (ETP) Products Single Reduced Tinplates Open Top Sanitary Cans (OTSC) Double Reduced Tinplate Sheets Tin Free Steel (TFS) Cold Rolling Mill (CRM) Products Full Hard Coils HR Pickled Coils Temper Rolled/ Double Reduced (DR) Coils Source: TCIL Official Website www.tatatinplate.com
  15. 15. Page 14 Category wise sales & Segment wise market share of TCIL products  TCIL Product Offerings  Single Reduced Tinplates (SR)  Double Reduced Tinplate Sheets (DR)  Open top Sanitary Cans (OTSC)  Tin Free Steel (TFS) 3.e. Production Facility  Pickling Process To remove the scales adhering to the hot rolled coils Tinplate Company uses its Push-Pull shallow bath Hydrochloric Acid Pickling Line. 38% 48% 11% 3% TCIL Product Category Segmentation (%) OC NOC OTSC TFS 22% 19% 6% 38% 9% 6% End Uses (%) Processed foods Paint & Pesticides Battery, Aerosols,Lugs Edible Oil Crown Others Pickling Line Source: TCIL Source: TCIL Official Website www.tatatinplate.com
  16. 16. Page 15 Quality check  Incoming coils are checked for its shape and steel composition.  Acid baths are checked for free acid levels  Rinse water is checked for chlorides  Pickled coils are checked for substrate related defects such as rolled in scale, sliver and process related pickling quality and surface finish.  6 Hi Cold Rolling Mill Tinplate, as a packaging material, continues to be most preferred, both in packaging food products like processed food, vanaspati, ghee, etc., and also where criticality of application is important, as in the case of battery jackets and pesticide cans, to name a few select areas. Quality checks  Shape of CR strip  Gauge tolerance or conformity  Surface finish  Surface defects. Full hard CR material from here is routed to Coil Preparation Line for trimming or directly packed and sent to the customer  Full hard material Full hard steel is made without the usual subsequent annealing step. The resulting product has a particularly high stability. Due to the elimination of the grain recrystallization process associated with annealing, the material retains high internal stresses.  Electrolytic Cleaning During the process of cold rolling cooling oil is used to keep the temperature of the roll and the strip within limits. This cooling oil mixed with water in an emulsion has to be removed for further processing. This is achieved in the Electrolytic Cleaning Line. Front View of 6 HI Mill Full Hard Material
  17. 17. Page 16 Quality checks  Plate out on strip to check for the cleaning efficiency.  Annealing Annealing is done to relieve the stresses that are built into it during the process of cold rolling which makes the steel strip hard and brittle. Annealing is done using the batch annealing process. Quality checks  In the base the temperature and cycle of heating, soaking and cooling.  Annealed hardness of the coil at the Temper Mill entry.  Temper Mill The mill is a four high two-stand tandem mill with a facility to give a further reduction of up to 30%. After the process of annealing the strip becomes soft. To put it to further use the surface has to be given the proper finish and hardness. Quality checks  Shape of coil with regard to bowness in the strip.  Thickness.  Surface finish and defects.  Temper (hardness) for SR/Proof stress for DR  Coil Preparation Line (CPL) Full hard and / or tempered coil before being tin plated has to be trimmed to the required width as per the customer's order. For this purpose the coil is passed thro' the CPL with edge trimming facility. The coil is "paid off" and passed thro' the trimmer to cut off both sides to the ordered width of the end product and then rewound. Quality checks  Shape of coil - edge waviness and bow. Annealing Furnace Area Temper Mill Full View Coil Preparation Line
  18. 18. Page 17  Edge burr on the strip  Width tolerance (0 to +2 mm)  Electrolytic Tinplating Line The unique properties of tin provide a coating on the steel that protects the contents, while providing the steel with an attractive appearance, corrosion resistance and ease in bonding, welding and painting. Tin is applied to both sides of the black plate coil through an electrolytic process. The thickness of the tin coating (called coating weight) is dependent upon the end-use application. Cold Rolled Steel Coil Uncoiling Alkaline Cleaning Scrubber Rinsing Pickling Rinsing Chrome Plating Electro-Plating with TIN Drying Brightening by Reflow Unit Passivation Oiling Scroll Recoiler Shearing Classifier Packing Despatch Cold rolled Steel Coil Uncoiling Alkaline Cleaning Rinsing Pickling Rinsing Electroplating With TIN Drying Brightening by Reflow unit Passivation Oiling Shearing Classifier Packing Despatch ETL #1 Process Flow Diagram ETL #2 Process Flow Diagram
  19. 19. Page 18 Process Flow Diagram TMBP Coils Uncoiling Alkaline Cleaning Rinsing Pickling Rinsing Electro-plating with Tin Drying Brightening by Reflow Unit Passivation Oiling Shearing Classifier Packaging in Sheets Despatch Hot Rolled Coils Pickling Line 6 Hi CVC Cold Rolling Mill Degreasing Line Batch Annealing Furnace 4 Hi Temper / DCR Mill Coil Preperation Line TMBP Coils Black Plate
  20. 20. Page 19 CRM Process Flow Diagram. Coil Packaging Operation Sequence Sheet Packaging Bare Coil Inspection Coil Weighment EDGE Protection Stretch Film Wrapping Side Protection Surface Protection Metal Jackating EDGE Sealing EDGE Protection Circum strapping Eye Strapping Labeling & Inspection Despatch
  21. 21. Page 20 TCIL International Presence Domestic Consumption of Tinplate (%) Regulatory environment focus helped to ensure continuation of incremental customs duty on imports (5% for Prime revised to 7.5% in March 2012, 10% for Non-Prime) and port restrictions for import of Secondary. To some extent this has helped to sustain and improve prime consumption at over 55% (in fig below). Tinplate Product Market Tinplate Market Competition  The global Tinplate Market is 14 million tons. 8 players in this market control 90% of total capacity.  TCIL Controls 3% of the capacity.  Tinplate demand in India grew at a CAGR of 4-5% (FY 2010-2013).  Present apparent consumption of tinplate in India is about 538,000 MTPA. Global Tinplate Market •14,000,000 MT Indian Consumption •538,000 MT TCIL Production Capability •380,000 MT SAIL Production Capability •150,000 MT New Player in The market •M/s Vallabh Tinplate started production with capacity 60,000 MT Source: TCIL Source: TCIL
  22. 22. Page 21  TCIL is the largest player in Indian Tinplate Industry with capacity of 380000 MTPA. This is about 47% of the entire tinplate market in India.  Import of Non-Prime tinplates and their usage in food packaging dampens the demand of Prime tinplate. Strategic challenges of TCIL  Growth with agility  Lead the value chain with Consumer at the center  Institutionalize Processes for mitigating with speed, recurrent volatility in the eco system  Leverage Tata Steel-Corus leadership in technology and R&D  Institutionalize culture of breakthrough improvement across the organization.  Be exemplar in corporate sustainability practices. Consumers: The Value Chain of the Business needs to be addressed in right earnest. 47% 5% 2% 46% Indian Tinplate Market Share TCIL SAIL and GPT Other Domestic Players Imported Product range and Cost Effective Sourcing of TMBP and Tin Competitive tinplate offers and multiple sourcing options and need for cost competitiveness Choice of Substitutes Need for cost effective solutions Dissatisfied Consumers in India Discerning Requirements TATA STEEL TCIL Can Fabricators Fillers Retailer / Consumers Source: TCIL Source: TCIL Source: TCIL
  23. 23. Page 22 TCIL Internal Analysis (SWOT) Strength •Deep Knowledge of tinplate business &value chain •Integrity / proximity to TSL for HRC supply •Product variety •Light weight Capabilities •Uninterepted power and water supply •Product Cost competitiveness (TSL & TCIL) Weakness •Diluting skills •Low in-house R&D •Change management agility Opportunities •Growing Indian food processing industry •Low per capita tinplate consumption •Growing market in India's vicinity •Partnership with key suppliers Threat •Regulatory mechanism, continuous use of non-prime. •Growing use of substitute Packaging •Probable head hunting of knowledge workers •Research on eco friendly plastic Source: TCIL
  24. 24. Page 23 Selection of Project and Relevance of the Study From the performance and basic analysis it can be clearly stated that in modern market scenario tinplate, though being a better material for packaging is facing significant competition and is being threatened by substitute packaging material at all segment. In that context in this project paint market where tinplate is widely used as packaging material is taken under consideration to analyze. The Indian packaging industry is poised for growth. The rapidly growing GDP in India and the changed lifestyle in urban India are going to bring a boom in the packaging industry as a whole. Piggybacking the gross prosperity of the packaging industry, tinplate too is making it big as an environment-friendly, versatile packaging material, though amidst numerous challenges and adversities. Domestic tinplate industry is faced by challenges mainly from two fronts. The first threat is from the manufacturers of tinplate from all around the world. Easy access to technology makes it an industry where the threat for entry is very easy and therefore competition. Moreover, the lowering of tariffs on imports has opened up the competition in the Indian tinplate industry to the world steel majors, such as Nippon Steel Japan, US Steel, etc., who have the economies of scale. This has posed a real challenge to the Indian tinplate manufacturers who are small-scale producers when compared with the steel giants. The second threat for the tinplate manufacturers is packaging from an alternative packaging medium such as tetra packs, polyethylene, etc. Tinplate or Electrolytic Tinplate (ETP) as a packaging material finds its use in many end-user segments of which paints and coatings enjoy the second largest market share just after edible oil. The Beverage segment is mostly catered to by the Tin Free Sheets (TFS) category. However, if we look at the past few years’ usage pattern of tinplate for packaging paint industry SKUs, a clearly declining trend can be observed. Baring three categories, namely solvent based enamels (contained high percentage of Volatile Organic Compounds or VOCs), primers and wood coatings in the decorative paints segment, tinplate has ceased to dominate as the preferred packaging material for majority of brand owners. It is being continuously being substituted by materials such as HDPE (High Density Polyethylene). For an organization like TCIL, which derives its revenues from the growth of its end industry segments, this continuous contraction of market can prove to be quite alarming. From this point of view, an analysis of the current demand scenario of paints industry in terms of value and volume and how much tin is consumed for packaging in this sector is quite relevant.
  25. 25. Page 24 This study can be used as a basic template to:  Project future demand of tinplate in paints industry  Analyse demand : supply scenario in India taking into consideration various industry-relevant parameters  Evaluate wherein TCIL stands today in terms of volume production for this particular end-user segment  Determine its further scope of growth in terms of product rationalization, further value addition, and revenue generation
  26. 26. Page 25 Research Methodology
  27. 27. Page 26 5.a. Research methodology Overview The goal of the project was to find out the Tinplate demand in India in the paint industry. And in addition to validate the same with the actual industry data. To do the same the packaging scenario in the paint industry for three years was taken under consideration and projection of future trend. Tin can (pcs) required for each SKU is calculated for FY 2012 to FY 2014 based on the data provided as of FY 2011 from the survey of feedback consulting. Trend analysis is done assuming the CAGR of the segment is same throughout multiple years. The volume of TIN (in MT) is calculated for each SKU and each segment. The sum up value of the different segment should match as possible with the actual industry data which is available directly. The volume of the decorative paints is obtained from the IPA Nielsen Market Survey Report for FY 2007-2008 & FY 2011-2012. Assuming CAGR and the market share of each type of decorative paint constant, the Volume (in MT) is calculated for FY2012-2013 and FY2013-2014. The volume in MT is converted to volume in litre. The amount of TIN required to pack unit volume of paint is assumed constant as in feedbackconsulting report. From there the total TIN consumption for paint industry is calculated. 5.b. Type of Research: This is an exploratory research project which aims at finding the growth inducing parameters of Indian paints industry, the approximate market size of decorative paints and industrial paints (value-wise and volume-wise) in 2012-2013 and 2013-2014, and tinplate consumption in the sector for the same period. The study can be broadly divided into two parts: I. Analysis of the Domestic Paints Market II. Consumption Trend of Tinplate in Paints Packaging from 2010-2011 till 2013-2014 A research design is the framework or plan for a study used as a guide in collecting and analysing data. There are three basic types of research design: exploratory, descriptive, and causal. Exploratory Research Design: Design in which the major emphasis is on gaining ideas and insights. Descriptive Research Design: Research design in which the major emphasis is on determining the frequency with which something occurs or the extent to which two variables co-vary. Causative Research Design: Research design in which the major emphasis is on determining cause-and- effect relationships.
  28. 28. Page 27 Industry Study
  29. 29. Page 28 The Paint Industry 6.a. Paint Market Overview: India’s strong economic growth has propelled the paint industry to double-digit growth over the past few years and has made it Asia Pacific’s fastest growing paint market. Despite fast growth, India’s per capita paint consumption is still abysmally low at ~2kg/year. Due to increased Government funding for infrastructure, demand for paints both in industrial and decorative segment is set to rise, thereby rendering Indian paint industry to be poised for further growth. Nearly ~65% of the paint market is organized. The organized market is highly concentrated and a classic example of an oligopoly, where entry barriers are high and the ‘top-5’ players capture most of the market, while the unorganized market is highly fragmented with over 2,000 players. The paint industry is expected to grow at 12-13% annually over the next five years from Rs 280 bn in FY13 to around Rs 500 bn by FY18. FY13 was a challenging year for the industry as a whole due to subdued demand across key sectors and rising inflation. The paints sector is raw material intensive, with over 300 raw materials (50% petro-based derivatives) involved in the manufacturing process. Since most of the raw materials are petroleum based, the industry benefits from softening crude prices Organized 65% Unorganized 35% Indian Paint Industry
  30. 30. Page 29 6.b. Paint Market Segmentation 1. 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. 2. 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. Indian Paint Industry Industrial Segment (30%) Protective & GI (33.31 %) Auto OEM Paints (25.03 %) Auto Refinish Paints (14.62%) Powder Coating (10.42%) Coil Coating (6.59%) Can Coating (2.93%) Marine Coating (2.48%) Others (4.63%) Decorative Segment (70%) Enamels (21.77 %) Primer, Thihnner (8.84 %) Exterior Emulsion (20.94 %) Distemper (9.11 %) Interior Emulsion (16.43 %) Putty (Acrylic) (16.79 %) Cement Paint ( 2.36 %) Wood Coating (3.76 %) Source: IPA Nielsen Market Survey
  31. 31. Page 30 21.77 8.84 20.94 9.11 16.43 16.79 2.36 3.76 Domestic Paint Market Category Share (%) (Projected 2014) Enamels Primer, Thinner Exterior emulsion Distemper Interior Emulsion Putty ( Acrylic) Cement Paint Wood Coatings Source: IPA Nielsen Market Survey and Projection 33.31 25.03 14.62 10.42 6.59 2.93 2.48 4.63 Industrial Paint Market Category Share (%) (Projected 2014) Protective and GI (Combine) Auto OEM Paints Auto Refinish Paints Powder Coating Coil Coating Can Coatings Marine Coatings Others Source: IPA Nielsen Market Survey and Projection
  32. 32. Page 31 Key Points about Paint Industry Supply Supply exceeds demand in both the decorative as well as the industrial paints segments. Industry is fragmented. Demand Demand for decorative paints depends on the housing sector and good monsoons. Industrial paint demand is linked to user industries like auto, engineering and consumer durables. Barriers to entry Brand, distribution network, working capital efficiency and technology play a crucial role. Bargaining power of suppliers Price increase constrained with the presence of the unorganized sector for the decorative segment. Sophisticated buyers of industrial paints also limit the bargaining power of suppliers. It is therefore that margins are better in the decorative segment. Bargaining power of customers Moderate due to availability of wide choice. Competition In both categories, companies in the organized sector focus on brand building. Higher pricing through product differentiation is also followed as a competitive strategy. 6.c. Performance in Financial Year '13  FY13 was a mixed bag for the paint companies. While all the 3 players viz. Asian Paints, Kansai Nerolac and Berger Paints reported a strong growth in sales, operating margins came under severe pressure due to raw material price inflation. Top-line growth was boosted by strong demand from the rural markets. Nonetheless, the demand environment in the industrial segment continues to remain challenging.  Performance on the margins was impacted by the rising prices of crude oil and titanium dioxide which increased the overall expenditure, thereby impacting profitability growth. However, companies are undertaking a gradual and calibrated price increase in order to shield margins.  A good monsoon this year is expected to boost demand in the rural areas. A good harvest and festival season demand can boost volumes in the second half of FY14.  All the key players are in an expansion phase. As per estimates, paint capacities are expected to go up by 50-70% in the coming 3 to 5 years.
  33. 33. Page 32 6.d. Future Paint Market projection (Value Wise) Future Market projection ( Segment wise) Decorative Paint Category Projection of 2013-2014 (based on 2011-2012) Estimation Year 2013-2014 Total Market for decorative Paints (INR Crore) 28960.32 Category Value wise market Category Share (%) Enamels 6303.45 21.77 Primer, Thinner 2559.29 8.84 Exterior emulsion 6064.50 20.94 Distemper 2637.12 9.11 Interior Emulsion 4758.88 16.43 Putty ( Acrylic) 4863.71 16.79 Cement Paint 684.05 2.36 Wood Coatings 1089.33 3.76 Total 28960.32 100.00 26040 28900 32485 37020 42650 49545 0 10000 20000 30000 40000 50000 60000 FY 2012 FY 2013 FY2014 FY2015 FY2016 FY2017 Value (Rs in Crores) 18490 20710 23515 27040 31435 36860 7550 8190 8970 9980 11215 12685 0 10000 20000 30000 40000 50000 60000 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Future Market projection ( Segment wise) Rs in Crores Decorative Paint (Rs in Crores) Industrial Paint (Rs in Crores) Source: IPA Nielsen Market Survey (and Projection) Source: IPA Nielsen Market Survey (and Projection)
  34. 34. Page 33 Product Segment with scope of growth(Decorative) Category Value wise market (2013- 2014) CAGR (Assuming Constant) Enamels 6303.45 10.1 Primer, Thinner 2559.29 8.6 Exterior emulsion 6064.50 27 Distemper 2637.12 11.4 Interior Emulsion 4758.88 23.9 Putty ( Acrylic) 4863.71 50.1 Cement Paint 684.05 8.6 Wood Coatings 1089.33 17.8 Industrial Paint Category Projection of 2013-2014 (based on 2011-2012) Estimation Year 2013-2014 Total Market for Industrial Paints (INR Crore) 9436.44 Category Value wise market Category Share (%) Protective and GI (Combine) 3142.82 33.31 Auto OEM Paints 2361.61 25.03 Auto Refinish Paints 1379.84 14.62 Powder Coating 982.95 10.42 Coil Coating 621.54 6.59 Can Coatings 276.92 2.93 Marine Coatings 233.85 2.48 Others 436.92 4.63 Total 9436.44 100.00 0 0.1 0.2 0.3 0.4 0.5 0.6 Decorative Paint Market Category (Volume wise) 2011-2012 2012-2013 2013-2014 Source: IPA Nielsen Market Survey High Opportunity CAGR- Above 15% Moderate Opportunity CAGR- Between 10-15% Low Opportunity CAGR- Low 10%
  35. 35. Page 34 Product Segment with scope of growth (Industrial) Category Value wise market (2013- 2014) CAGR (Assuming Constant) Protective and GI (Combine) 3142.82 33.31 Auto OEM Paints 2361.61 25.03 Auto Refinish Paints 1379.84 14.62 Powder Coating 982.95 10.42 Coil Coating 621.54 6.59 Can Coatings 276.92 2.93 Marine Coatings 233.85 2.48 Others 436.92 4.63 Total 9436.44 100.00 Paint market Volume 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 Industrial Paint Market Category (Volume wise MT) 2011-2012 2012-2013 2013-2014 2.48 3.11 3.29 3.48 1.86 2.4 2.56 2.73 0.62 0.71 0.73 0.75 2007-2008 2011-2012 2012-2013 2013-2014 Paint Market Volume ( Million MT) Overall Paint Market Decorative Paint Market Industrial Paint Market Source: IPA Nielsen Market Survey (and Projection) Source: IPA Nielsen Market Survey (and Projection) High Opportunity CAGR- Above 10% & market size above INR 1500 Cr Moderate Opportunity CAGR- Above 10% & market size between INR 750 to 1500 Cr Low Opportunity CAGR- Low 10% & market size below INR 500 Cr
  36. 36. Page 35 6.e. Economic factor affecting Paint market and Correlation: There are many factor (Economic or non- economic) which affect the paint consumption. The main factors are 1. Crude oil price ( MCX , INR/Barrel ) 2. Automobile production 3. GDP 4. Rainfall / Monsoon Picture 5. Index of Industrial Production 6. Construction Sector The Correlation coefficient of these factors with paint production is calculated as below Factor Correlation Coefficient (r) Calculation Frequency Crude oil price 0.3627 Monthly Automobile production 0.8597 Quarterly GDP 0.95001 Yearly Rainfall / Monsoon Picture 0.1973 Monthly Index of Industrial Production 0.40206 Monthly Construction Sector 0.9413 Yearly The Correlation can be shown by following figures ( Data Tables: Appendix) 1. Monthly Analysis : Pearson Coefficient of Correlation (R) = 0.36 y = 0.089x -837.9R² = 0.131 R= 0.36 2.00 3.00 4.00 5.00 6.00 7.00 8.00 0.05 0.06 0.06 0.07 0.07 0.08 CRUDE OIL PRICE (INR PER BARREL) Thousands PAINT PRODUCTION (TONNES) Millions Chart to Show Correlation between Paint Production and Crude Oil Price Source: IPA Nielsen Market Survey (and Projection)
  37. 37. Page 36 Coefficient of Determination (R²) = 0.131 Therefore, 13% of variation in Paint Production (in Tonnes) is accounted for by change in Crude Oil Prices (in INR per barrel). Probability of Significance or p-value= 0.004342621 Pearson Coefficient of Correlation (R) = 0.401 Coefficient of Determination (R²) = 0.161 Therefore, 16% of variation in Paint Production (in Tonnes) is accounted for by change in IIP (Base Year 2004-2005). Probability of Significance or p-value= 0.001426288 Pearson Coefficient of Correlation (R) = 0.506 Coefficient of Determination (R²) = 0.257 y = 0.001x + 104.1R² = 0.161 R= 0.401 135 145 155 165 175 185 195 205 0.05 0.06 0.06 0.07 0.07 0.08 IIP PAINT PRODUCTION (TONNES) Millions Chart to Show Correlation Between and Paint Production and Index of Industrial Production : Base Year 2004-05 y = 6.584x -46436R² = 0.257 R= 0.506 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00 400,000.00 450,000.00 500,000.00 550,000.00 0.05 0.06 0.06 0.07 0.07 0.08 OVERALL AUTOMOBILE PRODUCTION PAINT PRODUCTION (TONNES) Millions Chart to Show Correlation between Paint Production and Components of Motor Vehicles, Trailers & Semi-trailers Index
  38. 38. Page 37 Therefore, 25.7% of variation in Paint Production (in Tonnes) is accounted for by change in IIP (Base Year 2004-2005). Probability of Significance or p-value= 0.000033773 Pearson Coefficient of Correlation (R) = 0.170 Coefficient of Determination (R²) = 0.029 Therefore, 2.9% of variation in Paint Production (in Tonnes) is accounted for by change in IIP (Base Year 2004-2005). Probability of Significance or p-value= 0.289720586 2. Quarterly Analysis : Pearson Coefficient of Correlation (R) = 0.170 Coefficient of Determination (R²) = 0.029 R² = 0.739 R= 0.859 1000000 2000000 3000000 4000000 5000000 6000000 7000000 100,000.00 120,000.00 140,000.00 160,000.00 180,000.00 200,000.00 220,000.00 AUTOMOBILE PRODUCTION PAINT PRODUCTION OF ALL KINDS (TONNES) Chart to Show Correlation between Paint Production and Automobile Production R² = 0.029 R= 0.170 0 50 100 150 200 250 300 350 400 50,000.00 55,000.00 60,000.00 65,000.00 70,000.00 75,000.00 SUB-DIVISION WISE PROGRESS OF RAINFALL PAINT PRODUCTION OF ALL KINDS (TONNES) Chart to Show Correlation between Paint Production and Rainfall : Actual
  39. 39. Page 38 Therefore, 2.9% of variation in Paint Production (in Tonnes) is accounted for by change in IIP (Base Year 2004-2005). Probability of Significance or p-value=0.00000000497001 1. Yearly Analysis: Pearson Coefficient of Correlation (R) = 0.949 Coefficient of Determination (R²) = 0.902 Therefore, 90.2% of variation in Paint Production (in Tonnes) is accounted for by change in GDP at current prices, base year 2004-05 at factor cost (in INR Millions). Probability of Significance or p-value= 0.0000724 Pearson Coefficient of Correlation (R) = 0.941 Coefficient of Determination (R²) = 0.886 y = 174.3x -6E+07R² = 0.902 R=O.949 20,000,000.00 30,000,000.00 40,000,000.00 50,000,000.00 60,000,000.00 70,000,000.00 80,000,000.00 90,000,000.00 100,000,000.00 500,000.00 550,000.00 600,000.00 650,000.00 700,000.00 750,000.00 800,000.00 850,000.00 GDP AT CURRENT PRICES PAINT PRODUCTION (TONNES) Chart to Show Correlation between Paint Production and GDP at Current Prices : Base Year 2004-05 At factor cost (Rs. Million) y = 41.12x -1E+07R² = 0.886 R=0.941 5,000,000.00 10,000,000.00 15,000,000.00 20,000,000.00 25,000,000.00 450,000.00 500,000.00 550,000.00 600,000.00 650,000.00 700,000.00 750,000.00 800,000.00 850,000.00 VALUE OF OUTPUT OF CONSTRUCTION SECTOR PAINT PRODUCTION (TONNES) Chart to Show Correlation between Paint Production and Value of Output of Construction Sector at Current Prices : Base Year 2004-05 (Rs. Million)
  40. 40. Page 39 Therefore, 88.6% of variation in Paint Production (in Tonnes) is accounted for by change in Value of Output of Construction Sector at current prices, base year 2004-05 at factor cost (in INR Millions). Probability of Significance or p-value= 0.000133634 The value of correlation coefficient indicates the fact that how much the factor affect the paint production. In this tabulation all positive coefficient signifies that all these factor affect in increasing the paint production, i.e. all are leading factors. Very high value of correlation coefficient of automobile production, Index of Industrial Production, Construction Sector and GDP with paint production indicates that it highly affect the paint production. Low value of correlation coefficient crude oil price and monsoon picture affects the paint production positively but the effect is not to higher degree. 6.f. Key Players in Paint Industry Here is a list of Top 10 paint companies in India; these are the best companies providing coating and paint solutions for home, offices and industries.  Asian Paints Asian Paints is a leading industrial paint and decorative paint manufacturing company based in Mumbai and has 24 paint manufacturing plants operating in 17 countries. The Decorative paint products include exterior wall finishes, interior wall & wood finishes and enamels  Kansai Nerolac Paints Ltd Among the top paint companies in India, Kansai Nerolac Paints Ltd is a subsidiary of Kansai Nerolac paints, Japan which was established in the year 1920. Nerolac Paints manufactures a wide range of paints for decorative and industrial use and is the second largest coating company in India.  Berger Paints India Limited Berger Paints is the fastest growing paint company headquartered in Kolkata. It is the second best paint company in India which has a global presence. Berger is the only supplier of protective coatings to nuclear power plants and has completed many prestigious projects which includes Cognizant, Chennai; Hotel Le Meridien, Delhi; Teen Kanya, Kolkata; Akshardham Temple, Delhi and more.  Shalimar paints: Incorporated in 1902, Shalimar paints is having three manufacturing units and more than 54 branches and depots across the country. The Company is engaged in architectural, decorative and industrial segments.
  41. 41. Page 40 Company’s landmark projects includes Rashtrapati Bhavan Delhi, Saltlake stadium Kolkata, Vidyasagar Setu Kolkata, Malankara Orthodox Church, Kerala etc.  Dulux Paints Produced by AkzoNobel India, Dulux is one of the world’ top paint companies manufacturing wide range of products for home, house painting, wall painting etc.  Jenson & Nicholson (I) Ltd Second oldest and among the top paint companies in India J&N was launched in India in 1973. Jenson and Nicholson has successfully completed many renowned projects including Birla Mandir, Birla Museum Bhopal, Common Wealth Games Village Delhi, St. Pauls Seminary Shillong and many more.  Snowcem Paints Established in the year 1959, Snowcem Paints is a leading manufacturer of cement paints, textured paints, primers, liquid paints, surface preparation products and construction admixture.  British paints Internationally recognized brand British Paints stepped in India in 1947. British Paints a SBU of Berger Paints India Ltd. is based in New Delhi. Their varied product range includes decorative paints, industrial coating, water proofing and wall putty.  Sheenlac Founded by Mr. John Peter in 1962 Sheenlac Paints has diversified range of products which includes wood finishes, auto finishes, industrial finishes and decorative finishes.  Nippon Paints A leading player in the paint and coating industry Nippon has more than 100 years of experience in paint industry. Its innovative and eco-friendly product range includes decorative paints, Marine coatings, Industrial coatings, automotive coatings and fine chemicals. For This project the top 5 market players in the paint industry in India is taken under consideration. These are: Asian Paints, Berger Paints, Kansai Nerolac, Shalimar Paints, Dulux Paints. These companies hold approximately 90% of the organized paint industry sector in India.
  42. 42. Page 41 Asian Paints Asian Paints, India’s largest and Asia’s third largest decorative paint company boasts of a dominant market share of more than 45% in the domestic organized sector. The company operates in 20 countries and has 28 manufacturing facilities all over the world servicing consumers in over 65 countries. It is one of the fastest growing FMCG companies with a sales turnover of INR 10,418.78 Crores. Despite growing competition from domestic and major foreign paint companies, Asian Paints has managed to maintain its market share, which is further expected to grow in the years to come backed by higher sales growth and changing attitude of new-age Indian consumers towards commodities such as decorative paints. Products and Services: Interior and exterior paints, wood and metal finishes, waterproofing, home solutions. Major Brands:  Ace & Apex  Apcolite  Apex  Apex Ultima  Asian Paints  Colour Next  Premium Gloss Enamel  Royale  Royale Play  Touchwood  Tractor Emulsion  Utsav In Headlines Recently Because: Signed an agreement with shareholders of Kadisco Chemical Industry PLC., Ethiopia, to acquire either directly or through its subsidiaries 51 per cent of its share capital as a strategic move to expand global footprint. Type of Company: Public Incorporated in: 1942 Headquarters: Mumbai Traded as: BSE: 500820 NSE: ASIANPAINT Key People: KBS Anand (MD & CEO) Total Installed Capacity: ~ 0.89 Million MTPA Financials at a Glance Operating Income: Rs 10,418.80 Cr. Operating Profit: Rs. 1153.7 Cr.
  43. 43. Page 42 Berger Paints Berger Paints India is the second largest decorative paint company in India. The company has an overall market share of ~17% in India. The company’s retain business is further classified into retail and pro-links. In the latter, the company deals directly with major projects both in public and private sector. It has seven manufacturing facilities spread across India and more than 82 depots besides four overseas manufacturing facilities. Berger has the second highest distribution network spread across the country. Products and Services: Interior and exterior wall coatings, metal and wood paints, protective coatings, undercoats, construction chemicals. Major Brands:  Berger Silk  Lewis Berger Design Stories by Sussanne Roshan  Easy Clean  WeatherCoat  Breathe Easy  Rangoli  Luxol  Jadoo  Berger Butterfly GP Enamel  Bison Acrylic Emulsion  Walmasta  Tartaruga  Woodkeeper In Headlines Recently Because: Berger is presently focussing towards premium emulsion paints category and has roped in the best of celebrities of the country to promote its brand in this category. Type of Company: Public Incorporated in: 1923 Headquarters: Kolkata Traded as: BSE: 509480 NSE: BERGEPAINT Key People: Abhijit Roy (MD) Total Installed Capacity: ~0.43 Million MTPA Financials at a Glance Operating Income: Rs 3,372.72 Cr. Operating Profit: Rs 172.51 Cr.
  44. 44. Page 43 Kansai Nerolac Kansai Nerolac Paints, formerly known as Goodlass Nerolac became a wholly-owned subsidiary of Kansai Paint Company (Japan) after it took over the entire stake of the company in 1999 and changed its name in 2006. The company has presence in both decorative and industrial paints segment which contributes equally to its revenues. In India, it is the third largest player in decorative segment and largest player in Industrial paints segment with a cumulative market share of around 15%. It enjoys, however, a dominant share in the domestic auto segment. Products and Services: Interior and exterior wall coatings, metal and wood paints, and ancillaries. Major Brands:  Impressions  Impressions Eco-Clean  Impressions- Disney  Beauty- Gold & Silver  Lotus Touch  Excel Total  Suraksha  Wonderwood In Headlines Recently Because: Kansai Nerolac has received an overwhelming response for its recent initiative ‘Paint the Change’ from the consumers across India. The group had undertaken its first activity of painting a one km long stretch outside the Delhi University wall in February 2013, thereby, encouraging the donation of unused paint that would touch the lives of millions by spreading happiness and cheer. Type of Company: Public Incorporated in: 1920 Headquarters: Mumbai Traded as: BSE: 500165 NSE: KANSAINER Key People: H.M. Bharuka (MD) Total Installed Capacity: ~0.03 Million MTPA Financials at a Glance Operating Income: Rs 3,136.10 Cr. Operating Profit: Rs 240.66 Cr.
  45. 45. Page 44 AkzoNobel (Dulux) AkzoNobel India known for its premium segment product Dulux has a market share of ~11%. Company’s business can be broadly divided into decorative paints and refinish auto paints where later contributes ~15% to its revenues. Erstwhile ICI, the company’s name was changed to Akzo Nobel in FY2010 after it was acquired by the largest paint company of the world in 2008. Products and Services: Basic and industrial chemicals, decorative paints, industrial (re)finishing products, coatings. Major Brands:  Dulux Velvet Touch ‘Pearl Glo’  Dulux Velvet Touch ‘Trends’  Dulux Guardian  Dulux 3-in-1 StayClean  Dulux Super Smooth  Super Smooth ‘Colour Bright’  Magik  Dulux WeatherShield  WeatherShield Ultra Clean  Dulux TileShield  Dulux Promise  Dulux Lustre Finish  Dulux Satin Finish  Dulux Supergloss 5-in-1  Dulux Gloss In Headlines Recently Because: AkzoNobel opened a new production facility in Thane, Maharashtra, to manufacture coatings for the metal packaging and flexible packaging industries in July 2014. Built at an investment of Euro 1.8 million, this production facility, called Project ‘Taj’, has a capacity of 5000 tonnes a year and is set to produce a broad range of products including specialised coatings for food and beer cans, internal and external coatings for caps and closures, and external coatings for beverage cans. Type of Company: Public Incorporated in: 1994 Headquarters: Amsterdam, Netherlands Traded as: Euronext: AKZA OTCQX: AKZOY Key People: Ton Büchner (CEO) Total Installed Capacity: ~0.16 Million MTPA Financials at a Glance Operating Income: Rs 2,371.71 Cr. Operating Profit: Rs 198.58 Cr.
  46. 46. Page 45 Shalimar Paints Shalimar Paints is one of the oldest and leading paints manufacturing companies of India. Shalimar has three manufacturing units and more than 54 branches and depots all across the country. The company has a wide product range in Decorative/Architectural and Industrial segments. The Architectural Coatings cover both Interior and Exterior segments. The Company also has tinting systems under the brand name "Color Space" where the company offers more than 9000 shades across all product lines to its customers. Products and Services: Interior and exterior emulsions, distempers, enamels, metal packaging coating solutions, and marine paints. Major Brands:  Husain Premium Acrylic Emulsion  Superlac Acrylic Emulsion  No.1 Silk Emulsion  Xtra Maxima  Shaktiman Exterior Emulsion  Superlac Enamels  Mela Enamel  Tuffkote  Cankote In Headlines Recently Because: Shalimar Paints recently declared a suspension of work at its factory in Howrah, a move which has affected around 350 workers. However, talks are on between the company’s management and the State Government regarding withdrawal of suspension as soon as possible. The company, however, is in the midst of setting up a new plant in Chennai with an installed capacity of 18,000 tonnes per annum. Type of Company: Public Incorporated in: 1902 Headquarters: Mumbai Traded as: BSE: 509874 Key People: Sameer Nagpal (MD &CEO) Total Installed Capacity: ~0.058 Million MTPA Financials at a Glance Operating Income: Rs 479.01 Cr. Profit: Rs 26.27 Cr.
  47. 47. Page 46 6.f.i. Market Share 48.55 15.72 14.61 0.00 11.05 Market Share 2013-2014 Asian Paints Berger Paints Kansai Nerolac Shalimar Paints Dulux Paints 0.00 10.00 20.00 30.00 40.00 50.00 60.00 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Market Share Trend 5 Years Asian Paints Berger Paints Kansai Nerolac Shalimar Paints Dulux Paints Source: Official websites of Paint Companies Data table: Appendix 1.v
  48. 48. Page 47 6.f.ii. Paint Manufacturing Facilities of Top Companies in India 6.f.iii. Comparative analysis of the top 5 players: For This project the top 5 market players in the paint industry in India is taken under consideration. These are: Asian Paints, Berger Paints, Kansai Nerolac, Shalimar Paints, Dulux Paints. Source: Official Websites of Paint Companies Data Table: appendix 1.iv 9600 MTPA 78000 MTPA 32.13 MTPA 158.2 MTPA 15000 MTPA 30000 MTPA 40000 MTPA 15000 MTPA 47.6 MTPA 80000 MTPA 78000 MTPA 14204 MTPA 15000 MTPA 226 MTPA 20400 MTPA 15000 MTPA 300 MTPA 3796 MTPA 16000 MTPA 16.66 MTPA 300000 MTPA 2400 MTPA Sambha
  49. 49. Page 48 5,134.10 6,336.10 7,964.20 8,960.10 10,418.80 1,688.68 2,100.82 2,651.70 3,012.99 3,372.72 1,707.41 2,139.88 2,585.90 2,839.50 3,136.10 367.42 404.11 486.45 530.18 947.07 1,096.82 1,942.52 2,179.74 2,371.71 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Net Sales / Income From Operations (Rs. In Crores) Asian Paints Berger Paints Kansai Nerolac Shalimar Paints Dulux Paints 1104.7 1122 1362.9 1515.9 1,702.57 169.4 211.2 248.17 293.13 327.7 239.46 263.76 305.1 420.2 307 15.11 16.64 20.96 15.66 199.97 219.9 246.4 279.12 203.37 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 PBT (Rs. In Crores) Asian Paints Berger Paints Kansai Nerolac Shalimar Paints Dulux Paints 774.5 775.2 958.4 1050 1,169.06 120.14 148.3 177.39 209.8 234.25 165.5 205.9 215.88 292.1 206.6 10 11.67 14.46 11.02 159.26 176.6 201.8 218.83 150.22 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 PAT (Rs. In Crores) Asian Paints Berger Paints Kansai Nerolac Shalimar Paints Dulux Paints
  50. 50. Page 49 1,950.90 1673.4 1493.2 1232.2 1153.7 361.96 320.8 270.6 223.29 172.51 307.5 305.3 305.2 264.6 240.66 38.05 37.93 26.57 26.27 204.84 288.05 250.27 185.97 198.58 2013-2014 2012-2013 2011-2012 2010-2011 2009-2010 Operating Profit (EBITDA) Rs In Crores Asian Paints Berger Paints Kansai Nerolac Shalimar Paints Dulux Paints 0.04 0.03 0.07 0.02 0.01 0.19 0.04 0.11 0.2 0.31 0.14 0.09 0.06 0.05 0.04 1.26 1.17 1.13 1.17 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Debt -Equity Ratio Asian Paints Berger Paints Kansai Nerolac Shalimar Paints 53,432.11 9,666.99 7,329.04 175.37 4,993.82 ASIAN PAINTS BERGER PAINTS KANSAI NEROLAC SHALIMAR PAINTS DULUX PAINTS Market Capitalization FY 2014(Rs In Crores) All financial diagram Source: Official Websites of Paint Companies Data Table: Appendix 1.a
  51. 51. Page 50 6.g. Paint Packaging:  Categories & SKUs: 162.35 205.93 259.36 315.08 37.54 18.07 20.84 24.4 28.43 286.8 170 197.28 238.62 264.08 112.66 134.19 160.77 39.63 268.93 295.95 387.79 236.88 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Book Value Asian Paints Berger Paints Kansai Nerolac Shalimar Paints Dulux Paints Putty Distemper Emulsion 1 kg 2 kgs 1 ltr 5 kgs 5 kgs 4 ltrs 20 kgs 10 kgs 10 ltrs 25 kgs 20 kgs 20 ltrs 40 kgs Wood Finish Enamel 500 ml 500 ml 1 ltr 1 ltr 4 ltr 4 ltr 10 ltr 10 ltr 20 ltr 20 ltr All financial diagram Source: Official Websites of Paint Companies Data Table: Appendix 1.a Paints Decorative Paints (70% of market) Solvent/ Oil Based Water Based Industrial Paints (30% of market)
  52. 52. Page 51 6.h. Packaging Trends: Past, Current, Future Products SKU Past Packaging Type Current Packaging Type Future Packaging Type Reason for preference in packaging and changing trends Solvent / Oil based decorative paints Wood Finish 500 ml, 1,4,10,20 ltr Tin (100%) Tin (100%) Tin (100%)  Only tin cans can be used for this application as plastic reacts to solvent  Solvent based paints which typically consist of MC (methylenechlorid), ATM (acetone, toluene, methanol), DBE ( di- based esters) , are packed in metal cans because it does not react with the metal and hence the colour and the quality.  Lighter than plastic containers.  Eco friendly and completely recyclable.  Stronger than plastic containers.  Ease in handling and transporting. Enamel 500 ml, 1,4,10,20 ltr Tin (100%) Tin (100%) Tin (100%) Water based decorative paints Putty 1,5,20,25,40 kgs  HDPE  Tin (Majorly)  HDPE (Majorly)  Tin  HDPE (Majorly)  Tin HDPE is preferred over tin as:  No rusting occurs with HDPE packaging  Easier to carry and handle  No leakage of paints, as with metal containers  Reusable for different applications (storing water, etc)  Sustenance of color is better than with metal packaging.  Containers are more flexible when compared to metal containers.  Easier to clean.  Very attractive, aesthetically pleasing containers.  Colour never dry out even if stored for years.  Best suited for water based paints  Easier to print on HDPE cans.  No substantial price difference between tin containers and HDPE, as both have seen plenty of price fluctuations in the past few years. Distemper 2,5,10,20 kgs  HDPE  Tin (Majorly)  HDPE (Majorly)  Tin  HDPE (Majorly)  Tin Enamel 500ml, 1,4,10,20 ltrs  HDPE  Tin (Majorly)  HDPE (Majorly)  Tin  HDPE (Majorly)  Tin Emulsion 1,4,10,2 ltrs  HDPE  Tin (Majorly)  HDPE (Majorly)  Tin  HDPE (Majorly)  Tin Source: www.feedbackconsulting.com
  53. 53. Page 52 Future of tin packaging: Solvent / Oil based paints Until now, there has been no option other better than tin containers to pack solvent based paints, and hence the market has a positive demand scale for metal (tin) packaging Water based paints  HDPE is aggressive in water based paints. The demand for metal cans is expected to reduce in this segment in future.  Tin packaging need innovative ideas on packaging to survive in this segment. Source: www.feedbackconsulting.com Based on the above findings it can be inferred that the use of tinplate for paint packaging is going to be restricted mainly to the Solvent/Oil based paints category in the Decorative Paint Segment and that the percentage of tin used for packaging water based paint solutions (and industrial paint) is going to be minimal in the times to come. So, only the Solvent Based Paint solutions in the Decorative Category have been taken into consideration to estimate the approximate requirement of tinplate (in Metric Tonne) till 2014. Other Assumptions made for further calculations are:  1Specific Gravity of Decorative Paint is 1.13.  Specific Gravity of Industrial Paints is 1.19.  CAGR of Decorative Paint has been taken constant at 6.6.  Category shares for FY2013 and FY2014 has been taken as constant.  There is no use of tinplate in industrial paint segment.  Usage of tinplate for packaging in other categories of decorative paints other than enamel, primer and wood coating is insignificant. 1 Source: Market Study on Indian Paints & Coatings Industry 2011-2012 by Nielsen
  54. 54. Page 53 Data Analysis and Findings
  55. 55. Page 54 7.a. Assumptions of analysis: 1. TINPLATE is not used for Industrial Paint Packaging 2. Within Decorative Paints only Enamel, Primer and Wood Coatings use TIN for packaging, others do not. 3. Category Shares has been taken as constant 4. CAGR of Decorative Paints has been taken as constant 7.b. Data Collection and Analysis: The study is entirely based on secondary data. Literature Search  CMIE Prowess Database  Market Survey on Indian Paints and Coatings Industry by Nielsen  Market Survey Report by Feedback Management Services Private Limited  Web-based Research Data Analysis: For the first part of the study, total decorative paints market and industrial paints market in 2011- 2012 have been taken as base as per IPA Nielsen Report to make projections for the period 2012-2013 and 2013-2014. Thereafter taking CAGR of each segment as constant, market sizes in 2012-2013 and 2013- 2014 have been calculated. Along with this, the volume (in Metric Tonnes) of each of the categories of decorative and industrial paints and their percentage shares have also been calculated for 2012-2013 and 2013-2014, taking category shares of the period 2011-2012 as constant, as given in the same industrial report. 7.c. Statistical Methods Used: To identify the key parameters that influence the growth of the paints industry, and to establish their relation, Correlation Analysis has been done between the monthly, quarterly, and yearly data (as available in CMIE Prowess Database) of individual parameters vis-à-vis paint production of all kinds (in tonnes) using Scatter Diagram on Microsoft Office Excel to generate Pearson’s Coefficient of Correlation (R) and Coefficient of Determination (R) values for each set of data. After that, with the help of SPSS Software, value of Significance of Probability (p Value) for each correlation analysis i.e. for each value of R has been generated. In the second part of the study, the trend of tinplate packaging in domestic paints industry has been closely monitored. Based on the market survey report conducted by Feedback Management Services Private Limited (a consumer market research firm of global repute), solvent-based Enamel, Primers, and
  56. 56. Page 55 Wood Coatings have been taken into account, since these are the categories that still use tinplate as the major packaging material for their SKUs, unlike other categories wherein low-cost substitutes like HDPE have made significant forays. In the survey report, quantity of tin used for making containers of each SKU size of these three categories was clearly stated. Taking these quantities as constants, tin consumption (in MT) for each category of paints for the year 2012-2013 and 2013-2014 has been calculated. 7.d. Decorative Paint Market Segment wise projection & calculation Volume in Million MT Source: IPA Nielsen Report Category 2011-2012 2012-2013 2013-2014 Enamel 0.42573913 0.454121739 0.4842783 Primer 0.288426667 0.307655111 0.3280853 Wood 0.0528 0.06006 0.06006 Specific Gravity (Source: IPA Nielsen report ) 1.13 Volume in Lit Source: IPA Nielsen Report Category 2011-2012 2012-2013 2013-2014 Enamel 376760292.4 401877645.2 428564832.6 Primer 255244837.8 272261160.3 290341002.9 Wood 46725663.72 53150442.48 53150442.48
  57. 57. Page 56 7.e. Findings:  7.e.i. Segment wise TIN Consumption in total TIN Consumption MT Year 2010-2011 (feedbackconsulting.com) 2011-2012 2012-2013 2013-2014 Enamel 32283 59129.56986 63071.54118 67259.88572 Primer 22147 33588.27939 35827.49802 38206.66781 Wood 4548 7576.054138 8617.761583 8617.761583 Total 58978 100293.90 107516.80 114084.32 7.e.iii. Validation of the accuracy of the methodology adopted  Conversion of mass of decorative paints to volume of decorative paint assuming the specific gravity of decorative paint. The specific gravity is assumed 1.13 (as per IPA Nielsen Market Survey). The feedback consulting report states that the total volume of paint in Million Litre is 1870. i.e. The calculation yields that the paint market volume in Million MT is 2.113. The IPA Nielsen survey states that the paint market volume in Million MT is 2.4. Hence the error percentage is [(2.4-2.113)/2.4]*100 = 11.95%. Hence the accuracy of the calculation is (100-11.95) % = 88.04%. 32283 59129.56986 63071.54118 67259.88572 22147 33588.27939 35827.49802 38206.66781 4548 7576.054138 8617.761583 8617.761583 TIN Consumption Segment Wise Enamel Primer Wood
  58. 58. Page 57 Limitations of Study
  59. 59. Page 58 Limitations of the Study The project work was conducted under following limitations: i. Company-wise data for individual category of paint production volume (Decorative and Industrial paints) were not available to validate against industrial data of total paint production volumes (cumulative as well as decorative and industrial paint categories) provided in the form of IPA Nielsen Survey Report. ii. Compound Annual Growth Rates (CAGR) for total paint production, decorative paint production and industrial paint production- value-wise and volume-wise for 2012-2013 and 2013-2014 have been assumed to remain constant, which is expected to change year-over-year. iii. Percentage share of each category of decorative paints and industrial paints for 2012-2013 and 2013- 2014 has been assumed to remain constant, which may not be so under original circumstances. iv. The conclusion that the major Indian paints companies use tin as the preferred packaging material to pack their solvent-based enamel varieties and High-density Polyethylene (HDPE) to pack water-based enamel varieties is reached at based on packaging data available from paint company websites. v. The trend of using tinplate for packaging water based enamels is gradually declining and the present usage is minimal in comparison to HDPE; but due to unavailability of data as to what extent the trend has declined or what percentage of water based enamels is packed in tin cans presently, the study had to be restricted to only solvent based enamel variety.
  60. 60. Page 59 Scope of Further Study and Recommendations
  61. 61. Page 60 Scope of Further Study: i. An extensive market survey can be conducted to collect primary data regarding to what extent brand owners in the domestic paints industry are preferring tin cans for packaging their products. ii. The study can be further narrowed down to find out whether tin packaging is presently used only in the decorative segment- enamel category, or whether the industrial paints segment too contributes to tinplate consumption. If tinplate is found to be used in the industrial paints segment, then efforts should be made to find out which categories are packed in tin cans, no matter how minimal the percentage share is. iii. From the industrial data provided for the purpose of this study (feedbackconsulting.com) it was evident that a negligible percentage of water-based enamels produced are packed in tins. However, research can be conducted to find out this percentage share in order to yield a more precise result and bring down the error percentage. iv. Forecasting techniques such as Delphi Technique can be applied for more specific demand estimation. A systematic forecasting method that involves structured interaction among a group of experts on a subject. The Delphi Technique typically includes at least two rounds of experts answering questions and giving justification for their answers, providing the opportunity between rounds for changes and revisions. The multiple rounds, which are stopped after a pre-defined criterion is reached, enable the group of experts to arrive at a consensus forecast on the subject being discussed. Delphi is based on the principle that forecasts (or decisions) from a structured group of individuals are more accurate than those from unstructured groups.
  62. 62. Page 61 Appendix 1. Paint Industry Tables a. Table 1: Paint Market Financial Comparison (Source CMIE Database) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sales (Rs. Million) 61,988.40 73,467.70 83,907.80 96,972.70 108,481.90 121,595.80 149,979.10 192,800.00 210,543.00 214608.01 Total income (Rs. Million) 63,223.40 75,354.30 89,876.00 98,385.90 112,674.70 124,947.10 152,925.90 196,103.20 214,907.90 218848.075 PBDITA (Rs. Million) 7,326.10 8,729.80 15,088.40 12,375.90 15,047.80 20,746.50 22,595.40 26,575.10 29,355.00 31290.78611 PBT (Rs. Million) 3,721.20 5,917.90 13,193.80 10,383.90 12,433.90 18,359.00 19,810.00 22,809.70 25,599.10 27974.93056 PAT (Rs. Million) 1,849.90 3,287.50 9,434.20 7,058.70 8,731.20 12,956.90 13,956.20 16,332.10 18,030.50 20081.77778 Net profit margin (Rs. Million) 2.93 4.36 10.5 7.17 7.75 10.37 9.13 8.33 8.39 10.50972222 Operating profit margin (Rs. Million) 10.14 10.82 10.88 11.56 10.16 14.32 13.1 12.08 11.89 13.15944444 Debt to equity ratio (Rs. Million) 0.56 0.58 0.4 0.36 0.27 0.19 0.16 0.16 0.14 0.014166667
  63. 63. Page 62 b. Table2: TCIL Financial Performance (Source www.tatatinplate.com , TCIL Annual Reports) Year Revenue (Rs. Million) PBT (Rs. Million) PAT (Rs. Million) EBIDTA (Rs. Million) Debt to Equity EPS (Rs. Million) Dividend (Rs. Million) Finance Costs (Rs. Million) Dep. (Rs. Million) 2008 410.39 8.08 3.94 43.31 3.55 1.37 0 12.64 22.6 2009 670.78 62.67 34.8 115.81 3.63 6.76 3.6 25.09 28.06 2010 803.02 101.53 67.15 156.26 0.67 8.64 10.79 21.09 33.64 2011 810.94 51.15 35.81 97.98 0.99 2.59 12.56 10.48 36.35 2012 646 27.9 16.55 93.36 0.2 0.52 9.55 17.27 48.19 2013 898.55 49.53 28.23 132.83 0.23 1.69 10.47 25.28 58.02 2014 1084.42 61.19 62.8 173.04 0.1 5.09 16.77 21.15 61.19 c. Table3: Decorative Paint Category Projection of 2013-2014 (based on 2011-2012) (Source IPA Nielsen Market Survey report) Year 2011-2012 Source IPA Nielsen report Total Market for decorative Paints (INR Crore) 18490 Category Value wise market Category Share (%) CAGR Enamels 5200 28.12 10.1 Primer, Thinner 2170 11.74 8.6 Exterior emulsion 3760 20.34 27 Distemper 2125 11.49 11.4 Interior Emulsion 3100 16.77 23.9 Putty ( Acrylic) 770 4.16 501 Cement Paint 580 3.14 8.6 Wood Coatings 785 4.25 17.8 Total 18490 100 Estimation Year 2012-2013 Total Market for decorative Paints (INR Crore) 25247.48 Category Value wise market Category Share (%) CAGR (Assuming Constant) Enamels 5725.2 22.68 10.1 Primer, Thinner 2356.62 9.33 8.6 Exterior emulsion 4775.2 18.91 27 Distemper 2367.25 9.38 11.4 Interior Emulsion 3840.9 15.21 23.9 Putty ( Acrylic) 4627.7 18.33 5.1 Cement Paint 629.88 2.49 8.6 Wood Coatings 924.73 3.66 17.8 Total 25247.48 100.00 Estimation Year 2013-2014 Total Market for decorative Paints (INR Crore) 23515 Category Value wise market Category Share (%) Enamels 6303.45 26.81 Primer, Thinner 2559.29 10.88 Exterior emulsion 6064.50 25.79 Distemper 2637.12 11.21 Interior Emulsion 4758.88 20.24 Putty ( Acrylic) 4863.71 20.68 Cement Paint 684.05 2.91
  64. 64. Page 63 d. Table4: Product Segment with scope of growth(Decorative) (Source IPA Nielsen Market Survey Report) Category Value wise market (2013- 2014) CAGR (Assuming Constant) Enamels 6303.45 10.1 Primer, Thinner 2559.29 8.6 Exterior emulsion 6064.50 27 Distemper 2637.12 11.4 Interior Emulsion 4758.88 23.9 Putty ( Acrylic) 4863.71 501 Cement Paint 684.05 8.6 Wood Coatings 1089.33 17.8 e. Table 5 :Industrial Paint Category Projection of 2013-2014 (based on 2011-2012) (Source IPA Nielsen Market Survey Report) Estimation Year 2011-2012 Total Market for Industrial Paints (INR Crore) 7550 Category Value wise market Category Share (%) Protective and GI (Combine) 2560 33.9 Auto OEM Paints 1830 24.2 Auto Refinish Paints 1100 14.6 Powder Coating 785 10.4 Coil Coating 505 6.7 Can Coatings 225 3 Marine Coatings 190 2.5 Others 355 4.7 Total 7550 100 Estimation Year 2012-2013 Total Market for Industrial Paints (INR Crore) 8440.26 Category Value wise market Category Share (%) Protective and GI (Combine) 2836.48 33.61 Auto OEM Paints 2078.88 24.63 Auto Refinish Paints 1232.00 14.60 Powder Coating 878.42 10.41 Coil Coating 560.25 6.64 Can Coatings 249.62 2.96 Marine Coatings 210.79 2.50 Others 393.84 4.67 Total 8440.26 100.00 Wood Coatings 1089.33 4.63
  65. 65. Page 64 Estimation Year 2013-2014 Total Market for Industrial Paints (INR Crore) 8970 Category Value wise market Category Share (%) CAGR Protective and GI (Combine) 3142.82 35.04 10.8 Protective 1750.00 19.51 GI Paints 810.00 9.03 Auto OEM Paints 2361.61 26.33 13.6 Auto Refinish Paints 1379.84 15.38 12 Powder Coating 982.95 10.96 11.9 Coil Coating 505.00 5.63 Can Coatings 225.00 2.51 Marine Coatings 190.00 2.12 Others 355.00 3.96 f. Table 6: Product Segment with scope of growth(Industrial) ( Source IPA Nielsen Market Survey Report) Category Value wise market (2013- 2014) CAGR (Assuming Constant) Protective and GI (Combine) 3142.82 10.80 Protective 1750.00 GI Paints 810.00 Auto OEM Paints 2361.61 13.60 Auto Refinish Paints 1379.84 12.00 Powder Coating 982.95 11.90 Coil Coating 505.00 Can Coatings 225.00 Marine Coatings 190.00 Others 355.00 g. Table 7: Paint Industry Volume Wise Market Comparison (IPA Nielsen Market Survey Report) Volume in Million MT Year Overall Paint Market Decorative Paint Market Industrial Paint Market 2007-2008 2.48 1.86 0.62 2011-2012 3.11 2.4 0.71 2012-2013 3.29 2.56 0.73 2013-2014 3.48 2.73 0.75
  66. 66. Page 65 h. Key Economic factors affecting the paint industry and correlation between the factors and paint production (CMIE Database) i. Table 9 : Monthly Data: Duration (monthly) Paints of all kinds production (Tonnes ) Crude oil price (Indian Rupee per Barrel) Index of Industrial Production : Base Year 2004-05 Meteorological Sub-division- wise Progress of Rainfall : Actual , Millimetres : Jan 2010 to May 2014 Components of Motor Vehicles, Trailers & Semi-trailers Index May-09 55,098.50 2,819.83 144.3 227,253.00 Jun-09 59,490.30 3,302.59 145.7 232,182.00 Jul-09 62,532.30 3,136.03 146.7 265,357.00 Aug-09 60,615.80 3,461.09 149.4 260,254.00 Sep-09 58,846.60 3,312.26 151 279,254.00 Oct-09 56,394.80 3,461.10 149.6 279,113.00 Nov-09 58,901.20 3,611.89 148.5 292,303.00 Dec-09 60,043.70 3,491.65 162.4 289,451.00 Jan-10 55,560.70 3,541.88 163.6 5.3 289,183.00 Feb-10 57,870.00 3,461.46 157.5 18.1 311,994.00 Mar-10 63,260.00 3,607.99 176.5 15.3 340,634.00 Apr-10 61,312.00 3,744.14 157.8 33.3 370,982.00 May-10 67,490.00 3,457.51 156.5 62.7 319,529.00 Jun-10 69,199.00 3,479.77 156.6 149 312,095.00 Jul-10 73,023.00 3,492.91 161.3 265.1 320,198.00 Aug-10 70,870.00 3,533.47 156.1 254 355,539.00 Sep-10 61,818.00 3,503.86 160.3 246.1 353,506.00 Oct-10 62,528.00 3,629.80 166.6 63.7 373,750.00 Nov-10 60,484.00 3,793.46 158 58.9 369,741.00 Dec-10 64,354.00 4,068.37 175.6 22.7 340,783.00 Jan-11 58,605.00 4,205.30 175.9 11.2 381,902.00 Feb-11 64,670.20 4,442.32 168 22.6 389,660.00 Mar-11 72,468.00 4,888.11 193.1 24.7 414,024.00 Apr-11 68,241.90 5,162.95 166.2 40 472,723.00 May-11 68,902.90 4,856.74 166.2 39.9 440,986.00 Jun-11 72,346.40 4,747.57 171.4 187.7 393,697.10 Jul-11 68,643.40 4,791.52 167.2 221.9 377,161.80 Aug-11 61,784.10 4,548.23 161.4 313.6 401,826.20 Sep-11 62,050.30 4,812.40 164.3 183.5 377,349.10 Oct-11 54,839.20 4,920.06 158.3 33.6 390,348.00 Nov-11 66,534.20 5,340.76 167.5 26.7 328,220.10 Dec-11 65,958.40 5,488.30 180.3 4.8 434,315.40 Jan-12 62,793.00 5,475.69 177.6 28.1 403,529.30 Feb-12 67,939.50 5,540.75 175.2 14.2 425,985.20 Mar-12 71,197.60 5,927.55 187.6 10.4 452,106.60 Apr-12 73,039.50 5,892.63 164.1 35.4 488929.6 May-12 68,074.50 5,659.74 170.3 44.8 438,930.60
  67. 67. Page 66 Jun-12 65,656.50 5,083.60 168 108.2 454,364.80 Jul-12 58,429.40 5,372.19 167.1 200 367,415.00 Aug-12 61,014.40 5,849.31 164.7 300.8 386,147.70 Sep-12 65,477.40 5,800.66 163.1 198.7 405,802.80 Oct-12 71,837.00 5,475.37 171.6 5.5 401,968.10 Nov-12 64,083.00 5,536.01 165.8 29.7 422,537.60 Dec-12 59,540.00 5,525.53 179.3 10.6 379,235.90 Jan-13 65,683.00 5,705.06 182 13.4 391,377.70 Feb-13 64,524.00 5,786.01 176.2 38.6 437,792.00 Mar-13 66,345.00 5,580.74 194.2 14.5 450,149.20 Apr-13 63,142.00 5,375.04 166.5 25.9 474,350.40 May-13 63,049.00 5,467.56 166 53.2 415,883.60 Jun-13 64,230.00 5,817.69 164.9 189.2 418,629.80 Jul-13 65,273.00 6,289.39 171.7 342.3 359,954.10 Aug-13 66,635.00 6,830.35 165.4 237 420,436.20 Sep-13 70,166.00 6,928.11 166.3 135.3 396,713.70 Oct-13 70,373.00 6,499.62 169.6 158.3 404,555.20 Nov-13 62,150.00 6,432.65 163.6 14.3 405,582.40 Dec-13 61,195.00 6,534.90 179.5 6.1 377,651.20 Jan-14 64,568.00 6,353.32 184 18.7 382,886.60 Feb-14 62,344.00 6,528.65 173.1 21.4 414,340.30 Mar-14 66,280.00 6,343.00 193.2 38.5 426,289.30 Apr-14 64,910.00 6,333.82 172.1 25.3 405,026.20 6,274.31 66.5 410,841.90 Correlation 0.362758623 0.402063924 0.138898641 0.507273849 p-value 0.004342621 001426288 0.289720586 3.3773E-05 ii. Table 10 : Quarterly Data: Duration (quarterly) Paints of all kinds production (Tonnes ) Automobile Production Jun-07 145,969.90 2,671,075.00 Sep-07 165,623.20 2,791,623.00 Dec-07 145,322.00 2,991,420.00 Mar-08 144,110.10 2,944,282.00 Jun-08 160,215.70 2,932,941.00 Sep-08 177,783.50 3,204,506.00 Dec-08 126,682.50 2,578,051.00 Mar-09 131,110.50 2,871,327.00 Jun-09 165,825.40 3,173,769.00 Sep-09 181,994.70 3,604,127.00 Dec-09 175,339.60 3,687,056.00 Mar-10 176,690.70 4,159,669.00 Jun-10 198,001.00 4,258,162.00 Sep-10 205,711.00 4,655,275.00 Dec-10 187,366.00 4,724,985.00 Mar-11 195,743.20 5,013,090.00 Jun-11 209,491.20 5,040,527.00
  68. 68. Page 67 Sep-11 192,477.80 5,339,640.00 Dec-11 187,331.80 5,321,474.00 Mar-12 201,930.10 5,609,523.00 Jun-12 206,770.50 5,427,682.00 Sep-12 184,921.20 5,198,552.00 Dec-12 195,460.00 5,369,740.00 Mar-13 196,552.00 5,483,188.00 Jun-13 190,421.00 5,235,988.00 Sep-13 202,074.00 5,405,484.00 Dec-13 193,718.00 5,752,340.00 Mar-14 193,192.00 5,840,207.00 Correlation 0.859786901 p-Value 4.97001E-09 iii. Table 11: Yearly Data Duration (yearly) Paints of all kinds production (Tonnes ) Gross Domestic Product at Current Prices : Base Year 2004-05 At factor cost (Rs. Millions) Value of Output of Construction Sector at Current Prices : Base Year 2004-05 ( Rs. Million ) Automobile Sales Number 2005-06 503,205.20 33,905,020.00 7,619,310.00 10,104,291.00 2006-07 543,752.30 39,532,750.00 9,204,230.00 11,652,819.00 2007-08 601,025.20 45,820,850.00 11,180,350.00 11,442,256.00 2008-09 595,792.10 53,035,670.00 12,984,980.00 11,681,656.00 2009-10 699,850.50 61,089,030.00 14,380,130.00 14,677,553.00 2010-11 786,821.20 72,488,590.00 16,635,420.00 18,560,285.00 2011-12 791,230.90 83,916,900.00 20,078,450.00 21,201,431.00 2012-13 783,703.70 93,888,760.00 22,171,750.00 21,587,371.00 2013-14 779,405.00 Correlation 0.95001151 0.941300595 0.962667631 P- Value 7.24146E-05 0.000133634 2.35344E-05 iv. Packaging in different SKUs Enamel. Table 12: TIN used for packaging Enamel 2010-2011 TIN for unit of diff SKUs ( Enamel) SKU (ltrs) TIN required (pcs) TIN required MT TIN quantity in unit can 0.05 41140000 1259 3.06028E-05 0.1 41140000 1674 4.06903E-05 0.2 30855000 1753 5.68141E-05 0.5 45254000 4394 9.70964E-05 1 86394000 13521 0.000156504 4 16970250 7872 0.000463871 10 617100 679 0.001100308 20 514250 1131 0.002199319 262884600 32283
  69. 69. Page 68 Table 14: TIN used for packaging Enamel 2012-2013 Enamel 2012-2013 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 1 4018776.452 80375529.05 15.64945227 2459.717819 0.1 2 8037552.905 80375529.05 15.64945227 3270.506457 0.2 3 12056329.36 60281646.79 11.7370892 3424.849354 0.5 11 44206540.98 88413081.95 17.2143975 8584.591022 1 42 168788611 168788611 32.86384977 26416.07993 4 33 132619622.9 33154905.73 6.455399061 15379.58592 10 3 12056329.36 1205632.936 0.234741784 1326.567434 20 5 20093882.26 1004694.113 0.195618153 2209.643251 Total 100 401877645.2 513599630.6 100 63071.54118 Table 15: TIN used for packaging Enamel 2013-2014 Enamel 2013-2014 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 1 4285648.326 85712966.53 15.649 2623.06 0.1 2 8571296.653 85712966.53 15.649 3487.69 0.2 3 12856944.98 64284724.89 11.737 3652.28 0.5 11 47142131.59 94284263.18 17.214 9154.66 1 42 179997229.7 179997229.7 32.864 28170.27 4 33 141426394.8 35356598.69 6.4554 16400.89 10 3 12856944.98 1285694.498 0.2347 1414.66 20 5 21428241.63 1071412.082 0.1956 2356.38 Total 100 428564832.6 547705856.1 100 67259.89 Table 13: TIN used for packaging Enamel 2011-2012 Enamel 2011-2012 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 1 3767602.924 75352058.48 15.649452 2305.99 0.1 2 7535205.848 75352058.48 15.649452 3066.1 0.2 3 11302808.77 56514043.86 11.737089 3210.8 0.5 11 41443632.17 82887264.33 17.214397 8048.05 1 42 158239322.8 158239322.8 32.86385 24765.1 4 33 124330896.5 31082724.12 6.4553991 14418.4 10 3 11302808.77 1130280.877 0.2347418 1243.66 20 5 18838014.62 941900.7311 0.1956182 2071.54 Total 100 376760292.4 481499653.7 100 59129.6
  70. 70. Page 69 Primer Table 16: TIN used for packaging primer 2010-2011 TIN for unit of diff SKUs ( Primer) SKU (ltrs) TIN required (pcs) TIN required MT TIN quantity in unit can 0.05 0 0 0 0.1 0 0 0 0.2 0 0 0 0.5 0 0 0 1 67320000 10536 0.000156506 4 21037500 9759 0.000463886 10 841500 926 0.001100416 20 420750 926 0.002200832 Total 89619750 22147 Table 17: TIN used for packaging primer 2011-2012 Primer 2011-2012 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 0 0 0 0 0 0.1 0 0 0 0 0 0.2 0 0 0 0 0 0.5 0 0 0 0 0 1 40 102097935.1 102097935.1 75.117371 15979 4 50 127622418.9 31905604.72 23.474178 14800.6 10 5 12762241.89 1276224.189 0.9389671 1404.38 20 5 12762241.89 638112.0944 0.4694836 1404.38 Total 100 255244837.8 135917876.1 100 33588.3 Table 18: TIN used for packaging primer 2012-2013 Primer 2012-2013 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 0 0 0 0 0 0.1 0 0 0 0 0 0.2 0 0 0 0 0 0.5 0 0 0 0 0 1 40 108904464.1 108904464.1 75.11737089 17044.22807 4 50 136130580.1 34032645.03 23.4741784 15787.26478 10 5 13613058.01 1361305.801 0.938967136 1498.002581 20 5 13613058.01 680652.9007 0.469483568 1498.002581 Total 100 272261160.3 144979067.8 100 35827.49802
  71. 71. Page 70 Table 19: TIN used for packaging primer 2013-2014 Primer 2013-2014 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 0 0 0 0 0 0.1 0 0 0 0 0 0.2 0 0 0 0 0 0.5 0 0 0 0 0 1 40 116136401.2 116136401.2 75.117 18176.07134 4 50 145170501.5 36292625.37 23.474 16835.63784 10 5 14517050.15 1451705.015 0.939 1597.479315 20 5 14517050.15 725852.5074 0.4695 1597.479315 Total 100 290341002.9 154606584.1 100 38206.66781 Wood Coating Table 20: TIN used for packaging wood coating 2010-2011 TIN for unit of diff SKUs ( Wood) SKU (ltrs) TIN required (pcs) TIN required (MT) TIN quantity in unit can 0.05 0 0 0 0.1 0 0 0 0.2 0 0 0 0.5 8415000 817 9.70885E-05 1 23842500 3731 0.000156485 4 0 0 0 10 0 0 0 20 0 0 0 Total 32257500 4548 Table 21: TIN used for packaging wood coating 2011-2012 Wood 2011-2012 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 0 0 0 0 0 0.1 0 0 0 0 0 0.2 0 0 0 0 0 0.5 15 7008849.558 14017699.12 26.086957 1360.96 1 85 39716814.16 39716814.16 73.913043 6215.1 4 0 0 0 0 0 10 0 0 0 0 0 20 0 0 0 0 0 Total 100 46725663.72 53734513.27 100 7576.05
  72. 72. Page 71 Table 22: TIN used for packaging wood coating 2012-2013 Wood 2012-2013 SKU (ltrs) % share Volume in Lit tin required (pcs) %share TIN(MT) 0.05 0 0 0 0 0 0.1 0 0 0 0 0 0.2 0 0 0 0 0 0.5 15 7972566.372 15945132.74 26.08695652 1548.089537 1 85 45177876.11 45177876.11 73.91304348 7069.672046 4 0 0 0 0 0 10 0 0 0 0 0 20 0 0 0 0 0 Total 100 53150442.48 61123008.85 100 8617.761583
  73. 73. Page 72 Reference 1) Bibliography a. Annual Reports of TCIL b. Product Brochures of TCIL c. Application for The Tata Business Excellence Model 2013 d. CMIE Database e. Feedbackconsulting.com report f. IPA Nielsen Market Survey 2) Web References a. www.wikipedia.org b. www.tatatinplate.com c. www.asianpaints.com d. www.nerolac.com e. www.bergerpaints.com f. www.shalimarpaints.com g. www.dulux.in h. www.ehow.com i. www.niir.org j. www.equitymaster.com k. www.business-standard.com l. www.uplonline.com m. www.moneycontrol.com n. www.profitalyzer.com

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