The document provides an overview of the Indian paints industry, including its history, key players, market characteristics, trends, and consumer behavior. It discusses the four main players in the industry (Asian Paints, Goodlass Nerolac, ICI Paints, Berger Paints), their market shares, brands, and strategies. The paints industry in India is growing steadily and expected to further consolidate, driven by increasing housing, automotive, and infrastructure development. Per capita consumption of paint is low in India compared to other countries, indicating further growth potential.

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Paints

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Contents
 Market Characteristics
 History of the Indian Paints Industry
 Industry Overview and Outlook
 Trends in the Industry
 Porters Five Forces Analysis
 The Business Process
 Consumer Purchase Behavior
 Player Profiles
 Brands

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Market Characteristics
 Decorative paints
• Caters to the housing sector
• Premium paints (acrylic emulsions) used mostly
in the metros.
• Medium range (enamels) popular in cities and
smaller towns.
• Economy paints (distempers ) demanded in the
suburban and rural markets
• Distribution network is the key
 Industrial paints
• Include powder coatings, high performance
coating, automotive and marine paints
• Two-thirds of the industrial paints produced in the
country are automotive paints
• Technological superiority and tie-up with
automobile manufacturers

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Indian Paints Industry: A Brief History
 1902 – Shalimar Paints, Calcutta
 1920-45: Asian Paints, Nerolac started operations
 1965-91: Paints looked upon as luxury item
 1983: Demand for automotive paints picked up with
entry of Maruti
 1991: Reduction in excise duty and many controls on
the industry removed.
 After 1991: Steady growth, slow disappearance of
unorganized sector units and industry fragments.

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Industry Overview
 Four main players
• Asian Paints- 42%
• Goodlass Nerolac-20%
• ICI Paints- 14%
• Berger Paints- 15%
 Asian Paints dominates decorative segment
 Goodlass Nerolac dominates industrial segment

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Industry Characteristics
 Demand for paints linked to the industrial and
economical growth
 Decorative paints market naturally price-elastic
 Industry majors maintain a vast dealership network
 High inventory levels

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Key Success Factors
 Costs and price drivers – raw materials
 Working capital management
 Heavy seasonality of demand
 Brand building
 Stocking and distribution
 Access to latest technologies

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Trends in the Industry
 Reduction in excise duties and taxes – larger scale
plants
 Customer power !
 Proliferation of industrial use
 Super premium decorative segment – better margins
 Niche marketing strategies
 India – an exporter
 Industry expected to further consolidate

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More Trends…
 Increased emphasis on attractive packaging, more
sturdy packaging, lighter SKUs, etc.
 From tin cans to plastic tubs
 Asian Paints introducing “sub-stockists”
 Focus on rural markets
 Computerization and ERP
 Less seasonality

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Market Practices
 Discounting is the norm
 Dealers operate with the company on credit – 2 to 6%
 Stock sometimes “undervalued” to “save” taxes and excise
 Bulk purchasers and “key accounts” are given additional
discounts
 Distinct Segmentation in the Market
• Super economy segment – cement based - <Rs 100 per litre
• Economy segment - oil based – Rs 100/- per litre
• Medium segment – Rs 200 per litre
• Premium segment- Rs 300 per litre
• Super premium segment – Rs 1200 for a four litre pack

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Industry Prospects
 Market slated to grow from 9000 crores to 18000
crores in the next five years !
 Per capita consumption of paint is India is around 800
gram, compared to 15-25 kgs in most developed
countries.
 Organized sector will grow 16 to 20% per annum
 30 million new homes, millions of cars and vehicles,
Infrastructure projects all will fuel huge demand !

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International Players in India
 International retailers had until January 2006 been
able to operate in India only through franchise
arrangements with local partners
 The Indian Government passed a regulation in
January 2006 allowing entry of foreign single retail
brands without the need for franchise arrangement
 Starting February 2006, foreign single retail brands
are allowed to:
• open their own stores in India;
• own upto 51% of local joint ventures

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Porter’s Five Forces Analysis
Buyers power: High
Supplier’s power: High
Threat of entry
Low
Threat of substitutes
Low
Thus, overall the
industry is profitable
Industrial rivalry :
High

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Business Process
 Factory - nimbleness in the supply chain, efficiency and speed of
the production very important , since inventory turnover periods
are significantly high.
 Depots - normally owned by company, strict quality control
essential to prevent loss of inventory due to product
deterioration leading to them not meeting the product
specifications.
 Dealers
• Dedicated dealers
- Terms of trade more favourable
- Higher margins , exclusivity of distribution , greater variety of product
lines stocked , technical support in terms of MIS
• Independent dealers
- Form a large part of the distribution process in paints industry
 Customer
Factory
Depot
Dealer
Customer

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 Factors affecting purchase are price, finish, durability,
range of colours/ shades
 Maximum demand from the household sector who uses
paint as a decorative medium
 Purchase decision influencer-regarding the above
parameters - the dealer or the painter- whose view is
given major importance
Consumer Behaviour –
Decorative Paint

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 The major factors affecting purchase decision:
• Brand, price, quality, durability, timely supply, credit and
discount terms, logistics service, relationship with supplier
 Access to technological parameters assist paint
companies to customize their products as per needs of
specific industrial sectors
Consumer Behaviour –
Industrial Paints

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The organized sector
 Asian Paints
 Goodlass Nerolac
 ICI Paints
 J&N
 Shalimar Paints
Players in the Industry

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Asian Paints
 US $ 680 million Asian Paints Group has a presence in
23 countries
 Ranks among the top 10 decorative coatings companies
in the world
 Subsidiaries - Berger International Ltd., Apco
Coatings, SCIB Paints and Taubmans
 Market leader in the decorative segment

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Asian Paints
 Asian Paints CSF – Supply Chain
 Market driven strategy
 Colour World – Paint retailing of the future
 ColourNEXT 2006 , Kids World
 Royale Play – readymade special effects
 Bye Bye Gattu

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Asian Paints
Promotional campaigns
 Point of sales activities and dealer incentives
 Shift from individual branding to umbrella branding –
building the Asian Paints brand
 Messages of durability, excellent finish, wide range
of colour availability – shade combinations

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Asian Paints
Asian PaintsAsian Paints
ApexApex
Asian PaintsAsian Paints
Ace ExteriorAce Exterior
Asian PaintsAsian Paints
Premium GlossPremium Gloss
Asian PaintsAsian Paints
Apcolite PremiumApcolite Premium
Asian PaintsAsian Paints
Premium EmulsionPremium Emulsion

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Asian Paints
TouchwoodTouchwood
Utsav AcrylicUtsav Acrylic
DistemperDistemper
Tractor AcrylicTractor Acrylic
DistemperDistemper
Tractor EmulsionTractor Emulsion

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ICI Paints
 Multi-divisional company dealing in rubber
chemicals, paints, polycarbonate, others
 Revenues in 2004 - $157.51 million (paints business)
 Mainly auto refinishes and decorative paints
 Present in all categories
 Brands - Dulux, Duco, and 2K
 Only Indian decorative paint manufacturer producing
paints that are totally free from toxic metals

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ICI Paints
Promotional campaigns/positioning
Premium brands advertised through television
 Dulux Interior - Washability, durability, fungal
resistant, smoothness and exclusiveness
 Weathershield (exterior wall finish) – Prevents
exterior walls from cracking and eroding due to high
rutile content

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ICI Paints
Dulux VelvetDulux Velvet
TouchTouch
Dulux SupremeDulux Supreme
3-in-13-in-1
Dulux AcrylicDulux Acrylic
EmulsionEmulsion
MaxtiliteMaxtilite
DistemperDistemper
Dulux SatinDulux Satin
FinishFinish
Dulux SuperglossDulux Supergloss
5-in-15-in-1
Dulux GlossDulux Gloss

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ICI Paints
DuluxDulux
WeathershieldWeathershield
MaxMax
SupercoteSupercote
ExteriorExterior
Acrylic PrimerAcrylic Primer
MaxtiliteMaxtilite
DistemperDistemper
DuluxDulux
TileshieldTileshield

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Goodlass Nerolac
 Goodlass Nerolac is the second largest paint company
 Gross group turnover of approximately Rs 1200
crores
 Undisputed leader in industrial segment with a
market share of 45% in industrial paints

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Goodlass Nerolac
 Five strategically located manufacturing units and a
strong dealer network of over 11,500 dealers across
the country
 As opposed to the Asian Paints strategy of hitting the
entire gamut of paint segments, GNPL - mainly
concentrated on industrial paints segment, which is
technology driven

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Goodlass Nerolac
 Industrial
• Automotive coatings
• General industrial coatings
• High performance coatings - DIMETCOTE
• Powder coating
Company Product Category
Kansai Paint Co., Japan ED Primers, Automotive & Industrial
Coatings
Nihon Parkerizing, Japan Pre-Treatment Chemicals
Oshima Kogyo, Japan Heat Resisting paints
Ameron, USA High Performance Coatings

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Goodlass Nerolac
 Decorative paints
• "Nerocem" which is cement paint
• "Suraksha" the value pack
• "Nerotex" which is a texturized paint
• "Excel" the premium exterior paint
• “Impressions” the premium interior paint
• “Wonderwood” can be used for wooden surfaces

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