Creating a new paint company branding & product managemet
Feasibility Analysis to
launch a New Paint Brand
India is the fastest growing paint market in Asia Pacific
• India’s paint industry size is estimated to be €3.5bn.
• The following paints are available in the market:
Resin Paints (Alkyd)
Single Coated Paints
Primary Rubber based Paints
Texture oriented Paints
• The decorative paints to industrial paints ratio is 70:30 both in value and volume terms.
• Almost half of the revenues earned by the Indian paint industry are through enamels.
• The demand in the paint industry is seasonal to some extent. While the demand dips in the monsoon season, it
is the maximum in the festive season.
• Market has been growing on average 15% annually during the last five years and thus it is growing 1.5-2
times faster than GDP.
• The expected CAGR is 13-15 % for the period FY13-14.
• 30% 0f the main business is comprised of new construction projects.
The paint industry growth drivers are:
• Repainting demand fuelled by the real estate boom over the past few years
• Changing consumer preferences, from pure aesthetics to value added features
• Rising demand for industrial paints
• The organized section of the industry is growing faster than the organized sector.
The key drivers of decorative paints are:
• Robust economic growth leading to higher disposable income.
• Continued growth in real state.
• Change in perception towards painting.
• Launch of affordable houses.
• Shift in demographic profile resulting in increase in number of households.
• Various innovations of market players.
The Industrial Paint Segment is dominated by organized sector.
• Automotive paint form approx. 45 % of industrial paints.
• Performance coating forms approx. 25 % of industrial paints.
• Consumer durables and auto ancillary products use power coating.
• Coil coating are used in industrial constructions, electric equipment and interiors of trains & buses.
The unorganized sector with about 2,000 units having small and medium sized manufacturing plants controls
around 35 % of the paint market.
Out of the rest, most is controlled by the top 5 companies and they are:
• Asian Paints (Overall market leader due to leadership in decorative segment)
• Kansai Nerolac (Market leader in automobile industrial paint segment, also into decorative segment)
• Berger Paints (Major revenue from decorative segment, also into industrial paints)
• Akzo Nobel (Major revenue from decorative segment, also into automotive paints)
• Shalimar Paints (Mainly into decorative and non-automobile industrial coatings)
Indian GDP is expected to grow 5.5-7.0 % annually the next few years.
Because of the high correlation between GDP and paint volume growth, decorative paints are expected to grow
on the back of strong economic momentum.
• Real estate boom in the past few years will lead to strong demand for repainting.
• At the moment the per capita consumption of paint in India is merely around 1 kg (20 kg in the developed
countries, global average 15 kg) so the absolute consumption of paint in India is expected to rise.
• The paint demand in tier II and tier III cities is growing at a faster rate than the tier I cities.
• Expected decrease in the use of distemper in future.
All the manufacturers have their own manufacturing units to maintain the quality.
• Paints have high volume-to-value ratio and require manufacturing near the market.
• Entry barrier is very high because the top five players have maintained market share despite of entry of new
• Outsourcing is limited and only for the low-end paints.
• The competition in the paint industry is becoming more intense with the entry of new foreign players like
Jotun, Nippon & Sherwin Williams.
• Crude prices have been in an upswing and this is raising the cost burden of the industry players.
Mechanism of Paints
Surface Coating etc.
Paint Industry Segmentation
Decorative: Major segments in decorative include exterior wall paints, interior wall paints, wood finishes and
enamel and ancillary products such as primers, putties etc.
Decorative paints account for over 70% of the overall paint market in India.
Demand for decorative paints arises from household painting, architectural and other display purposes.
Demand in the festive season (September-December) is significant, as compared to other periods.
Industrial: Three main segments of the industrial sector include automotive coatings, powder coatings and
User industries for industrial paints include automobiles engineering and consumer durables.
The industrial paints segment is far more technology intensive than the decorative segment.
Distribution Process of Paints
Factors affecting Paint Industry
Increasing level of income & education
Increasing share of organized sector
Development of the Realty, Automobile and Infrastructure sector
Availability of financing options
Increasing Penetration in the Rural Markets
New concepts of Paints:
• Multi colored room concept.
• Lead free color.
PORTER’S 5 FORCES
High raw material
looking to other
alternatives to paint
Indian Paint Market has very strong potential in terms of market share in the organized sector
Comprehensive nation wide coverage of the market - urban, semi-urban and rural areas.
• Different segment required by different customer and industry has its own growth area and market.
• A network of 25,000 dealers spread all over the country is available.
• The pricing strategy is oriented to middle/lower end consumers
• Paint Industry is quite strong in production-marketing coordination. Their policy Of offering
tailor-made products to suit customer need has resulted in an ever growing product range.
• In-house production, no outsourcing, high reliability in suppliers, superior in quality assurance.
• Widening product mix puts strain on production distribution, accounting and administration;
• Innovation in developing new products is inadequate;
• Ever expanding product mix throws some strain on inventory management;
• positioning for the premium brands meant for urban markets;
• Seasonal demand and hence in off seasons it can lead to cash flow problems;
• The automobile industry accounted for 50% of the industrial paint market.
• Indian is the fastest growing paint market in Asia Pacific.
• The paint industry growth drivers are:
– Repainting demand fuelled by the real estate boom over the past few years.
– Changing consumer preferences, from pure aesthetics to value added features.
– Raising demand for industrial paints.
• Domination of few foreign companies.
• Since both Goodlass Nerolac (43%) and Berger's (14%) have a higher market share than AP's
(14%), it is possible that in the future, they may capture the entire industrial paint market;
• Competitors have gone in for hi-tech with instacolour spot mixing. For example, J&N's
instacolour offers 626 shades;
• Automated paint blending in retail points already there. ICI's Touch Color and Berger's Color
Bank are indicative of this;
• Competition is catching up fast, hi-tech facilities gives abundant choices.
Strategies for Urban Consumer:
• Providing innovative products & painting techniques.
E.g.: Reflective paints, Day night shade change, 3D texture, Radiance, Multiple tints, reflective color.
• Online marketing & online shopping for paints & paint related products.
• Online suggestions & makeover tips.
• Providing safe, odorless, low VOC, durable paints with all weather guard & high gloss attributes.
• Use of existing supplier network.
Strategies for Semi Urban & Rural Consumer:
• Paints with increased spreadability, more than of normal paints.
• High washability & durability of paints.
• Main focus on distemper & enamel paints.
• Use of hub & spoke supply chain to capture semi urban & rural market.
• Name of the Brand
• Tag Line
• Add Campaign
• Brand USP
: Roshan Paints
: “Roshan Bharat Ka Roshan Paints.”
: Celebrity endorsement with Hrithik Roshan.
: High quality innovative ‘Desi’ Brand.
Segment: Decorative Paints
Target : Households of Urban, Semi-Urban & Rural Areas
Positioning : Colors of India
• The company would base its promotion & branding strategies on consumer
Identification of Opportunity for Branding:
Strategies for competitors:
• Faster Service
• Better quality & packaging than others.
• Low cost solution to their clients.
• Strong relationship with customer & suppliers.
• Investmentent in R&D to create more varieties in products.
• Introducing technological innovations maintaining CSR & sustainability.
Product Life Cycle:
New business Ideas
Tie ups, CSR, Capacity
Offers, Innovation, Reposit
• Tie up with ASI for restoration & renovation works of heritage sites.
• Entry into industrial paint segment.
• Manufacturing of roof solution products.
• Damp proof wall care products.
• Production of tiles.
Land & Site Development
Plant & Machinery
Misc. Fixed Assets
LAND & SITE DEVELOPMENT
Cost of Development
Levelling & Fencing
Entry Points & Guard rooms
A/C Compressor Room / DG Set room
Can Store Room
Store / Tool Room / Canteen
Service Room (Underground)
PLANT & MACHINERY
Canning& Other Equipment
MISCELLANEOUS FIXED ASSETS
Interest During Construction Period
Unit cost (Rs.)
Development / Building
Plant & Machinery
Miscellaneous Fixes Assets
Depreciation (@5% on 18.77Cr.)
Interest (@10% on 4.62 cr.)
Tax (@ 10%)
Production capacity =3000 TPA
Avg. Selling Rate = Rs.100/Ltr.
Loan = 4.62 Cr.
• For the CSR activities the company would tie up with “Aravind eye hospital” and provide them with
financial assistance and help them in setting up eye check up camps in the remote areas.
• The philosophy behind this CSR activity is that ours being a paint company which helps in decorating
and bringing colors to peoples life we should also do something for those whose life just has the shades
of black and white.