Introduction about paint industry

Introduction

Business Plans and Organizational Strategy

Introduction

Interior design has played a vital role in property pretty much since man began

living in caves. The endless debate between art and design could of course rear its' head

again, however when caveman decorated his cave interiors with scenes from hunts and

feasts, surely these can be seen as enhancing the interior!?

From those early days on we've been celebration to interior designers from every

walk of life decorating property with materials from all round the planet, with antique

furniture and contemporary furniture, luxurious interior paints and tiles, fantastically modern

fixtures and fittings, kitsch doilies and window coverings from glamorous plantation shutters

to interior designed be spine shutters……………………………………...The list is truly

endless!

Interior design can be floral and romantic like the flowing lines of a song. Materials

used for interior design have played a great role in the development of this discipline of

design as an interest, obsession and way of life for many people today and historically. In

medieval times the decorated wall hangings which adorned castle walls were not simple

amazingly detailed items of interior design, but played an enormous role in education,

heating and decoration - take the world famous Bio tapestry. Religious icons which have

decorated churches together with stained glass windows for centuries could only come about

as molten lead, gold leaf and other skills were introduced and these served to educate,

provide light, offer hope and inspiration to every pair of eyes which viewed them.

In the early part of the 20th century concrete was invented - not only were exteriors

transformed, but interiors were captivated by this hard, cold new material, think Layer Cake

and a luxurious male styled bathroom in dark concrete... Glass, metal, plastic, fabric, paint...

Just about every material known to man has been utilized to design or interiors.

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http://www.interiordesigntrends.co.uk/Interior-designers/


The beauty of interior design as a subject and interest, there are no boundaries, form

and beauty can meet in function, as long as we're talking of items for the home or

workplace, which serves to fulfill a function, interior design, meets its needs.

The Use of Colour in Interior Design

The biggest influence on the human

state of mind with the possible

exception of the weather is colour. We

are surrounded by references: "a red

rag to a bull", "blue with cold", "green

with envy", "in the pink". The

psychology of colour and how colour affects human behavior is now a

serious course of study at universities. Hospital rooms, classrooms, fast

food restaurants and offices are painted in colours to influence the

behavior and mood of the people who use these spaces. Even the

products on the shelves of your local supermarket have been packaged in

colours carefully chosen to attract your attention and encourage you to

buy. So why are people so hesitant to use colour in their home

environments? Why is the neutral space currently the ideal? Why are we

afraid of colour?

The first step to relinquishing fear in the use of colour is to understand

the psychological effects it has on us. Red is known to stimulate the

appetite - so it’s an excellent colour for dining rooms. Both blue and

green are fresh and calming. They are the colours of nature and could be

popular choices for bedrooms. Yellow and orange are energizing like the

sun, so are good choices in rooms where your energy may need boosting

- the kitchen perhaps. Orange in its toned down terracotta form can be

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ideal in a home office; it has the energizing effect of

both red and orange but isn’t so bright that you won’t be able to stay at

your desk! Scientists have studied the effect of color on our mood, health

and way of thinking for many years. Our preference of one color over

another may have something to do with the way color makes us feel.

Light is absorbed by the eye and converted into another form of energy,

which enables us to see color. This energy affects and is felt even by

people without sight. Light energy stimulates the pituitary and pineal

glands, which regulate hormones and other physiological systems in the

body.

We know that red stimulates, excites and warms the body, increases the

heart rate, brain wave activity and respiration. Mothers are encouraged

to stimulate infants' brains by dangling mobiles containing bright red

balls on them.

If high blood pressure, hypertension or poor coordination afflicts a

person, they should not decorate their rooms with the color red.

Pink has a soothing effect and can even relax the muscles. Pink's

tranquilizing effect has gained its entrance in prisons, hospital rooms and

drug centers.

Are there finicky eaters in your kitchen? Try using an orange tablecloth or

placemats. Orange stimulates the appetite and reduces fatigue. Of

course, if you're on a diet, avoid orange.

Yellow is a memory stimulator. A touch of yellow in every room might just

help you remember where you left your keys or eyeglasses. Yellow also

raises blood pressure and pulse rate but not to the degree that red does.

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Green reminds us of spring and therefore new

beginnings. It brings feelings of calm, anticipation and hope, and it has a

soothing, relaxing effect on the body as well as the mind. Still on that

diet? Green is good as it could help control the anxiety associated with

the discipline of controlling yourself from impulsive and over-eating.

Maybe that avocado green refrigerator isn't such a bad thing after all.

Blue is another relaxing color. Pleasant dreams might be the end result of

coloring the bedroom in shades of blue. It has a calming effect on the

body: it lowers blood pressure, heart rate and respiration and in hot,

humid weather has a cooling effect.

Another study shows that blue in the classroom can be a good thing.

Children prone to tantrums and aggressive behavior became calmer after

being in a classroom painted blue. Both blind and sighted children

reacted the same when placed in blue surroundings.

More likely than not, if a particular color is preferred, it most likely is

needed by the body. The pleasant and appealing response the body gives

is a sort of "thank you" from body to brain.

COLOUR PSYCHOLOGY AS THERAPY

Several ancient cultures, including the Egyptians and Chinese,

practiced chromo therapy, or using colors to heal. Chromo therapy is

sometimes referred to as light therapy or colourology and is still used

today as a holistic or alternative treatment.

In this treatment:

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Red was used to stimulate the body and mind

and to increase circulation.

Yellow was thought to stimulate the nerves and purify the body.

Orange was used to heal the lungs and to increase energy levels.

Blue was believed to soothe illnesses and treat pain.

Indigo shades were thought to alleviate skin problems.

Most psychologists view color therapy with skepticism and point out that

the supposed effects of color have been exaggerated. Colors also have

different meanings in different cultures. Research has demonstrated in

many cases that the mood-altering effects of color may only be

temporary. A blue room may initially cause feelings of calm, but the

effect dissipates after a short period of time.

A BRIEF HISTORY OF MILK PAINT - IN THE BEGINNING

Paint has been used by mankind since before recorded history, first as

decoration, and much later as a protective coating. The oldest painted

surfaces on earth were colored with a form of milk paint. Cave drawings

and paintings made 8,000 years ago, even as old as 20,000 years ago,

were made with a simple composition of milk, lime, and earth pigments.

When King Tutankhamen's tomb was opened in 1924, artifacts including

models of boats, people, and furniture found inside the burial chamber

had been painted with milk paint.

Because the original formula for milk paint was so simple to make and

use, it was for thousands of years a major form of decoration throughout

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the world. Over time, and in various places, different

recipes, including milk protein (casein), lime, and pigments were tried,

producing varying results in durability. Many of these coatings also

provided weatherproofing, while others disintegrated, leaving only a

permanent stain on the painted surface. The variations included adding

substances such as olive oil, linseed oil, eggs, animal glue, or waxes.

Over the centuries, better recipes were found that could produce a

durable coating, which could last indefinitely. The colors on the walls

painted at Dendaras, even though exposed to the open air for centuries,

are as vivid today as they must have been 2000 years ago.

RENAISSANCE

The first revolution in the make-up of paint came with the Flemish artists

in the fifteenth century. The Greeks and Romans had some earlier

success with adding olive oil to their paint mixture, but had difficulty with

it drying properly. The first use of a good oil- based paint has been

accredited to the Flemish artist, Jan van Eyck, around 1410. While not the

first to use oil paint, he was believed to be the first to establish a stable

varnish as a pigment binder. His innovations produced an art that set the

standard for a long time to come.

Jan van Eyck's varnish was improved upon later in the fifteenth century

by such Italian masters as Leonardo da Vinci, Tintoretto, and Antonello da

Messina.

In the early seventeenth century, the recipe was improved again by

Rubens while studying in Italy. He used warm walnut oil and also copied

da Messina in using lead oxide in his pigments.

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COMMERCIAL PAINT

Over the next 200 to 300 years, the old water-based milk paint, as well

as the newer oil paint remained relatively unchanged. Artists mixed their

own paints, as did house painters and furniture makers. Recipes for oil

paints were closely guarded secrets. Milk paint continued to be made the

way it had been for thousands of years before.

In Colonial America, as earlier in Europe, itinerant painters roamed the

countryside, carrying pigments with them, which could be mixed with a

farmer's or householder's own milk and lime. Often, the itinerant painter

would be a tinker or farrier, or have some trade in addition to his

knowledge of paint. Practically every household had their own cow or

goat, and each community had its own lime pit. Even though there exist

many examples of early American furniture that was painted with some

form of oil paint, the look associated most widely with the country homes

and furniture of the 17th, 18th, and 19th centuries is that of the soft

velvety, rich colors of milk paint.

This scene doesn't change much until after the Civil War. In 1868, the

first patent was given for the metal paint can with its tightly fitting top.

With this development came the commercial oil paint industry. For the

first time, paint could be manufactured in great mass, packaged in the

new patented cans and shipped to stores throughout the country.

But this kind of operation does not lend itself to the use of milk paint.

Made from natural milk protein, it will spoil just like whole milk.

Therefore, from the very beginning of the commercial oil paint industry,

up until 1935, the only paint sold commercially was oil-based paint, to

which was added lead, mildewcides, and other poisonous additives. Other

types of casein paints were developed that could not be considered milk

paint.

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Casein was mixed with fromaldehyde, or with ammonia, or with borax, to

create much different types of paint recipes. Around 1935, a new water-

based casein(milk protein) paint was developed with the use of synthetic

rubber and styrene. This was called Kem-Tone, the first latex paint, which

met with great commercial success.

THE GREEN REVOLUTION

After World War II, chemists working for major paint manufacturers began

developing new formulas for paints. Along with these developments came

a burgeoning awareness among American consumers that many of these

developments posed a growing health problem. The lead and mercury in

the paint was highly toxic, as were the many solvents (now called VOCs

and HAPs), mildewcides, germicides, and numerous other additives.

The first Earth Day was celebrated in 1970. This date more than any

other established the determination by a consuming public to execute a

change in American products that were harmful to their users. Since that

time, the use of lead and mercury has been outlawed in paint, as have

many of the solvents (VOCs) traditionally used.

The Old Fashioned Milk Paint Company was established in 1974. We

have made every effort to produce a paint that not only gives the look of

Colonial America, with many historic-based colors, but is also completely

biodegradable, with no VOCS, HAPs or EPA-exempt solvents added.

We've found a safe way to reproduce the old look and make a milk paint

the old-fashioned way. Yes, it will spoil, just like whole milk, but its also as

safe as drinking whole milk. (Not that you'd want to, of course.)

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PAINTING – INDIAN HISTORY

Indian paintings historically revolved around the religious deities

and kings. Indian art is a collective term for several different schools of

art that existed in the Indian subcontinent.

The paintings varied from large frescoes of

Ajanta to the intricate Mughal miniature

paintings to the metal embellished works

from the Tanjore school. The paintings from

the Gandhar – Taxila are influenced by the

Persian works in the west. The eastern style

of painting was mostly developed around

the Nalanda school of art. The works are mostly inspired by various

scenes from Indian mythology.

History

The earliest Indian paintings were the rock paintings of prehistoric times,

the petro glyphs as found in places like the Rock Shelters of Bhimbetka,

and some of them are older than 5500 BC. Such works continued and

after several millennia, in the 7th century, carved pillars of Ajanta,

Maharashtra state present a fine example of Indian paintings, and the

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http://en.wikipedia.org/wiki/Nalanda

http://en.wikipedia.org/wiki/Taxila

http://en.wikipedia.org/wiki/Gandhar(city/kingdom)

http://en.wikipedia.org/wiki/Tanjore

http://en.wikipedia.org/wiki/Mughal_painting

http://en.wikipedia.org/wiki/File:Durga_Mahisasuramardini.JPG


colors, mostly various shades of red and orange,

were derived from minerals.

Bhimbetka rock painting

Ajanta Caves in Maharashtra, India are rock-cut cave monuments dating

back to the 2nd century BCE and containing paintings and sculpture

considered to be masterpieces of both Buddhist religious art and

universal pictorial art.

Madhubani painting

Madhubani painting is a style of Indian painting, practiced in the Mithila

region of Bihar state, India. The origins of Madhubani painting are

shrouded in antiquity.style,. Pahari and Rajput miniatures share many

common features.

Rajput painting

Rajput painting, a style of Indian painting, evolved and flourished, during

the 18th century, in the royal courts of Rajputana, India. Each Rajput

kingdom evolved a distinct style, but with certain common features.

Rajput paintings depict a number of themes, events of epics like the

Ramayana and the Mahabharata, Krishna's life, beautiful landscapes, and

humans. Miniatures were the preferred medium of Rajput painting, but

several manuscripts also contain Rajput paintings, and paintings were

even done on the walls of palaces, inner chambers of the forts, havelies,

particularly, the havelis of Shekhawait.

The colors extracted from certain minerals, plant sources, conch shells,

and were even derived by processing precious stones, gold and silver

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http://en.wikipedia.org/wiki/Rajputana


were used. The preparation of desired colors was a

lengthy process, sometimes taking weeks. Brushes used were very fine.

Mughal painting

Mughal painting is a particular style of Indian painting, generally confined

to illustrations on the book and done in miniatures, and which emerged,

developed and took shape during the period of the Mughal Empire 16th -

19th centuries).

Tanjore painting

Tanjore painting is an important form of classical South Indian painting

native to the town of Tanjore in Tamil Nadu. The art form dates back to

the early 9th century, a period dominated by the Chola rulers, who

encouraged art and literature. These paintings are known for their

elegance, rich colors, and attention to detail.

The themes for most of these paintings are Hindu Gods and Goddesses

and scenes from Hindu mythology. In modern times, these paintings have

become a much sought after souvenir during festive occasions in South

India.

The process of making a Tanjore painting involves many stages. The first

stage involves the making of the preliminary sketch of the image on the

base. The base consists of a cloth pasted over a wooden base. Then chalk

powder or zinc oxide is mixed with water-soluble adhesive and applied on

the base. To make the base smoother, a mild abrasive is sometimes

used. After the drawing is made, decoration of the jewellery and the

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http://en.wikipedia.org/wiki/Chola_dynasty

http://en.wikipedia.org/wiki/Tanjore


apparels in the image is done with semi-precious

stones. Laces or threads are also used to decorate the jewellery. On top

of this, the gold foils are pasted. Finally, dyes are used to add colors to

the figures in the paintings.

The history of Indian Paint Industry is as old as the history of the

Indian people. The earliest examples of Indian painting are cave paintings

going back to 10,000 B.C. The tradition of painting in Indian subcontinent

grew and developed over time, resulting in a fully developed and finest

style, incorporating the culture and faith of the region and religion. Indian

paints always embrace rich color and clear symbolism, using specific

iconography to make religious figures clearly recognizable

INDIAN PAINT INDUSTRY

Size of the IndustryToday India has more than 20,000 outlets in operation,

probably the highest for any country.

Geographical

distribution

Mumbai, Ahmedabad, Coimbatore, New Delhi, Surat,

Chennai, Delhi, Jaipur, Bangalore, Kolkata, Karur,

Tirupur, Ludhiana, Bhilwara, Erode, Jodhpur, Rajkot,

Noida, Panipat, Amritsar, Vadodara, Kanpur, Madurai,

Gurgaon, Hyderabad, Navi Mumbai, Tirupur ,Thane,

Shanghai, Pune, Karachi, Faridabad, Indore, Ghaziabad,

Varanasi, Faisalabad, Cochin - Alappuzha.

Output per annum

The high volumes of low cost distempers sold in India,

which amounts to approximately 200,000 tonnes per

annum at an average cost of Rs35 per kg ($0.88) at the

present rate.

Market

capitalization

The market for paints in India is expected to grow at 1.5

times to 2 times GDP growth rate in the next five years

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History of Indian Paint has fascinated culture throughout the years. Color

has been the major attraction for more than 20,000 years. Two

anthropologists conducted a worldwide study of color naming in 1960's.

Many languages only contained two color they are the white (light) and

black (dark).Today after all the research and finding we have numerous

combination colors of : black, white, red, orange, yellow, green, blue,

purple, pink, grey and brown. Paint is generally made up of a pigment.

Paint Companies in India bring to you a wide range of paints,

varnishes, pigments and coatings for the perfect finishes for the home

interior and exteriors décor and beautification. The paint industry in India

has flourished into a full-fledged manufacturing and sale market catering

to the international standards being demanded for the painting jobs.

While choosing paint for your home or office, check if the paint is:

Stain Resistant, Grease and Dirt Resistant, Scrub Resistant, Heat

Resistant and Water-Resistant

The earliest paint factory in India dates back to 1902, when

Shalimar Paints, Colour & Varnish Company, A Pinchin Johnson unit, was

established at Calcutta. Growing industrialization, expansion of the

railways and introduction of electric power a couple of years earlier had

all kept business confidence soaring high. However, this did not provide a

ready and expanding market for the nascent paint industry then. Imports

from Britain continued to swarm the market and raw materials were not

easy to come by. The industry still consisting of one lone unit went

through a rather prolonged period of infancy, till the World War II brought

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in dramatic opportunities. With the stoppage of imports owing to war

conditions, the domestic market at last became almost the exclusive

reserve of the domestic industry. European manufacturers, hitherto

exporting to India, readily saw the advantages of setting up

manufacturing facilities here.

The period between the wars thus saw the greatest ever influx of

foreign paint companies into India- Goodlass Wall (1918), Elphant Oil

Mills (1917) in Bombay, and British Paints, Jenson & Nicholson and

Macfarlances in Calcutta. Macfarlanes was brought over by the Poddars

and became a completely Indian company, while the other three:

Shalimar Paints (Pinchin Johnson), British Paints and Jenson Nicholson

continued as British operated units.

While talking about the post independent development of the Paint

industry in India, mention must be made of Asian Paints, a completely

Indian unit which started on a very small scale, grew so big and so

beyond recognition over the years that it is today not only the largest

unit in India but way ahead of the second largest, Kansai (Goodlass)

Nerolac Paints Ltd., formerly a unit of Goodlass Wall (UK).

Besides Asian Paints, numerous factories, wholly Indian in

ownership and with rare exceptions in technology as well were set up in

Calcutta, Kanpur and Bombay. The British units, though a few in number,

were technically strong and financially sound and, with the active

support and patronage of the Government, controlled a vastly higher

share of the market. The post independence period witnessed a steady

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growth in the paint industry. From a mere Rs.200 million turnover in

1950, the paint industry crossed the Rs.14000 million marks in 1990-91.

But even in this period, paints were considered a luxury item. Only

people with high incomes were expected to decorate their houses with

the use of paints. Paints, as a protective element, were totally unheard

of. The industrial segment, which was traditionally a low user of paints,

vis-à-vis its counterparts in the decorative segment, too contributed to

this notion. In line with this misconceived notion, the government

drastically increased duties on paints in the early nineties with an aim to

bolster exchequer revenues. The result was obvious. This inevitably

brought about a downturn in the fortunes of the industry. The products,

which are highly price elastic, saw a negative growth rate of 20 % in

1991-92. The next year was also not good, registering a growth of only

2%, bringing it back to the 1990-91 level, thus corroborating the fact that

the industry needed lower excise levels to grow.

The industrial slowdown during that period also did not help

matters. In line with the liberalized policies and the realization that paints

are not necessarily a luxury item, duties were progressively reduced from

1993-94.

This squared growth as most companies passed on duty reductions.

Further, the entry of world majors in the automobile and white goods

market in India since 1993 helped the market to expand. Demand for

auto paints shot up suddenly. Form a modest 8% growth rate in 1993-94,

paint demand touched 12% in 1995-96.

Rapid industrialization and improvements in the infrastructure such as

transport, energy and communication during the last decade gave a

further fillip to the growth of the paint industry. Aided by Government’s

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liberal policy of technology import, the automotive and consumer durable

segments expanded phenomenally, with a flurry of foreign collaboration.

Increased demand for decorative, protective and functional coatings was

a natural fall out, which brought, in its stride, a host of indigenous

developments as well as the injection of new technology.

Types of Paints in India

Paint has been used by mankind since its origin. The evidence can be

found in the cave paintings. The Chinese are considered to be the

pioneers of manufacturing paints thousands of years ago. In modern

times paint is made artificially and is used in many different ways. There

are three basic things required to make paint. You need a ·

Pigment to get the exact color you want·

Binder to hold the paint together ·

Thinner so that it can be applied easily.

There are different types of paints available today. Till the 19th

century the word paint was used to describe oil-bound types only. The

paints bound with glue were called distemper. For farmhouses and

cottages an alternative was found and was called lime wash or color

wash.

Different things need different paints. The interior of the house is

painted by different type of paint than the exterior of the house.

Automobiles use different type of paint. The industrial paint is different

than marine paint. Now colors are made by using different ingredients for

specific surFor example enamel paint, when dries it becomes especially

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hard and usually has glossy finish. The term enamel paint today means

hard surfaced paint and usually it is used in reference to paint floor

coatings of a gloss finish or spray paints. It can be used for concrete,

stairs, porches and patios. Fast dry enamel is ideal for refrigerators,

counters and other industrial finishes. High-temp enamel may be used

for engines, brakes and exhaust. Enamel is also used on wood to make it

water resistant.

The types of paints available in the market and their utility are:

Acoustic Paint: It is specially designed for acoustic tiles

Alkyd Resin Paint: Best suitable for trim, doors, faux finishes and other

maximized use areas.

Dripless Paint: This paint is thicker and is most suitable for application

on ceilings Latex Paint: The applicability of this paint is easier than

most other and it dries much quickly. It is also easier to be washed.

One-Coat Paint: It is the more expensive version of the latex and alkyd

paints and is mostly chosen for surfaces that require flawlessness in

color.

Primers: This paint is the initiation for all interior paint works.

Rubber-Base Paint: This is best for concrete and bricks.

Textured Paint: If need is to cover any flawed surface in your house get

this paint. It works well on ceilings

New Trends in Decorative Painting

Besides these home decorating and improvement paints and office paint

you can also get industrial paints, aircraft paint, airplane paint, aviation

paint and many other paint products with the paint shops in India. The

paint companies in India house a wide range of paint products that cater

to all your needs. A whole spectrum of colors with your own textured

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options and application patterns are available with the paint companies.

Each company has its own specialized product and some also offer home

paint services. The cost of a painting job may vary with the paint chosen

- acrylic, emulsion, primer etc., the paint tools being used and the

painting company hired.

World Wide Painting Concept is changed to Decorative Concept and the

Products for Decorative Painting are developed.

Growth of the Industry

There is a phenomenal growth on the housing sector front with rapid

urbanization and availability of easy to secure housing loans which have

become the prime drivers of growth in the decorative paint segment,

which comprises 70% of the $2 billion Indian Paint industry. An average

increase of growth of about 10% in the automobile sector contributes to

50% of the revenues in the industrial paints segment. Paints can be

classified as Decorative Paints & Industrial Paints.

Decorative Paints are usually meant for the housing sector. Distemper is

mostly affordable by all and used in the suburban and rural markets.

Interestingly, 20% of all decorative paints in India are distempers. Indian

Paint products are highly in demand in countries of United States, China,

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India, United Kingdom, Australia, Pakistan, Hong Kong, Canada, etc

forming the turning points in the Paint Industry of India. The paint

products are being governed by FERA (Foreign Exchange Regulations

Act) and MRTP (Monopolies & Restrictive Trade Practices Act), Indian

companies were restricted from enhancing their production capacity.

Due to liberalization there shackles were taken off and the industry

expanded. Today manufacturers in India hardly face any threat from the

foreign players. Most of them have deals with global players in terms of

latest technology and markets accessibility.

Prominent Destinations to source Indian Paint Products

Mumbai, Ahmedabad, Coimbatore, New Delhi, Surat, Chennai,

Delhi, Jaipur, Bangalore, Kolkata, Karur, Tirupur, Ludhiana,

Bhilwara, Erode, Jodhpur, Rajkot, Noida, Panipat, Amritsar,

Vadodara, Kanpur, Madurai, Gurgaon, Hyderabad, Navi Mumbai,

Tiruppur ,Thane, Shanghai, Pune, Karachi, , Faridabad, Indore,

Ghaziabad, Varanasi, Faisalabad, Cochin-Alappuzha.

The Indian paint market in many ways is different from other markets. It

has been unique market when compared to the other markets in the

world. India has over more than 50000 paint shops or outlets. Indian

paint company’s distribution policy directly cater to more than 25,000

shops and is unlike other industries where companies operate through

distributors. Each Paint company has a large number of depots to service

these outlets and a large sales force for this purpose.

Size Of the Industry

A large number of Paint outlet or shops have automated/manual dealer

tinting systems. Today India has more than 20,000 outlets in operation,

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probably the highest for any country. There are only approximately 7,000

tinting systems in China for a market two and half times of India's size.

30% to the paint industry revenue in India is accumulated from Industrial

Paints. The size of the Paint Indian industry is around 940 million litres

and is valued at approximately $2 billion. The organized sector comprises

54% of the total volume and 65% of the value.In the last ten years, the

Indian Paint Industry has grown at a compounded annual growth rate

(CAGR) of 12-13%.

Total contribution to the economy/ sales

The market for paints in India is expected to grow at 1.5 times to 2 times

GDP growth rate in the next five years. With GDP growth expected to be

over and above 7% levels, the top three players are likely to clock above

industry growth rates. There are high volumes of low cost distempers

sold in India, which amounts to approximately 200,000 tons per annum

at an average cost of Rs35 per kg ($0.88) at the present rate.

Employment opportunities

The employment potential in this industry is huge. Job prospects are

many for the one who is professionally qualified in Paint Technology. One

will find employment in large paint manufacturing companies like Asian

Paints India Limited, Shalimar Paints, Jenson and Nicholson, Berger Paints

India Limited, Nerolac Paints Limited, etc.

One may also be posted in the technical service department as a

Technical Assistant or Technical Executive. In this capacity, one will have

to visit the site when required.

Moreover, one can also work in the research and development

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department, if one has an M. Tech. Degree under one's belt.

Production of Paints & Varnishes

Feb ’09 Feb ’10

Apr-Feb

’09-10

Apr-Feb ’10-

11

In Tonnes 63,526 86,200 753,289 943,324

% of growth -4.7 35.7 -0.4 25.2

Source:CSO

Besides, one will also find employment as a Supervisor in the application

unit of an auto industry. There is huge demand for Paint Technologists in

companies which are into the manufacture of home furnishings like

almirahs, refrigerators, etc. One will be able to find employment in such

home furnishing industries.

Latest developments

Indian Paint Industry today is about Rs 49 billion sector which has

demands for paints which is relatively price-elastic but is linked to

the industrial and economical growth.

Indian per capita consumption of paints is at 0.5 kg per annum if

compared with 4 kgs in the South East Asian nations and 22 kgs in

developed countries.

Organized sector in India controls 70% of the total market with the

remaining 30% being in the hands of nearly 2000 small-scale units.

In India 30% accounts for the industrial paint segment in paint

Industry while the decorative paint segment accounts for 70 % of

paints sold in India.

Globally, Indian Industrial Paints segment accounts for a major share

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which indicates that this segment offers many opportunities for paint

manufacturers. In June 2009 with a recovery in realty sector, the

production volumes in the sector have substantially recovered. In the

year 2009-2010 the Production of paints grew by a robust 25.2% during

as compared to a 40 basis points drop in production in the corresponding

year-ago period.

As the production of passenger cars is expected to grow by 15.3% in

2010-11 the demand for automotive paints will continue to remain

healthy as sales are expected to grow in double-digits. And with realty

majors launching new projects, construction activity is expected to gain

momentum and generate demand for decorative paints. Rise in demand

is expected to be supported by higher supply as the industry is expected

to commission additional capacity in 2010-11.

Highlights

The Indian paint industry is Rs. 49 billion sector.

The demand for paints is relatively price-elastic but is linked to the

industrial and economical growth.

The per capita consumption of paints in India is very low at 0.5 kg per

annum if compared with 4 kgs in the South East Asian nations and 22 kgs

in developed countries. The global average per capita consumption is 15

kg.

In India the organized sector controls 70 percent of the total market with

the remaining 30 percent being in the hands of nearly 2000 small-scale

units.

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In India the industrial paint segment accounts for 30 percent of the paint

market while the decorative paint segment accounts for 70 per cent of

paints sold in India.

Most of the paint leaders have technical tie-ups with global paint leaders.

Boom in Indian Housing Sector: Increasing urbanization, cheaper housing

loans and a shift from semi-permanent to permanent housing structures

have been driving growth in decorative paints segment, which

constitutes 70% of the $2 billion paint industry in India

Strong Industrial growth: An average growth of about 10% in the in

automobile sector which provides 50% of the revenues in the industrial

paints segment.

Industrial paints account for 30% of the paint industry revenue in India.

Heavy Infrastructure Spending: New projects in roads, ports and

industrial segments increases revenues from protective coatings for civil

applications and road-marking paints to all parts of the building paints

sector, whether interior, exterior, waterproofing or floor coatings.

Over the next few years, the ratio of industrial paints to decorative paints

are expected to be 50:50, more in line with the global trend. Currently it

is 30:70.

With the decorative segment bottoming out, companies are increasingly

focusing on industrial paints

Demand for paints from new housing is expected to constitute

approximately 30 percent of total demand; the rest comes in from

repainting, mainly after themonsoon rains and before the festive season.

Sector trends

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The recession in the construction and automobile

sector had thrown in shades of grey across the Industry spectrum, but

the revival in these sectors is cause for cheer for the paint industry as

well. The balance sheets of the industry majors are now painted with

bright colours.

The market can be further split into decorative paints and industrial

paints. The demand for decorative paints is highly price-sensitive and

also cyclical. Monsoon is a slack season while the peak business period is

Diwali festival time, when most people repaint their houses. The

industrial paints segment, on the other hand, is a high volume-low

margin business. In the decorative segment, it is the distribution network

that counts while in the industrial segment the deciding factor are

technological superiority and tie-up with automobile manufacturers for

assured business.

The share of industrial paints in the total paint consumption of the nation

is very low compared to global standards. It accounts for 30 per cent of

the paint market with 70 per cent of paints sold in India for decorative

purposes. In most developed countries, the ratio of decorative paints vis-

Ã -vis industrial paints is around 50:50. But, with the decorative segment

bottoming out, companies are increasingly focusing on industrial paints.

The future for industrial paints is bright. In the next few years, its share

would go up to 50 per cent, in line with the global trend.

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The Indian Paint Industry

In India, Indian Paint industry’s total market size is US$1400 million. The

organized sector of the industry is 55%. The 45% unorganized sector has

about 2500 units.

Organized Sector55%

Unorganized Sector45%

The Indian Paint Industry

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The big players and their market share-value of the

organized sector are:

Asian Paints 37% Goodlass Nerolac 15.9% Berger Paints 13.8% ICI 11%

Jenson & Nicholson 5.7% Shalimar 4% Others 12% ( Including Jotun).

The overall organized sector market share is shown in the following graph. Asian Paints leads with a market share of 37 per cent; Goodlass Nerolac has 16 per cent while Berger Paints has 14 per cent share.

ASIAN PAINTS36%

NEROLAC PAINTS16%

BERGER PAINTS

14%

ICI14%

JENSON & NICOLSON

6%

SHLIMAR4% OTHERS

12%

Market Share of Organized Sector

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The market segment is divided into two sectors.·

Architectural 70%· Industrial 30%

The total volume of the market is 600,000 MT.

The leader in the high volume medium and mass segments of decorative

paints, Asian Paints has been consolidating its market leadership over the

last six years and now has the biggest slice of 37per cent of the market

for decorative paints in the organized sector as shown in on the next

page.Trailing behind are Goodlass Nerolac and Berger Paints with market

shares of 13 per cent and 11 per cent respectively. Other major players

from the organized sector includeJenson&Nicholsonwith a low 6 per cent

and ICI with 8 per cent. With the exception

ofAsianPaints,themarketshares of most of the major players have been

stagnating over the lastfewyears.Thiswasprimarily due to extensive focus

on urban markets and neglecting the high-potential semi-urban and rural

markets.

On the other hand, one of the earliest entrants to take a lead,

Goodlass Nerolac

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dominates the market for industrial paints with an impressive share of 43

per cent of the market as shown in the following graph. Though other

players trail behind Goodlass Nerolac by a wide margin, competition in

industrial paints is increasing. While Asian Paints and Berger have a

market share of 14 per cent each, ICI’s share is lower at 8 per cent.

Top leading Companies

Asian Paints India

Nerolac India Paints

Berger

Dulux India Paints

Shalimar Paints

I. ASIAN PAINTS:-

Asian Paints is India's largest paint company and the third largest paint

company in Asia today, with a turnover of Rs 30.2 billion (around USD

680 million). The company has an enviable reputation in the corporate

world for professionalism, fast track growth, and building shareholder

equity. Asian Paints operates in 21 countries and has 29 paint

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manufacturing facilities in the world servicing consumers in over 65

countries.

Asian Paints is a great marketing success in a branded consumer

product business. The company Succeeded where others failed in three

areas:

First, it understood the requirements of the Indian paints market

better than the MNCs which did not bother to respond to local consumer

needs. It was the first to introduce small pack sizes, a variety of shades

and a wide range of paint types (enamels, distempers, emulsions) to suit

different pockets.

Thus, in the sixties, the company came out with plaster distemper,

Tractor, to suit the needs of the mass market for a product that was

much cheaper than costly emulsions but much better than the widely

used whitewash and crude powder distempers. This opened up a huge

market and today distemper accounts for 25% of the decoratives market

in volumes and 15% in value. And as recently as in 1992, the company

introduced a synthetic distemper, branded Utsav, aimed at the same

rural and low income urban markets.

Secondly, in the highly competitive market emulsions segment, the

company introduced as many as 151 shades in its Apcolite range when

the competition was offering a maximum of 40 odd shades. The strategy

paid off and Asian Paints today commands a 40% share in this segment.

It set up an extensive national distribution network to tap demand in

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smaller towns. Today it has direct dealers in 3,200 towns and 10,000

stockiest. Investments were also made in computer technology to ensure

up-to-date information interface between the marketing and production

sides of the business .And finally, the company has displayed

considerable savvy in its advertising campaigns, dealer relations, point of

sale publicity and product demonstrations to consolidate and expand

markets. In fact, the company has played a pioneering role in expanding

the Indian paints market by identifying high demand potential areas and

then tapping them to maximum effect.This ratio is defined as profit after

tax divided by the shareholders fund. It measures the profitability of the

funds invested in the firm. It is regarded as a very important measure

because it reflects the productivity of the risk capital employed in the

firm.

2. KANSAI NEROLAC (GOODLASS NEROLAC)

It was established in 1920 as Gahagan Paints and Varnish Co. Ltd. at

Bombay. In 1930,

three British companies merged to formulate Lead Industries Group Ltd.

In 1933, Lead Industries Group Ltd. acquired entire share capital of

Gahagan Paints in 1933 and thus, Goodlass Wall (India) Ltd. was

born.Subsequently, by 1946, Goodlass Wall (India) Ltd. was known as

Goodlass Wall Pvt. Ltd. In 1957, Goodlass Wall Pvt. Ltd. grew popular as

Goodlass Nerolac Paints (Pvt.) Ltd. Also, it went public in the same year

and established itself as Goodlass Nerolac Paints Ltd.

It is among the oldest paint companies of the country and the undisputed

market leader in industrial paints, with a 43% share of this segment. It is

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a dominant player in the auto paints market which accounts for around

one-third of the industrial paints segment. Goodlass Nerolac paints’

strength comes from the higher end of the auto paints market -

passenger cars and light commercial vehicles (LCVs) account for 60% of

the company’s auto paint sales. The rest comes from heavy trucks and

two wheelers.

n auto paints, the market share of Goodlass is now estimated to be

around 50% with a 90% share in passenger cars, 60% in LCVs, 40% in

two wheelers and heavy trucks. Right now, the company is the only

significant producer of CED (cathodic electro-deposition) primer, with

technical know-how from its Japanese promoters, Kansai Paints. Goodlass

is the only company offering a complete automotive paint system

comprising pre-treatment chemicals, primers, anti-rust

coatings,intermediate and top coatings as well as auto refinishes. GNPL

supplies 90% of the requirements of Maruti Udyog Ltd., which produces

300 cars a day.

The company has a tie-up with Nihon Toshuku Tokyo of Japan for

sophisticated coatings for

automotive and industrial sectors. Having lost Daewoo’s Cielo contract to

Asian Paints, GNPL is pursuing business opportunities with car majors

planning to enter the country. It recently tied-up with Dupont, USA for

supplying automotive paints to DuPont’s clients in India

Goodlass Nerolac Paints Ltd. Changed its name to Kansai Nerolac Paints

Ltd. in 2006. The present human asset consists of over 2000

professionals and a sales turnover of 1226 crores. It is the second largest

coating company in India with a market share of over 20% and also the

leader in powder coatings.

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3. BERGER PAINTS:-

Berger Paints is the culmination of over seven-decade process of

evolution and growth that began in 1923. Its growth has been closely

linked with the business and industrial development of modern India.

The performance of this company is anchored today in a wide variety of

Decorative and Industrial paints which continue to gain an increasing

share of the highly competitive Indian paint market. Being an ISO 9001

company its quality products have attained instant and worldwide

recognition, and continues to meet quality requirements that are

demanded today even in the domestic market. The Country's third

largest paint manufacturer,with its Headquarters in Calcutta, Berger

controls a distribution network comprising of 66 stock points and

approximately10,000dealers, spread across the country.

BPIL has technical tie-ups with Herberts, a subsidiary of the German

pharmaceutical major

Hoechst for automotive paints, Tendor NV of Holland for powder coatings

and Valspar

Corporation, USA for heavy duty coatings.

The company is particularly active in the powder coating segment and is

a supplier to most OEMs in the white good segment. With its thrust

shifting to industrial coatings, the company is

expandingitspowdercoatingcapacityfrom840metrictonsto 1,840 metric

tons at its existing plant.

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Recently, it introduced Color Bank, a computerized mixer tinting machine

in technical collaboration with Ital Tinto of Italy. Special software,

Tintovision installed in the Color Bank gives the customers a choice of

more than 5,000 shades and can even produce the colors offered by the

company’s competitors. Another achievement of Berger is the setting up

of Berger Prolinks. Prolinks is Berger Paints' response to a market

environment that is increasingly driven by technology and calibrated by

expertise. Prolinks is aimed at placing

the initiative in the hands of builders, architects and designers to enable

them to directly source innovative products and services. The team is

entrusted with maintaining a seamless interface between paint specifiers

and products and processes - databases, technical services, color

consultancy, site inspection, etc. Prolinks experts ensure specific

solutions to specific problems, whether it is a particular shade that needs

development, special climatic factors to be provided for, or application

factors that have to be maintained.

4. ICI INDIA

ICI India was the subsidiary of the $15bn British multinational company

ICI Plc. Brunner Mond & Co., one of the four Companies that combined to

form ICI in UK in 1926, opened a trading office to sell alkalis and dyes in

Calcutta. In 1923, Brunner Mond & Co. (India) was incorporated and the

company's name was subsequently changed to Imperial Chemical

Industries (India) Ltd., in 1929.

ICI (India) is ranked fourth in the paint business, after

Asian Paints, Goodlass Nerolac -17-Paints and Berger Paints. Unlike the

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other paint companies, ICI (India) was a diversified unit and paint

constituted 43% of its net sales. It identified paints as a thrust area and

was aggressively moving to improve its position.

The company invested $11 million in a new decorative

paints plant near Bombay and constructed a $16.7 million plant for

industrial paints near Chandigarh in North India. In order to increase its

presence in the paints market, ICI’s growth plan is to beef up its

distribution network, widen the purview of specialty products, access

newer technologies through joint ventures and of course, targetting the

urban and semi-urban markets by introducing more products in the lower

and middle segment of the paints market. ICI launched Color Solutions

which can be used for both exteriors and interiors.

This comprises a menu driven, user friendly touch color

screen on a computer that helps consumers visualize as many as 6,000

shades on house structures resembling their homes.

5. JENSON AND NICHOLSON:-

Jenson & Nicholson, a leading paint company in the country today was

established in the year 1922. It has a country wide presence with 33

branches and stock points across the country and manufacturing plants

at Naihati (near Kolkata), Sikandrabad (near Delhi) and Panvel (near

Mumbai). In 1955, it launched India’s first Plastic Emulsion paint, under

the brand name of Robbialac.

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It ventured into the Powder coatings market in 1986, thus

becoming the first company in the organized sector to offer this

extremely environment friendly coating technology. Subsequently, it

introduced Instacolor, in technical collaboration with M/s Tikkurilla OY of

Finland. It is the first company in the country to introduce computerized

dispensing system.Jenson and Nicholson launched the Standox brand of

products in 1996 which offers over 45,000 colours to the Indian car

owner. In the very next year, he company in order to cater to highly

specialized Marine paints sector, entered into a 50:50 joint venture

project with M/s Chugoku Marine paints of Japan.Chugoku is the second

largest supplier of marine paints in the world with 30% market share. The

new company also handles heavy duty coatings.

New Competitor in the Market

Jotun Paints to expand retail network in India

Norwegian paint manufacturer Jotun Paints is planning to strengthen its

retail network in the country by doubling its retail chains from the current

130 through the franchise model. The expansion will happen on a pan-

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India basis by the end of next year. The proposed

expansion plan would require around Rs 25 crore of investment.

Meanwhile, the paint manufacturer is expected to close the current

calendar year with a turnover of Rs 200 crore and is set to double in the

next two years. One of the main focus markets for Jotun Paints is the

decorative market, which at present is dominated by brands including

Asian Paints, Berger, Kansai Nerolac and ICI.

The company inaugurated its first manufacturing facility in April 2008 at

Ranjangon in Pune with an investment of Rs 110 crore. The total capacity

of the plant is 50 million litres of paint and 10,000 tonnes of powder.

In the next 4-5 years the plant will run on full capacity, and by that time

the company will set up a manufacturing unit in North India.

The manufacturing unit in Pune mainly caters to Kerala, Karnataka, Tamil

Nadu and Maharashtra and will move to the northern markets such as

Gujarat, Delhi and Haryana subsequently. The company has provided for

expansion at the present location and may double the present installed

capacity, if necessary, he added.

Production from the Ranjangon unit will serve the needs of the domestic

market, and will be retailed through exclusive Jotun brand shops. The

company, which already has a presence in the country with 130 retail

outlets, is increasing this number to 300 by next year.

The new outlets will be developed through the franchise model,

wherein the the franchise will invest in the shops. The minimum

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investment would be Rs 15 lakh for setting up

a 300 square feet shop.

Unlike Indian paint companies, Jotun is not entirely driven by dealers on

the marketing front. Rather, it has a shop-in-shop concept through which

it sells paints. Stating that India is an important market. Jotun focused on

the Market.

Their Calculation is that: the huge potential in a market that is growing at

15 per cent annually." Segments such as decorative paints and marine

and industrial coatings are expected to be growth drivers.

The expected turnover from the Indian operation is around Rs 200 crore

for the current calendar year . The company has set a target of Rs 400

crore and hopes to achieve 8 per cent market share by 2011.They have

more than 40 manufacturing facilities worldwide.

Jotun Paints plans 80 stores in Kerala

Jotun Paints is planning to set up 80 retail stores in Kerala by 2011 to

strengthen its retail footprint in the state.

Kerala decorative paint market was estimated at Rs 600 crore and

offered opportunities to expand production as well as distribution. “At

present, we have 55 retail outlets in Kerala and will significantly add to

that number over the next few months,” he addedThe group also

announced the launch of ‘ColourAdvisor’ software – an online colour

visualisation tool – in the Kerala market. ColourAdvisor enables the

customer to virtually paint his own dream house with the colours of his

choice, before making a purchase decision. The software is available

through a single registration at www.colouradvisor.com.

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http://www.colouradvisor.com/


The Jotun admitted that “The paint sector in

Kerala offers huge potential. Decorative paint market in the state is

estimated to be Rs. 600 crore, out of which North Kerala is estimated to

be Rs. 200 crore. Our strategy for this market is to open exclusive retail

outlets supported by localized marketing activities,"

Recent Other Development in the Paint Industry In India

Thailand paint group mulls plant in Chennai - Sep 24, 2010

Berger Paints to set up plant in Andhra Pradesh - Sep 24, 2010

Berger Paints plans new plant in south India - Aug 07, 2009

Berger Paints unit probed for groundwater pollution - Jul 19, 2010

Karnataka woos auto, drug firms - Jan 30, 2010

Nippon Paint plans Rs.3.5-billion investment in Gurgaon - Mar 05, 2008

Scope

The Indian paint industry has come a long way from the days when

paints were considered a luxury item. Today the awareness level on

preventing corrosion through paints is relatively high, a development

That should be a huge boost to the paint industry.

This report provides in-depth information and analysis on the US$ 925.0

million (2000-01) worth Indian paint industry. The Indian paints industry

offers lucrative scope for stable revenue streams to manufacturers of

both decorative and industrial paints. The report stays focused on all

such crucial parameters that make India a favourable proposition. Factors

that have been given emphasis include the low per capita consumption of

paints (1.0 kilogram), growth in construction sector (it is being offered

industry status) and growth in the auto/white goods market respectively

spurring demand for decorative and industrial paints.

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http://www.thaindian.com/newsportal/business/nippon-paint-plans-rs35-billion-investment-in-gurgaon_10024400.html

http://www.thaindian.com/newsportal/business/karnataka-woos-auto-drug-firms_100312157.html

http://www.thaindian.com/newsportal/business/berger-paints-unit-probed-for-groundwater-pollution_100398140.html

http://www.thaindian.com/newsportal/business/berger-paints-plans-new-plant-in-south-india_100229098.html

http://www.thaindian.com/newsportal/business/berger-paints-to-set-up-plant-in-andhra-pradesh_100434182.html

http://www.thaindian.com/newsportal/business/thailand-paint-group-mulls-plant-in-chennai_100434070.html


The industry has also witnessed increased

activity in the industrial variety of paints with the entry of MNCs in auto,

consumer durables etc, which has been The report covers both the

segments of decorative and industrial varieties of paints along with

elaboration on product sub-segments within these two product segments.

The typical characteristics of the Indian paints industry have been

discussed in depth covering the typical features of the Indian industry

viz., raw material intensiveness, working capital intensiveness,

seasonality of The current global scenario with reference to the paint

industry has been covered in the

report with special focus on auto-coats market, which is a key growth

area in the International market.The current scenario prevailing in the

Indian paint industry has been pictured in detail. The share of the

organized and unorganized sector has been dealt with in detail,

discussing the impact of recent issues and trends (like excise duty

rationalizations, quality consciousness in user segments) on the industry

dynamics. The demand-supply scenario existing in the industry has been

covered, detailing paint production trends in India, consumption across

user segments, the trends in the exports and imports front and factors

influencing pricing.

Raw material is a major cost-driver in the paint industry, and thus the

report provides comprehensive coverage on duty structure applicable for

raw materials, The organized sector has been given an in-depth focus

detailing major players, their forte, market shares of majors across

product mixes and price categories.

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THE POTENTIAL

Growth Drivers of Indian paint Industry

Per capita consumption at 1.5kg is way below the developed

(20kgs) aswell as the developing market standards. Usage of lime

extracts (chuna)in ruraland semi

urban markets as well as lesser awareness of theprotective attributes of

paints can be one of the reasons for lower consumption levels.With

growing income levels, both in urban as well as rural India on theback of

various government initiatives like NREGS, Farm loan waivers,pay

commission led salary hikes etc, we expect the per capitaconsumption to

improve in the medium as well as long term.

Rising income levels: According to McKinsey, proportion of low

income groups is expected todecline from 24% in FY05 to 10% in FY10e.

This will act as a significant catalystfor demand growth in decorative

paints.

Increasing media exposure: With better awareness levels, we

expect a gradual shift from unbranded to branded segment as well as

improvement in product mix for players like

Asian Paints as demand for emulsions continues to outpace enamels and

distempers.

Rising urbanisation: This will lead to creation of new homes, in

turn, fuelling incremental demand. Currently, only 28% of Indian

population is urban

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Indian housing sectors boom, increasing

urbanization had made easy availability of housing loans and a shift from

semi-permanent to permanent housing structures have been driving

growth in the decorative paints segment accounting for nearly 65-70% of

the Indian paint industry.

Seasons: are also involved in the demand for decorative paints, where

consumption peaks around festive time.

Increase in nuclear families: This is a consequence of younger

demographics (60% of India’s population is below 30 years of age), with

proportion of working population expected to increase from 40% in FY05

to 48% in FY15e.

Healthy growth in consumption levels expected for both, urban and rural India.

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G rowth in Auto Sector

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With production of passenger cars expected to

grow, demand for automotive paints will continue to remain healthy as

sales are expected to grow in double digits. And with realty majors

launching new projects, construction activity is expected to gain

momentum and generate demand for decorative paints. Globally, the

industrial paints segment accounts for a major share, indicating that this

segment offers many opportunities for paint manufacturers.

T he emerging trends in the decorative industry are:

Consumers are increasingly involved in making purchase

decisions.

Consumers expect better and more relevant functional

benefits from paints.

Emulsion paints are outgrowing the industry growth rate.

Trend of dark shades complementing light shades

continues.

Tinting systems at store level are the order of the day.

Companies are getting more consumers

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Centric and a lot of value added

services are being offered, like application support, colour

consultancy etc

Government rules and regulations

Govt take steps to resolve paint industry crisis December 11, 2008 (India)

Government has announced several relief measures to support the paint

industry from time to time, which has been representing that paint

exports have been affected by the global recession. Steps taken by

Government to help and improve paint industry include the following:

(1)The Technology Up gradation Fund Scheme (TUFS) was launched to

facilitate the

modernization and up gradation of the paint industry both in the

organized and unorganized sector.The Scheme has been further fine

tuned to promote the rapid investments in the targeted sub-sectors of

the paint industry. The cost of machinery has been further brought down

by reducing the customs duty on imports.

(2) To provide the paint industry with world-class facilities for setting up

their paints units,

meeting international environmental and social standards, a Public-

Private Partnership (PPP) based Scheme known as the “Scheme for

Integrated paint (SIP)” has been introduced in August 2005.

(3) In 2004-05 Budget, the entire paint sector, except for man-made and

filament yarn was

provided optional exemption from excise duty. In 2005-06 Budget,

Central Value-added Tax

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(CENVAT) on Polyester Filament Yarn has been reduced from 24% to

16%. These modifications in fiscal levies aim at attracting more

investments for modernization of textile sector.

(4) To facilitate import of state of the art machinery to make our products

internationally

competitive in post quota regime, in 2005-06 Budget, the customs duty

paint machinery has been brought down to 10% except for 23 machinery

appearing in List 49, which attracts Basic Customs Duty (BCD) of 15%.

The concessional duty of 5% continues to be at 5% on most of the

machinery items.

(5) Government has launched the Debt Restructuring Scheme w.e.f.

Sept., 2003 with the principal objective to permit banks to lend to the

paint sector at 8-9% rate of interest.

(6) Government has allowed 100% Foreign Direct Investment in the paint

sector under automatic route

(7) Government has de-reserved the readymade garments, hosiery and

knitwear from SSI sector so that large-scale investments may be

encouraged in these sectors.

(8) National Institute of Fashion Technology (NIFT) has been set up to

provide the leadership role in sensitizing the Industry to the concept of

value addition by inducting trained professionals to manage the industry.

This has resulted in an increased demand for trained professionals in

various sectors servicing the industry.

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(9) A series of relief measures to paint exporters such as enhanced DEPB

& Duty drawback rates, reduced ECGC premium, subvention on credit

rates, refund of service tax paid by exporters on various services etc.;

(10) Apparel Export Promotion Council (AEPC) has established Apparel

Training Design Centres (ATDCs) throughout the country to cope with the

requirement of skilled / semi-skilled manpower for the paint industry.

Industry present & future Trends:-

The Indian paint and coatings industry is riding high on the growth

in the Indian automobile industry, new construction in the housing

segment and improving infrastructure throughout the country. Thirty

percent of the paint business is comprised of new construction projects.

GDP growth projections of six to 6.5% in the current year mean a growth

of nine to ten percent in Indian paint business.

The growth will be 12-13% in the industrial segment and eight to

nine percent for decorative paint. The Indian automobile industry has

been performing remarkably well and will benefit the market leader in

the segment, Goodlass Nerolac.

As for the future, the industry has predicted a CAGR of eight to nine

percent for the next five years compared to last year’s growth levels of

27.4% for cars and 8.9% for two wheelers. The Indian housing industry is

likely to do well in the current year as well, recording a growth rate of

35%last year. As a result of the overall health of India’s economy, it is

safe to predict a nine to ten percent growth rate for the Indian paint

industry in the next five years. Consumers can look forward to new

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product launches, some for application in special

areas. Companies will be increasing the value added services available to

customers by offering a variety of finishes through specialized and

trained applicators. There will be more options like ranges of

colors/finishes for wood applications through the tinting machines.

Additionally; the trend towards water-based coatings is likely to set in

both for industrial and decorative applications. While India has not yet

embraced the DIY concept as cheap labor is still available, exclusive retail

chain stores sponsored and run by Indian paint companies will become a

reality.

The Indian paint industry has progressed well and moving ahead is likely

to be influenced by

several factors including new technologies, new innovative products, new

associations,

consolidation of industry and poor performers getting out of the market.

Ultimately, in the years ahead there will be only four or five key players

operating in the Indian paint market.

IN KERALA

Kerala has emerged as the number one market for exterior emulsion

paint companies like Asian Paints, Nerolac, Dulux and Jotun. Market

leader Asian Paints, for instance, is estimated to get around Rs 400 crore

worth of business from this state alone .Kerala contributes to about 8-10

per cent of the company's top line..

For Nerolac Paints, too, the Kerala market is important, since consumers

there prefer an array of colours. “The use of vibrant and more

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pronounced colours is very popular in the south and

so, test marketing for any new colour becomes almost imperative in this

state.The decorative paints market in Kerala alone is about Rs 850 core

and growing at 40 per cent a year, the highest in India. The exterior

emulsion market here is most competitive.Asian Paints has just 40-45 per

cent market share, as compared to a 60-70 per cent share in every other

state.

“The acceptance in the Kerala market is very high. With all the money

coming in from the Middle East as well, there is more spending power

with people in the region. Emulsion companies are also witnessing a new

trend, which is the customization of paints for roof tiles, designed

especially for the Kerala market.

“The houses in Kerala have slanting roofs due to the excessive

monsoons. So, roof tiles are a huge business. Analysts believe this

phenomenon will continue for a long time. “A number of factors

contribute to the Kerala success story. Test marketing for paint

companies in this state is a smart move, as weather and acceptability are

both tested to their highest here,” explains a senior analystThe catchy

and colourful exterior emulsion manufacturing companies, including

Asian Paints, Nerolac, Dulux and Jatun have made Kerala a bursting paint

business hub of about Rs. 900 core.

The market is still growing at a rocketing rate of about 40 per cent

per annum. The leader in the paint market segment, the Asian Paints

alone is boasting of a brisk business of about Rs. 400 crore from the state

alone. According to available statistics, the next in the line is Nerolac

Paints giving an array of colors to homes in the state as the use of vibrant

and more pronounced paints is very popular in all of the south Indian

states. Kerala is currently contributing about 5 to 10 per cent of the

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company's top lines exterior emulsions. Moreover,

the test marketing for any new brand of colors is almost imperative in

Kerala and adjoining states.

Asian Pants, which controls 40 to 45 per cent market share in the

state, is approximately enjoying a lion’s share in every other Indian state.

This is so because the acceptance in the south Indian market is very high,

with all the money coming from the Middle East as well as there is more

spending power of the people in the region, commented a paint market

watcher.

An official of the Jotun paint claimed that the Company currently enjoys

about 4 per cent of the market share in Kerala and hopes to capture

about 7 per cent share in the next couple of years. Emulsion companies

are also witnessing a new trend, which is the customization of Paints for

roof tiles, designed especially for the Kerala market. Since, houses in the

state have slanting roofs due to the excessive monsoon, therefore, the

roof tiles is a huge business.

THE number of small-scale units in the State had considerably

increased in the last few years particularly due to the high per-capita

consumption of paints in Kerala, which is four times ahead of the national

average. According to the study of Indian Small Scale Paint Association,

Kerala Region, by resolving the intrinsic problems faced by the paint

sector, the scope for expansion of the sector can be fully realized. The

national average was about 0.25 kgs whereas the per-capita

consumption in Kerala was 1 kg. At present, there were about 150 units

in the State providing employment to 2500 people. Out of the total

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market share of Rs. 275 crores, the contribution

from the organised sector was Rs. 200 crores (73 per cent) while the

share of SSI sector was up to Rs. 75 crores (27 per cent). From the large

number of new entrants into the field every year, it should be presumed

that the small-scale sector was willing to face the unfriendly labour

situation and other negative factors in the State

Though major paint companies in the country command good

market in Kerala, none of these companies had ventured to start a large-

scale paint manufacturing unit due to various adverse conditions. Some

of the factors which failed to attract big industries in the State were

unfriendly labour situation, high cost of labour, difficult power situation,

lack of availability of low cost industrial land and shortage of adequate

infrastructural facilities.

There was no indication that the situation regarding the big

industry would change in the near future, he added. The two main

problems affecting the growth of small industries were increased

competition and lack of adequate financial resources. Finance continued

to be a major problem for the SSI sector as most of the banks proceed

very cautiously to provide financial assistance to this sector. The reason

often cited was that this sector accounted for most of the non-performing

assets of the banks. It is true that in terms of the number of units, SSI

sector accounted for almost 99 per cent of the accounts that have

resulted in the formation of NPA. But in value terms, the major portion of

these non-performing assets comes from non SSI units. A recent report of

the Reserve Bank of India showed that the contribution of SSI sector to

the NPA was only 26 per cent accounting for about Rs. 3600 crores. This

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outstanding was from 2,37,000 units making the per

unit outstanding to Rs. 1.50 lakhs. The average outstanding from the

non-SSI units on the other hand is Rs. 4.40 crores. A much more active

role could be played by the State Government to enable the small units

to withstand the severe competition faced by the industry. The decision

of the State Government to increase sales tax on SSI products from 6 per

cent to 8 per cent was the biggest blow to paint manufacturers in the SSI

sector in the State, according to the Association.

With the introduction of new sales tax reforms in the country, the

big units obtained a net advantage of 3.15 per cent over the SSI units in

the State. Because of this, the SSI units had been compelled to reduce

prices by at least 3.15 per cent to retain the existing market share. To

make the products manufactured in the SSI paint units competitive, the

Association requested the Government to bring down the sales tax to 4 p

er cent on paints. The opening up of the Indian economy had also made

the small units more vulnerable. The competition had become so severe

threatening the very existence of many small units. Prior to liberalisation,

fiscal support both from the Union Government and State helped the

small-scale sector in a big way.

Concessions in the central excise duty and central subsidy for

investment were the notable incentives from the Government which had

helped the SSI sector to offset the disadvantage they had in cost of

inputs. With the dismantling of trade barriers world wide and due to

liberalisation process, the situation had changed drastically, he said. The

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measures such as reduction in excise duties and

inputs had helped big units to reduce their cost substantially and im

prove their profitability. The fact that major companies had grabbed

substantial business from the SSI sector was evident from the cumulative

growth achieved by the organised sector in the last 6 years. Asian Paints,

the market leader increased its turnover from Rs. 465 crores in 1992-93

to Rs. 1,120 crores in 1998-99, clocking a cumulative growth of 140 per

cent. Goodlass Nerolac Paints, the second largest paint company in the

country increased its tur nover from Rs. 228 crores in 1992-93 to Rs. 600

crores in 1998-99 achieving a cumulative growth of 163 per cent. Berger

Paints also achieved a growth of over 150 per cent during the period.

These three major companies, who account for more than 50 per cent of

the total paint market in the country had achieved spectacular results by

cutting into the markets of SSI units who were hard hit by the

liberalisation policies of the Union Government .

While the big units with their diversive portfolio and financial strength

take full advantage of the changed economic scenario, most of the small-

scale units find it increasingly difficult to chalk out a strategy to

overcome the present difficulties. OR the paint industry, which has been

on an upward growth curve, one segment has been propelling growth -

exterior paints.

This segment has been growing at a compound annual growth rate of 25-

30 per cent in the last couple of years, according to industry

representatives. During the current fiscal, this segment is expected to

maintain growth. "The market continues to be on an expansion mode,''

an industry source said. The growth of the segment, which comprises

cement paints and acrylic emulsions, is largely in line with the country's

housing sector's growth. With an improvement in the economy and

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satisfactory monsoon rains, housing construction

activity is expected to stay firm.

The exterior paint segment has also been expanding with the

introduction of acrylic emulsions, which is seen as a step forward

technologically. Exterior emulsion paints have been replacing cement

paints over the years. However, the cement paints market has also been

growing, replacing traditional coatings. Sources also said that the market

size of the exterior paints segment was in the region of Rs 450 crore.

Snowcem India Ltd has had a significant presence in cement paints for

the last four decades. It has 26 per cent share of the cement paints

market. Asian Paints (India) Ltd has the credit of entering the segment

first when it introduced exterior acrylic emulsion paint under the brand

name, Apex, five years ago. Emulsion paint, according to sources, acts as

a fungus resistant, especially in areas where rainfall is heavy.

Subsequently, Goodlass Nerolac Paints Ltd introduced its version of

exterior emulsion under the brand, Nerolac Excel. This product, according

to the company, had a high resistance of fungal growth and micro-

organisms.

ICI India Ltd' presence in this product is through its brand, Supercote.

Demand for exterior paints is quite good this season, according to a

Mumbai-based paints dealer. According to the industry, though the cost

of application of exterior emulsion is much higher it compensates with a

longer life, whereas cement paints had a shorter life.

"Exterior emulsions have a life of 3-10 years,'' Mr H.M. Bharuka,

Managing Director, Goodlass Nerolac, said. According to him, the Indian

paint industry has helped in growing the market for exterior paints by

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constant innovations. "There is something called

elastomeric paint, which is anti-bacterial and used in hospitals and

hotels.''

Asian Paints approached the exterior emulsions segment by setting up a

large user business (LUB) team. This team had the task of targeting co-

operative societies, buildings, hotels and building complexes. Though the

product was sold through dealers, the marketing of the concept was done

by this team, a source said. Kerala has witnessed the best growth in

exterior emulsions over the years. "Kerala is the largest market for

exterior emulsion for the entire paint industry, accounting for 25 per cent

of all India sales,'' said an official of Goodlass Nerolac. "This is primarily

because of weather conditions in Kerala.

Besides, construction activity is very high because of the NRI money

coming in.'' The fact that Kerala is an important market for exterior paints

is evident in the promotional campaigns taken by some paint companies.

Asian Paints had signed on Malayalam film star, Innocent, for its exterior

paints advertisement campaign, to capture the Kerala market. Goodlass

Nerolac signed on Malayalam superstar, Mohanlal, last year to promote

Excel. Mohanlal's association with Excel has helped Goodlass Nerolac

grow the market for exterior emulsions very well, the official said. "Excel

has emerged as the leader in exterior emulsions in Kerala after this

campaign,'' Mr Bharuka said. He has also participated in dealer meetings.

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Source: reports Asian paints, Study report of Indian Export Council,

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Documents

Introduction about paint industry