INDUSTRY

ANALYSIS
REPORT
PRESENTED BY
D.DILIP KUMAR
18R21E0024
MBA “A” SEC
 ORIGIN &GROWTH
Paint is any pigmented liquid, liquefiable,
or mastic composition that, after application to a substrate in a
thin layer, converts to a solid film. It is most commonly used to
protect, color, or provide texture to objects. Paint can be made
or purchased in many colors—and in many different types,
such as watercolor, synthetic, etc. Paint is typically stored,
sold, and applied as a liquid, but most types dry into a solid.
 ORIGIN
&GROWTH

 South African archeologists reported finds in Blombos Cave of a

100,000-year-old human-made ochre-based mixture that could
have been used like paint]
  Further excavation in the same cave resulted in the 2011 report
of a complete toolkit for grinding pigments and making a
primitive paint-like substance.
 Cave paintings drawn with red or yellow
ochre, hematite, manganese oxide, and charcoal may have been
made by early Homo sapiens as long as 40,000 years ago.
 ORIGIN
&GROWTH
 The first recorded paint mill in America was reportedly
established in Boston in 1700 by Thomas Child. A century and
a half later, in 1867, D.R. Averill of Ohio patented the first
prepared or “ready mixed” paints in the United States.
 In 1718, Marshall Smith invented a "Machine or Engine for
the Grinding of Color's" in England.
 In 1866, Sherwin-Williams in the United States opened as a
large paint-maker and invented a paint that could be used from
the tin without preparation.
 The paint tube was invented in 1841 by portrait painter John
GoffeRand
 ENTRY BARRIERS
• Entry barriers in term of technological and funds
requirements are relatively lower in the paints sector.
However decorative paints are marketing-savvy products
and backed by large advertisement campaigns and
dealership networks.
Seasonal Demand:
Inventory Management at Dealer Level:
Distribution Costs:
Shade Offerings:
Low Per Capita Consumption:
Competition from the Unorganized Players:
 COMPARISION BETWEEN COMPETITORS
(COMPANIES)
 
ASIAN BERGER NEROLIC SHALIMAR
Responsiveness Ok ok best ok

(quote)

Pricing In between Lowest highest Lowest

Suggestions on paint great great great Not great

color

Quality of painters good Not good Not good Not good

Supervision best good good So-so

Standard wall good Not good Not good Not good

designs and

execution
NEW TRENDS OR MEGA
TRENDS
 Paints using water in place of solvent
 Introduction of solar Reflective Coating
 Emulsion & Enamel paints taking over Traditional
White wash
 Introduction of Tinting machines to lower working
capital cost
 Eco-Friendly Paints
  
NEW TRENDS OR MEGA TRENDS

• Focusing on decorative segment &

industrial segment
• Eco-Friendly Paint
• Nano technology
 MAJOR CUSTOMERS
• Demand for paints comes from two broad
categories:
1. Decorative: Major segments in decorative
include exterior wall paints, interior wall
paints, wood finishes and enamel and ancillary
products such as primers, putties etc.
2. Industrial: Three main segments of the
industrial sector include automotive coatings,
powder coatings and protective coatings
 REQUIREMENTS TO INDUSTRY
• The paints sector is raw material intensive, with over 300
raw materials (50% petro-based derivatives) involved in
the manufacturing process. Since most of the raw
materials are petroleum based, the industry benefits from
softening crude prices. Paint involves the mixing of
various raw materials in various proportions. The raw
materials are of a wide variety.
REQUIREMENTS TO INDUSTRY

 Pigment  Binder
i. Prime Pigments: i. Oil-Based Binder
ii. Extender Pigments: ii. Latex-Based Binder
  Liquid  Additives
 KEY DETERMINATION OF DEMAND

1. The price of the good or service.

2. Income of buyers.
3. Prices of related goods or services. These are
either complementary, those purchased along with
a particular good or service, or substitutes, those
purchased instead of a certain good or service. 
4. Tastes or preferences of consumers.
5. Expectations. These are usually about whether the
price will go up.
 EXPECTED GROWTH RATE IN THE FUTURE

 The overall paint market grew 11.8% YoY (value terms) in

FY18 to Rs 55,800 crores, driven by decorative paint
growth of 12.9% to Rs 42,900 crores.
 The paint market is expected to register 12.5% CAGR till
FY20, driven by a robust 13.4% CAGR in decorative
paints
 The Indian paint market is expected to grow with
over 75000 crores in terms of value for period of FY 2017-
18 to FY 2022-23, on account of change in lifestyle,
urbanization, and increase level of education, high margin
on paint.
 PROPORTION OF THE COST OF RAW MATERIAL, LABOUR, UTILITIES AND FUEL

• Raw Materials-as much as 70% of cost, greater for commoditized

products, less for specialized and high-performance technologies
• Labor and Manufacturing-Greater manufacturing time and
difficulty, higher price
• Finished Goods Inventory-Greater Inventory Requirements,
Greater Price
 PRODUCTIVITY AND LABOUR

• The longer it takes to manufacture a batch of paint, the greater

the labor costs. These labor costs will be applied to the price
of your coating. Generally, it does not take much more labor to
manufacture large batches than small batches. Paint
manufacturing time depends mostly on three factors:
equipment, formula requirements and procedure, and
manpower to execute the task.
 DEGREE OF QUALITY
 There are many end markets for paints and coatings,
ranging from home builders to original equipment
manufacturers, many of which are subject to regulations
that require testing for compliance. Some of the
measures are
 Viscosity
 Specific Gravity
 Destructive Testing
 Environmental Compliance Testing
 TECHNOLOGY STABILITY

• The current challenge in paint and coating industry is to apply

sophisticated technology such as nanotechnology to achieve
environmentally friendly and durable coatings.
 IMPORTANT TECHNOLOGY CHANGES IN THE INDUSTRY

• The paint industry is a growing sector in future. The broad product

ranges and the advanced technology is helping substantially. The
refining of paint products in terms of environmental concern
• The other technologies are like zero VOC, water-based, lead,
mercury and chromium free shades. Few more advancements are
like IR (Infrared Rays) reflective, UV resistance, Fleur scenes,
Texture and high heat resistance coatings.
 PROPORTION OF SALES GROWTH
TOWARDS NEW PRODUCTS
• Global Paints & Coatings Market is expected to grow at a
CAGR of 5.75% during 2016-2021 to reach a projected value
of USD 178.8 billion by 2021. Asia-Pacific Region to grow
fastest at a CAGR of 12% in this Period.
• Paint industry looks at 10%-plus growth in sales in the current
fiscal 
With GST rate coming down from 28% to 18%, the Indian
paint industry is looking at 10%-plus growth in sales in the
current fiscal. 
 ROLE OF RESEARCH &DEVELOPMENT CELL

• Equipped with world-class infrastructure and manned by

skilled talent, the R&D centers focus on:
• Product and process innovations
• Development and prototyping of innovative, environment
friendly technologies
• Creating new business opportunities by bridging technology
and product gaps faster
• Customization of Industrial Coatings products as per customer
requirement
 SWOT ANALYSIS
• Strengths • Weaknesses

a) Importance of brand image a)     Scarcity of Raw Materials

as barriers to new entrants b)    Requirement of high
b) Good technology backup working capital
C) Distribution channels has C)    High dependence on one
improved segment
d) Weaker distribution
Customer tastes and
perceptions change very fast
 SWOT ANALYSIS

• Opportunities • Threats

a)     Fiscal incentives provided a) Foreign companies are

by the government moving as sole players (E.g.,
b)    Shift from commodity Valentino Paints from Italy) 
market segment to FMCG b) Raw material Prices
c)    Rise in disposable income of c) Changing government laws
the household
d) Competition eroding the
d) New Launches
margins
e) Emerging markets 
f) Diversification 
 LOGISTIC & SUPPLY CHAIN MANAGEMENT

Logistics management is that part of supply chain

management that plans, implements, and controls the efficient,
effective forward and reverses flow and storage of goods,
services and related information between the point of origin and
the point of consumption in order to meet customers'
requirements.
 CUSTOMER BUYING
BEHAVIOUR
Consumer behavior involves the psychological processes that
consumers go through in recognizing needs, finding ways to
solve these needs, making purchase decisions (e.g., whether or
not to purchase a product and, if so, which brand and where)

•Brand:
•Product portfolio:
•Distribution:
 MAJOR PLAYERS

• Akzo Nobel
• Asian Paints Ltd
• Berger Paints Ltd
• Pidilite Industries Ltd
• Nerolac paints ltd
• Jenson & Nicholson India Ltd
• Shalimar Paints Ltd
• DULUX
 COMPETATIVE ADVANTAGES OF THE PLAYERS

Shalimar paints
• India’s iconic structures like Rashtrapati Bhavan, Howrah
Bridge, Vidyasagar Setu, Salt Lake Stadium, continue to use
Shalimar Paints.
• Shalimar Paints shifts focus to the Decorative Business
• Shalimar already has a strong presence in the industrial paints
segment and now it’s decided to enter the decorative segment
• Shalimar paints is the preferred paints for roads
 COMPETATIVE ADVANTAGES OF THE PLAYERS

ASIAN PAINTS
• Market leader
• Good reputation
• Network channels and distribution channels
• Advanced in promotional strategies
Kansai Nerolac
• Leader in industrial segment
• Globally known name
 MARKET SHARE OF THE INDUSTRY & COMPANY

NAME Market Cap(Rs. cr.)

1. Asian Paints 139,457.77
2. Berger Paint 30,238.03
3. Kansai Nerolac 24,793.00
4. Akzo Nobel 8,054.72
5. Sirca Paints 451.26
6. Shalimar Paints 369.86
7. Jenson Nicholso 11.98
TOTAL MARKET CAPITAL 203376.62
INNOVATIVE IDEAS IN THE MARKETING AND PROMOTIONAL
STRATEGIES

• The general classification of paint manufacturers in India, is

simple and either Organized Brand Players and the
Unorganized Sector.  However, for all practical reasons, the
Indian Paints manufacturers fall into four sub-categories.
1) The Major Brand Players and Giants
2) The Outsourcing Network
3) The High Volume, Low value paint manufacturers
4)The Niche Players
 PROMOTIONAL STRATEGIES

There are three types of sales promotion strategies:

Push, Pull, or a combination of the two.
Typical tactics employed in push strategy are:
allowances, buy-back guarantees,
free trials, contests, specialty advertising items, disc
ounts, displays, and premiums.
Typical tactics employed in pull strategy are:
samples, coupons, cash refunds and rebates,
premiums, advertising specialties, loyalty
programs/patronage rewards, contests,
sweepstakes, games.
 O U
K Y
A N
T H