Chapter 2-1 PDF
Chapter 2-1 PDF
CHAPTER 2
Solvents. Generally paints and coatings are applied to products to protect them from
Industrial Paints.
Industrial Paints: This market can be further divided into the following four sub
Automotive paints.
Marine Paints.
Powder Paints.
The global demand for paint is estimated at over 21mtpa. At valued at about
$60 bn. The industry is expected to grow at 3% over the next few years. The high growth
regions are the developing countries of Southeast Asia and Latin America. While the
mature markets of North America and Western Europe are likely to witness very low
growth. The largest player is ICI of UK with a share of around 10% followed by Akzo-
(JAPAN). Over the last few years the industry has been consolidating with an objective
to strengthen the product lines and distribution chains. This has led to series of mergers
and acquisitions. India’s market is only 0.65 mn tones, roughly 2.7% of world demand,
but is growing at annual clip of 10%. Tonnage gains in the industrial coating segment
will be constrained by a shift in trend towards higher solid coatings (such as powder
coatings), which often weigh less per kilo than solvent brone coatings, and require
generally fewer, thinner coats. On the other hand, the architectural segment is seeing a
continuous shift towards water-based paints, which weigh more than their solvent-brone
counter parts, and will promote stronger tonnage gains. These trends have evident around
the world but have had the most impact in more mature markets. Most of developed
world has already effected such as switch to water-based formulations for most
architectural applications. The developing world is also experiencing this trend- India
included.
small group of highly focused, globally positioned firms. For many of these companies
(E.g. Sherwin Williams, Kansai Paints, and Nippon Paints) coating represents the
primary line of business. In other cases (e.g.; AKZO NOBEL, ICI, HOECHST DUPONT
and COURTALDS) the firm strong position has arisen from involvement in various
upstream petro chemical activities, including production of many of basic raw material
The most rapid gain in paints and coatings production will be registered in the
developed regions should be prepared in this area, as paint product as soon adopting
global standards, hence all paint companies will have to comply the environmental
regulations. Global production of paint and coatings can be divided in two broad sectors:
Architectural Paint and Industrial Coatings. The most basic division is between
architectural coating and industrial coating. AKZO NOBEL, the world’s top player has a
strong presence in both the segments. (60:40 in favor of industrial coating) Sherwin
William, ICI, Asian Paints, and Benjamin Moore focus primarily on architectural paint.
Whereas PPG, KANSAI Paint, courtyards, NIPPON Paint and RPM focus heavily on the
industrial segment. BASF, DUPOINT, LILY industries and DAI NIPPON focus entirely
on industrial coatings.
Foundation for paint was laid in the year 1902 with the setting up of Shalimar
Paints in Calcutta. It was during the and after the World War II. That large number of
paint manufacturing units was set up in India. Since then the Indian paint industry has
made substantial progress. The paint industry has come to the recognition as an important
sector in the national economy in producing industrial coating and decorative paints.
Decorative paints available in wide range of combination account for 70% of the coatings
total production. While industrial paints share the balance of 30%. This rate is
diametrically opposite to the trend in the industrialized countries where industrial paints
account for 70% and Decorative paints for the balance of 30%. With paint majors shifting
their focus from decorative to technology-intensive industrial paints and also venturing
into unexploited rural markets, the paint industry is headed for good times. The country’s
per capita consumption of paints at 0.32 kilograms (kg) is a fraction of the world average
at 21 kg.
While developed nations like USA, Japan etc. have per capita consumption in
excess of 20 kg. even developing nations like Taiwan and Philippines have higher per
capita consumption than India. Such a low level is mainly due to poor awareness about
preservation of assets in India. With increasing disposable income, this figure is bound to
go up which is good news for paint companies as it implies higher demand for their
products. However, it also need to be noted that consumption patterns across nations
significantly lower than the developed countries such as U.S.A., U.K., Japan, Germany
etc. This is so because of low per capita GNP and higher prices of paints. The present
installed capacity in the organised sector is 282 lakh tonnes (1989-90). The Indian paint
industry is marked by the high cost and erratic availability of various raw materials. More
over certain synthetic raw materials such as some resins, high performance pigments and
additives are either proprietary or specific to certain formulations and their exact
equivalents are not available indigenously. The in-house R&D Centres of various paint
manufacturers and institutional R&D laboratories in India have done considerable work
in the paint field, especially in areas such as development of new products and processes,
processes. The R&D expenditure in the Indian corporate sector, is, however, quite low, as
compared to the major foreign paint manufacturers. Small scale units continue to play a
vital role in the paint industry by manufacturing a large range of products and mainly
catering to localized customers. The high purchase price of raw materials (due to low
volumes) adversely affects the cost of the finished products. The technology transfer
from the larges sector to the small sector may improve, in view of the recent policy
announcement allowing equity participation (up to 24%) by the organized sector units in
the small sector units. The comparative ration analysis of the organized sector paint
manufacturers in India and abroad shows that certain Indian companies are comparable to
the international leaders in terms of various profitability, inventory ratios etc. The major
drawback is on account of higher raw material costs and its percentage of selling price
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 Mr.M.T.Antony, former
According to him, 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
market share of Rs. 275 crores, the contribution from the organized 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
The two main problems affecting the growth of small industries were increased
problem for the SSI sector as most of the banks proceed very cautiously to provide
financial assistance to this sector. 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. 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
Liberalization policies of the Union Government. While the big units with their divisive
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
The main players: Asian Paints (AP), Good lass Nerolac, ICI (India), Berger and
Jenson & Nicholson are the leading companies in the organized sector. The top six
manufacturers account for about 80% of the market in the organized in value terms. AP is
the industry leader, with an overall market share of 33% in the organized sector. Threat
with a 38% market share. Goodlass, a Tata company, is number two with a 14% market
Asian Paints was started in 1942 and has over 60 years of industry experience. It
is India’s largest paint company with widest range of wall and wood paints.They offer
products from low cost painting solutions to high end luxury interior and exterior paints.
They are third largest paint manufacturer in Asia serving 65+ countries worldwide. They
have state of the art infrastructure of paint manufacturing plants located across 26
locations around the world. Company has head office in Mumbai and has annual turnover
Rs 140 billion. It is listed in stock market and has talented team of 6000 professionals
Nerolac is leading Paint Company of India. They are 100% subsidiary of Kansai
Paint, Japan. Headquartered in Mumbai, they have 5 own manufacturing plants and 6
contract manufacturing plants located at various strategic locations. They have three
Coating. They are leaders in Industrial Paints and Automotive Coatings. They have
outstanding network of dealers and their products are available at remote village retailers
too.
Berger Paints is UK based company which started its India operations in 1923.
They are India’s second largest paint company based out of Kolkata. With years of
expertise and extensive R&D department, they are upgrading their products with time
and are present in all segments of paint industry. They have factories located at 11
locations in India and a nationwide distribution network of more than 15000 dealers.
They also sell their products in 3 countries apart from domestic market. More than 2500
Employees are associated with the company and working hard to product best products of
Industry.
started its Indian operations way back in 1932. They are among top 3 brands of
decorative paints in India. With their international experience, they have launched some
innovative and high-end luxury paints in Indian market which are in demand for various
luxurious projects. They have their head office at Gurgaon and numerous stores spread