Paint Industry Analysis
ryANALYSIS OF PAINTS INDUSTRY IN INDIA
Introduction: The paints industry made a beginning in India in 1902 when Shalimar Paints set up its operations in Kolkata (Calcutta). Today the size of the paints market in India is estimated at Rs 180 bn.
Market Structure & Product category: The Indian Paint industry can be divided as: * The organized sector comprising of large and medium size units * The unorganized or the small scale sector.
The contribution of the organised and unorganised segments is in the ratio of 70:30.
The organized sector can itself be divided into two distinct segments (Product wise): * Industrial segment which is growing at 15% approximately and consist of 30 % of the market and * Decorative segment which is growing at 8% approximately and consist of 70 % of market
Market Players The major players that control the organized sector are shown below:
Market Players | Market Share (%) | Asian Paints | 43.8 | Kansai Nerolac Paints | 15.3 | Berger Paints India | 14.19 | Akzo Nobel India | 8.53 | Source :CMIE |
Inferences Based on Macro Environment of the Paints Industry
Demographic: * The current Indian population is 1.1 billion and it is expected to be at 1.53 billion by 2030 surpassing China and become the world’s most populated nation [Ref 3], which would result in cheap labour force.
* Most of the Indian populations are migrating toward the urban area for employment and industrialization [Ref 3]. So there is a lot of opportunity in urban area.
* As the population is increasing at a rapid rate, the number of houses also increases accordingly, so there would be a huge demand for paints.
Economic:
* India is the world’s fourth largest economy with the current GDP growing at 7.8 %, which is expected to grow by 8 % in the next year and paint industry growing at 1.5 times the GDP growth [Ref 1], so there is always a demand for paints.
* Foreign trade and investments have
Introduction: The paints industry made a beginning in India in 1902 when Shalimar Paints set up its operations in Kolkata (Calcutta). Today the size of the paints market in India is estimated at Rs 180 bn.
Market Structure & Product category: The Indian Paint industry can be divided as: * The organized sector comprising of large and medium size units * The unorganized or the small scale sector.
The contribution of the organised and unorganised segments is in the ratio of 70:30.
The organized sector can itself be divided into two distinct segments (Product wise): * Industrial segment which is growing at 15% approximately and consist of 30 % of the market and * Decorative segment which is growing at 8% approximately and consist of 70 % of market
Market Players The major players that control the organized sector are shown below:
Market Players | Market Share (%) | Asian Paints | 43.8 | Kansai Nerolac Paints | 15.3 | Berger Paints India | 14.19 | Akzo Nobel India | 8.53 | Source :CMIE |
Inferences Based on Macro Environment of the Paints Industry
Demographic: * The current Indian population is 1.1 billion and it is expected to be at 1.53 billion by 2030 surpassing China and become the world’s most populated nation [Ref 3], which would result in cheap labour force.
* Most of the Indian populations are migrating toward the urban area for employment and industrialization [Ref 3]. So there is a lot of opportunity in urban area.
* As the population is increasing at a rapid rate, the number of houses also increases accordingly, so there would be a huge demand for paints.
Economic:
* India is the world’s fourth largest economy with the current GDP growing at 7.8 %, which is expected to grow by 8 % in the next year and paint industry growing at 1.5 times the GDP growth [Ref 1], so there is always a demand for paints.
* Foreign trade and investments have
References: http://www.business-standard.com/content/research_pdf/asian%20paints%20ltd.pdf http://www.ficci.com/indian-economy.pdf http://www.indexmundi.com/india/demographics_profile.html CMIE Submitted by:- Sumit Malhotra