The paint industry globally and in India
Introduction TO PAINT INDUSTRY
Indian pigment industry has evolved since its origin in 1920 from simply cosmetic pigments market depending chiefly on festivals to a more diversified market. The estimation size of Indian pigments market is about US2.5 $ billion contributed by organized and unorganised sections in the ratio of 65:35. This spread has been steadily diminishing supplying flat playing field to both by steady and steeped decrease in excise responsibilities over the last few old ages from 40 % to 14 % as organized sector is subjected to strike responsibility.
India has one of the lowest per capita pigment ingestion at 1kg/annum as against 15-25kg/annum of a few of the developed states, while for the few states like US, Japan etc per capita ingestion is more than 25 kg/annum. Low per capita ingestion with rural incursion of merely 10 % has prompted many domestic and planetary makers to step up their production capacity to tap this latent potency.
The Indian pigment industry is segmented into cosmetic and industrial market. Cosmetic market catering to lodging sector has been valued at US 1.7 billion and Industrial market providing to automobile OEM, industries and railroads has been valued at US $ 0.8 billion. With current demand of 6,50,000 metric tons the per capita ingestion of India is amongst lowest in the universe.
Owing to din in lodging sector, increasing urbanisation, easy handiness of loans and displacement from kuccha or semi permanent to permanent lodging construction the demand for cosmetic pigments section is increasing which constitute 70 % of Indian pigment industry. However, due to rapid industrialisation, addition in fabrication over the past few old ages the ratio of industrial to cosmetic pigments is expected to be 50:50 in line with the planetary tendencies.
The planetary participants like Akzo Nobel, Sherwin Welliams, Nippon and Jotun have set up their stores in India. They are improbable to impact the domestic participants as it would necessitate some clip to fit the graduated table, reach the trade name equity, distribution web, and trade name trueness that is presently being enjoyed by the bing participants. However, serious attempts are being made by them to capture market portion through organic growing, Sherwins William has acquired domestic cosmetic pigments company, Netco Paints, while Akzo Nobel has taken over ICI pigments. Therefore over the long-run the intense competition good take a toll on operating borders of the participants therefore switching the focal point from monetary value addition to be optimisation.
GLOBAL AND INDIAN SCENARIO
The entire market of pigments industry worldwide is 95 billion $ . The planetary top 10 participants are 1 ) Akzo Nobel, 2 ) PPG Industries Inc. 3 ) Sherwin-Williams Co. 4 ) DuPont Performance Coatings 5 ) BASF Coatings 6 ) The Valspar Corp. 7 ) Kansai Paint Co. , Ltd. 8 ) RPM International Inc. 9 ) Nippon Paint Co. 10 ) Jotun
The twelvemonth 2009-2010 was a really ambitious twelvemonth for the international pigment industry because of the planetary economic crisis. There were lower gross revenues in the period as compared to the old period.
Worldwide diminution in fabrication,
Housing crisis in United States,
Challenges confronting automative industry,
UAE impacted with utmost fiscal crisis & A ; liquidness crunch
Caribbean economic system contracted impacting Paint demand
Egypt did non hold a important lag ; good resurgence
South Asia on the whole had good demand
Cosmetic Segment-Industry kineticss:
Per capita ingestion ( Kg )
Market size ( US $ bn )
Growth ( % )
No. of Players
Market portion of top 4 participants ( % )
Beginning: Industry informations, B & A ; K Research
Entire market portion of Indian Paint industry is Rs 170 billion. Cosmetic pigments is Rs 110 billion and Industrial Paints is Rs 60 billion.
Organized sector – 65 %
Entire Turnover for the twelvemonth 2009-10 is ` 11082Cr.
Net Net income is ` 1063 Chromium
Large participants in organized sector and their market portion value in cosmetic sections are as follows:
Asiatic Paints 37 % A·
Kansai Nerolac 15.9 % A·
Berger Paints 13.8 % A·
ICI 11 % A·
Jenson & A ; Nicholson 5.7 % A·
Shalimar 4 % A·
Others 12 %
Unorganized sector – 35 %
It has about 2500 units.
Entire volume of the market is 650,000 Meitnerium
Buoyant Demand in India:
Demand for Cosmetic pigments was really good throughout the twelvemonth
Rural and little town demand significantly better than big towns
Construction activity revived and increased capex spend across sectors
Industrial pigments grew good due to growing in automotive and lasting sections
Paint companies are expecting a higher demand growing with lifting higher GDP, higher disposable incomes and better life styles.
Demand for pigment comes from two wide categories-Decorative and Industrial
The cosmetic pigments contribute to around 65 % of the entire pigment market in India. This section is the most unorganised of the overall pigment market. There are around 2000 companies in this section. The major participants are Asiatic Paints, Berger Paints, Nerolac Paints and Dulux Paints. Asiatic Paints is the market leader in this class.
The decoartive pigments are used in places, offices, edifices, architectural intents and other show intents ( billboards, streamers, etc. ) . The major demand of cosmetic pigments arises in gay seasons. But now the tendency is altering, client do non wait for any juncture. Besides, the penchants in purchasing are besides altering. The decoartive pigment section is really sensitive to monetary value but besides it is a immense border concern.
Types of cosmetic pigments in India
The major classs in cosmetic pigments are Interior wall pigments, Exterior wall pigments, Enamels, Emulsions, Varnishes ( metal & A ; wood ) and other subordinate merchandises like primers, putties, etc.
Composition of Cosmetic Paints
Figure 1 Cosmetic Paints in India
Decorative Sector Features:
Enamels are oil based pigments which have a calendered coating in them. These pigments are fundamentally used on difficult surfaces like walls, metals and wood. Now yearss they besides find applications in signboards, streamers, billboards, etc.
Other types of enamels available in market are a ) H2O based enamels which have low VOC B ) dissolver based enamels which are extremely immune to discolorations and H2O.
Enamels is a steady growing section in India. The merchandise comes in premium, luxury and economic system scopes.
Emulsions are produced by blending two or more than two unblendable liquids. In India, Water based emulsions have a really good market. Besides, this class is a really high growing one. The bulk of the merchandises are premium 1s.
Other characteristics of emulsions are a ) elusive metallic textures in Gold and Silver B ) rich metallic sunglassess with alone grain texturing degree Celsius ) marble like feeling on interior walls vitamin D ) silky glowing visual aspect vitamin E ) high discoloration opposition degree Fahrenheit ) anti-fungal belongingss
Distempers are H2O based wall pigments in which pigments are assorted with H2O, gum, etc. Earlier, the tendency was to utilize lime wash, but now distempers offers a low monetary value and better quality than locally made merchandises. Distempers can be aggrisevely priced in rural market where clients do non pass much on premium merchandises.
Unique belongingss of distempers are long lasting, attractive flatness coating, lasting and value for money merchandise.
Exterior emulsions are H2O based and acrylic based and is used on exterior walls. It is the fastest turning section in India. Assorted characteristics of exterior emulsions are all upwind pigments ; defy utmost tropical conditions, anti algal and anti fungal, protection against base and UV debasement, etc.
Varnishs are crystalline and protective movies used on wood and metals. They provide first-class conditions opposition, light speed & A ; preserves natural beauty of wood on outsides for old ages. Besides, they are immune to abrasions and discolorations. In India, the varnish market has gone down because of wall documents and sunmicas, but still it can turn if engineering inventions are made.
The industrial pigments contribute to around 35 % of the entire pigment market in India. This section is extremely organized one because of technolgy intensive nature and high investings. There are few companies in this section, bulk of which are foreign affiliations. The major participants are Akzo Nobel, Asiatic Paints and Nerolac Paints. Akzo Nobel ( earlier ICI India ) is the market leader in this class.
Consumer durable goodss, FMCG,
Infrastructure building ( roads, main roads, dikes, etc. ) ,
Protective coatings ( atomic, thermic or hydel power workss, chemical, petrochemical or fertiliser workss, refineries, sugar, mush and paper industry, offshore constructions, pharmaceuticals etc. )
Floor coatings ( across all industries )
Types of industrial pigments in India
The major classs in industrial pigments are Automotive pigments, High perfromance coatings, Powder coatings, Coil coatings and Marine pigments.
Composition of Industrial Paints
Figure 2 Industrial Paints Composition
Automotive Paints is a really high growing sector because India is going an car hub and in recent old ages many major car companies like BMW, Volkswagan, General Motors, Skoda, Mercedes Benz have entered or expanded their capacity. Besides, demand from two Wheeler shapers is besides increasing due to ingestion from big Indian Middle Class. So, this sector has a immense potency in it.
Nerolac and Asiatic Paints are the taking OEM participants and Akzo Nobel is the taking participant in the replacing market. The merchandise scope is a ) Intermediate coats/primer surfaces B ) top coats c ) touch up pigments vitamin D ) heat immune pigments vitamin E ) theodolite protection movies
Assorted characteristics provided by automative pigments are
protection of vehicles during theodolite from dust, chemicals, bird dungs,
heavy metals free,
protection against UV beams,
rock bit protection,
opposition to sunlight and weather and
Powder coatings are used for ornament and protection of consumer durable goodss ( electronic equipments, FMCG merchandises ) , car constituents, material handling equipments, gas cylinders, spectacless, helmets, barrels and containers.
Increase growing in this class due to increased gross revenues of car ancillaries and consumer durable goodss ( majorly due to rapid GDP growing ) . Berger and Nerolac lead in this solid pulverization surfacing section.
Powder Coating is applied to metal merchandises by electrostatic spray, the coated point is so heated and the pulverization thaws into smooth, uninterrupted movie. There are no liquids or solvents.A The cardinal benefits of pulverization coatings are
Ease of application
Excellence of coating
Excellence of public presentation
High Performance CoatingsA
High public presentation coatings are used in mega investing undertakings like refineries, thermic, atomic, hydel power coevals, petrochemicals, fertilisers, etc. There has been a steady growing in gross revenues of high public presentation coatings due to big investings in these industries in last decennary. A
Coil Coatings are solvent based pigments used in sheets and spirals. Akzo Nobel and Asiatic Paints lead this section. The spiral coatings are used in steel industries and its downstream industries.A
Shalimar and Bombay Paints are the major participants in these anti-corrosive, submerged pigments used for ships and containers.
These high public presentation pigments are used in fertilisers, petrochemicals etc. for bar of corrosion.
Concrete floors are a immense investing for any industry. There are assorted restrictions attached with concrete flooring: Weakening of the support and concrete surface due to chemical spillage, presence of clefts and surface porousness allows assorted oils to ooze in, accretion of dust and possibilities of microbic growing.
To protect concrete floors from its restrictions, floor coatings were introduced. These coatings are difficult erosion and scratch resistant. They have first-class mechanical belongingss and supply floors that are tough and long lasting. They can besides be used to forestall H2O from oozing across floors. At present, there is no gait in the gross revenues of floor coatings but in future, its public-service corporation will assist in increasing its market portion.
The cost of route markers is fractional in comparing to the cost of the route, but it is really of import in footings of safety. The belongingss of route markers are retro-reflective, fast drying, extremely lasting and 100 % acrylic.
General Features which people look for purchasing pigment:
Choice of place and office pigments
Matching or desired colour
Quality of the pigment
Coating and Gloss
Grease & A ; soil resistant
Choice of industrial pigments
Harmonizing to public-service corporation
Asiatic pigment limited company was established in 1942, presently being the Asia ‘s 3rd largest pigment company. Asiatic pigments is the largest participant in cosmetic section basking the market portion of 26 % . Its planetary operation is taken attention by subordinates Berger International, Apco Coatings, SCIB pigments and Taubmans.
Major Trade names of Asiatic Paints:
Ace, Apex ultima, Royal, Royal Play, Apex duracast, tractor emulsion, utsav and wood closer.
Deltron, Delfleet, Bilux, Aspa, deco prime.
Standalone Gross saless grew by 18.1 % in value footings.
Amalgamate Gross saless stood at Rs 6455 Crores.
Standalone PAT grew by 106.2 %
Amalgamate net income after minority involvement stood at 821 Crores.
Cardinal Focus Area:
Company is puting to a great extent on spread outing Retail web to provide to turning demand in cosmetic and industrial sections.
Improvement in client satisfaction with batch of enterprises like Colorworld shops, online service offering catalog covering full palletes of sunglassess and supplying the cost appraisal Etc.
Strengthening of Supply concatenation to provide to turning demand:
Rohtak Plant commissioned in April 2010with initial capacity of 1,50,000KL.
Capacity of Sriperumbadur works has been increased to 1,40,000KL.
Aquired land in Kesurdi in the province of Maharahtra to put up the following works.
Kansai Nerolac Paints Ltd
The history of Nerolac Paints dates back to 1920. Nerolac Paints was established as Gahagan Paints and Varnish Co. Ltd. in Mumbai. In 1933, it transformed to Goodlass Wall India Ltd. and became a Pvt Ltd. Company in 1946, before acquiring the name Goodlass Nerolac Paints Pvt. Ltd in 1957. And late in 2006, it acquired the present name Kansai Nerolac Paints Ltd. but these alterations in names have n’t deterred the repute Nerolac Paints clasp. Nerolac is the subordinate of Japan based Kansai Paint company ltd. a top 10 company in the universe. Nerolac is the 2nd largest company in India. Nerolac enjoys the largest market portion in industrial section.
Major Trade names of Kansai Nerolac Paints:
Impressions, Beauty Gold, Excel, Suraksha, wonderwood, Satin enamel, Synthetic Enamel
Nerolac Pearl luster coating, Nerolac man-made level pigment, Nerolac with Titanium.
Standalone Gross saless grew by 18.5 % in value footings.
Amalgamate Gross saless stood at Rs 1971 Crores.
Standalone PAT grew by 67.8 %
Amalgamate net income after minority involvement stood at 165 Crores.
Cardinal Focus Area:
With rural sector lending to merely 10 % to overall market, Nerolac is pitching up to do inroads into rural market in major manner.
Nerolac ‘s major focal point is on spread outing distribution chiefly in rural market of Maharashtra, Gujrat and Madhya Pradesh as rural population in these three provinces has a ample disposable income.
Company is reconstructing to assorted cost film editing steps in the countries of stock list direction, stuff costs, working capital direction and operating expense controls.
Nerolac with the immense success of its one-stop-shop shop, Impressions, is be aftering to increase its shop from bing seven Numberss to thirteen by twelvemonth terminal.
Nerolac is be aftering to put the 400 Cr over the following two old ages to augment the production capacity of its Hosur works from bing 1,50,000 metric tons to 1,80,000 metric tons.
Akzo Nobel Paints
AkzoNobel is the largest planetary pigment and surfacing company and a major manufacturer of forte chemicals. It has presence in more than 80 states, India being one of the major market. It started its operation in India back in 1911, when Brunner & A ; Co an arm of ICI in UK opened a trading office in Calcutta to sell bases and dyes. In 2008 AkzoNobel became proprietor of the full equity portion capital of Imperial Chemical Industry Ltd. by virtuousness of which it became the subordinate of AkzoNobel. To leverage the planetary strength of Akzonobel trade name, the name of ICI pigments has been changed to Akzon Nobel India ltd in 2010.
Major Trade names of Akzo Nobel Paints:
Dulux valvate touch, Dulux supper smooth, Dulux conditions shield, Dulux tile shield, Dulux visible radiation and infinite, Dulux 3 in 1 stay clean.
Dulux satin coating, Dulux super rubric 5 in 1, Dulux cyanuramide, Dulux man-made clear varnish, Dulux NC clear lacquer.
Standalone Gross saless grew by 5.17 % in value footings.
Amalgamate Gross saless stood at Rs 1040.80 Crores.
Standalone PAT decreased by 45.9 %
Amalgamate net income after minority involvement stood at 159 Crores.
Cardinal Focus Area:
Company has planned to duplicate its distribution web and its capacity in following four old ages.
Akzo Nobel has identified land in south India for puting up its 4th installation and aiming it to acquire over by 2012.
Akzo Nobel is be aftering to establish planetary merchandises portfolios with accent on advanced engineering and greater focal point on R & A ; D Centres.
AkzoNobel is committed to the cause of environment, something which is brooding in its docket of making lead free pigments.
BASIC MANUFACTURING PROCESS OF PAINTS
( Ti dioxide, C black, iron oxide, Cd sulfide etc )
PAINT IS CANNED
THINNING THE PASTE ( transferred to big boilers and agitated with dissolver )
Scattering THE Pigment
( Crunching in sand factory, filtrating, treating in scattering armored combat vehicle, pigment blended to solvent )
Making THE PASTE
( Pigments + rosin + dissolvers + additives = paste )
The major challenges faced by Indian Paints Industry are as follows:
Intensive nature of natural stuff
The monetary values of pigments mostly depend on the cost of natural stuff. There are around 300 uneven natural stuffs required for the fabrication of pigments. The major raw-materials are titanium dioxide, phthalic anhydride and peutarithrithol. These constitute about 50 per centum to entire cost. Titanium dioxide entirely contributes 30 per centum to the cost. The other natural stuffs like flaxseed, Castor, soyabean oils, etc. add up to the whole natural stuff cost of 70 per centum of entire cost. So, the monetary values of pigments are really much dependant on natural stuffs and any fluctuations in the monetary value of natural stuffs will eat up the border of the company.
About 30 % of the 300 natural stuffs are crude oil based derived functions. So, any alteration in rough oil monetary values will take to alter in the monetary values of natural stuffs. From last 2-3 old ages, there was batch of fluctuations in rough oil monetary values because of which borders of the pigment companies got hit. The force per unit area further increased due to recession and at that place after lessening in ingestion.
Cyclic nature of cosmetic pigments
The demand of cosmetic pigments is cyclical in nature i.e. it increases for a period, so lessenings and after certain period of clip it once more increases therefore demoing cyclical form. It happens because people by and large have their houses white-wash during gay seasons. Besides, one time houses get painted, so it needs a white wash after 4-5 old ages.
The demand is influenced by monsoon besides. When there is a good monsoon, so there is an addition in agricultural and industrial end product. This has a positive impact on disposable income with people and hence a good demand. But if the monsoon is non good, so the demand will acquire affected particularly in cosmetic pigments section.
The bulk of pigments manufactured in India contain a big sum of lead, quicksilver and Cr. These elements are really risky in nature and can present a menace to wellness of human existences. Now the policies are going really rigorous and therefore companies are required to come up with newer fabrication processes so as to bring forth pigments with a low sum of VOC ( volatile organic compound ) and minimum aromatic content. Besides, the content of lead, Cr and quicksilver should be really less thereby doing the pigment eco safe.
Import policies – The import policies plays a really important function in finding the monetary values of pigments because around 30 % of the natural stuffs has to be imported from foreign states. So, any alteration in import revenue enhancement government will hold an impact on the costing.
Exchange rate – Since the major natural stuffs are imported, any motion in rupee-dollar monetary values is really critical and therefore necessitate to be closely looked. For illustration, whenever rupee depreciates against dollar, the purchaser has to postpone out more money.
Supply concatenation – The pigment industry requires a batch of working capital because the maker has to purchase 300 natural stuffs and from different sellers. So, the company which has a really robust seller and distribution web will mostly profit from it.
Technology promotions – the pigment industry is extremely engineering intensive due to which little participants find it really hard to put in newer engineerings and therefore yield to competition from foreign companies. Large participants have tied up with foreign companies and they are still dominant in the market.
In India, the per capita ingestion of pigments is really low as compared to other developed states. So, there is a batch of growing potency for pigment companies. The major countries where Indian Paint Companies can leverage their growing potency are:
Around 70 % of the entire population of India resides in rural countries and the rural sector contributes merely 10-15 % of the entire ingestion of pigments. So, there is a big growing potency in rural market. In rural countries, there are many families who have disposable income but distribution web is non in topographic point. Besides, in this twelvemonth, betterment in agribusiness and allied sectors, coupled with good monsoon has improved the demands. Besides, the assorted authorities strategies have improved the net incomes of rural people. the industry can increase its gross from rural market by presenting low cost pigments and coatings. Besides, the companies will hold to increase advertisement budget for rural countries coupled with developing distribution web.
In India, rapid industrialisation is taking topographic point because of broad policies and immense foreign investing in India. India is going an industrial hub for cars, consumer durable goodss and assorted other industries. With the rapid growing, demand of Industrial coatings will travel on increasing.
At present, the portion of industrial pigments is 35-40 % which has a possible to touch 50 % in few old ages. Besides, due to big investings in steel, power, refinery sectors, the gross revenues of high public presentation coatings and spiral coatings is increasing.
Real estate sector
India is registering a changeless GDP growing of around 7.5 % to 9 % after there was a lag in economic system two old ages back. Now the existent estate sector is dining with big investings in lodging sector and building sector. There is a rapid addition in gross revenues of cosmetic pigments and architecture pigments and it will go on in future. Besides, the client penchant in purchasing pigments is traveling towards H2O pigments because of environmental issues.
South Asiatic states and Developed economic systems
Indian pigments have a really good market in USA, UK and European states. With the recessive steps taken and the resurgence of planetary economic system, the exports will resuscitate and will steadily travel in upward way.
Besides, the other avenues of growing are developing economic systems like Nepal, Bangladesh, Sri Lanka, Pakistan, Bhutan, Mynmmar and Arabian states like UAE, Egypt, etc.
India as a pigment fabrication hub
The Indian pigment industry saw a important alteration in decrease of excise responsibilities, usage responsibilities which led to decrease in the monetary values of natural stuffs. Besides, there was a limitation on increasing the capacity of works which was removed afterwards by the authorities. Now, since India offers inexpensive labour and assorted other revenue enhancement benefits ( sponsored by Centre and provinces for inclusive growing ) , it has a deep potency to go a major fabrication hub of cosmetic and industrial pigments.
The major Indian participants have already started taking stairss in this way. The sector experienced a batch of capacity enlargement, joint ventures with foreign companies, foreign acquisitions and investings in engineering in the last decennary. Therefore, India has become a really feasible option for constitution of pigment fabrication workss.