Yogender Singh, India, Asia-Pacific Correspondent04.16.24
One of the fastest-growing global paint and coating industries, the Indian industry is undergoing a seismic shift. Entry of new large-scale producers, scaling up of operations by mid-sized producers, and increased emphasis by small-sized and unorganized producers on higher quality products is indicating tough competition in the industry in the coming days and years.
Coatings World presents an overview of the changing ground situation in the Indian paint and coating industry in this feature.
Four major producers - Asian Paints, Berger Paints, Kansai Nerolac, and AkzoNobel - account for the lion’s share of organized paint and coating industry of the country. Sales revenue and volume of these four top producers have grown far more than the average growth of the Indian paint and coating industry during the last two decades, implying that these producers are increasing their market share at the cost of smaller and unorganized sector paint and coating producers.
Dominance of the Indian paint and coating industry by these top four producers has been a major trend of the country’s coating industry for last many years.
The sector, which was initially dominated by a few key players, is now seeing more new entrants backed by conglomerates, reflecting the optimism about India's paint and coating industry. Grasim and JSW Paints are two major names to enter paint and coating space in the last few years.
Entry of these new names in the domestic industry with deep financial pockets is expected to change the composition and pecking order of the Indian paint and coating industry in the short and medium term.
The demand from real estate is expected to be robust in the 2024-25 financial year on expectations of significant project completion and increased government spending on affordable housing and infrastructure. The government's recent announcement of building 30 million affordable houses over the next five years under PM Awas Yojana, in addition to the 40 million houses already under implementation, translates into continued demand momentum, encouraging new players to bet on the sector.
As per rating agency Care Edge estimates, residential housing sales are expected to increase by 10% in the top 15 cities during calendar year 2024. Demand from repainting, which accounts for 80 percent of the total decorative paint demand, is also expected to pick up due to factors such as a growing population, increase in rental homes, and growth in the income levels of consumers.
The potential in the sector prompted a number of non-paint conglomerates like Birla Group's Grasim, JSW Group, JK Cement, Pidilite, and pipes and fittings manufacturer Astral to foray into the business.
Grasim’s paints business “Birla Opus” has been launched in the first quarter of the current year with trial production already launched at three plants located at Panipat (state of Haryana), Ludhiana (state of Punjab) and Cheyyar (state of Tamil Nadu). Each of these factories have a capacity of about 200 million liters; one of the factories also has a capacity of 30 million liters of its solvent range.
The company would offer complete range of high-performance superior products in the premium, mid-range and mass markets favorably placed across multiple price points. The company has come up with a strategy of having QR codes on its paint cans, which customers can scan to avail a 10% discount, while the company gets information on where the cans are sold in real time.
The company’s management also claims that JSW Paints has recorded a five times higher than industry growth in business since its launch five years ago. After crossing INR 10 billion in FY22 ($120 million), JSW Paints is on track to close FY24 with a turnover higher than INR 20 billion ($240 million). The company has crossed the INR 15 billion mark in the first nine months of the 2023-24 financial year.
According to Parth Jindal, managing director of JSW Paints, “Our pioneering efforts to build a strong holistic water-based paints portfolio has placed us in a commanding position to service the fast-evolving preferences of Indian consumers. It’s a moment of great pride that JSW Group’s first true consumer-facing business has been so well received across the country enabling us to cross the INR 20 billion revenue so quickly from when we entered the market. We are committed to our vision of building JSW Paints as the leading paints company of the future that will continuously set new trends in the industry. Our core strategy of continuous innovation and wide-ranging disruptions are delivering promising results.”
Coatings World presents an overview of the changing ground situation in the Indian paint and coating industry in this feature.
Indian Paint and Coating Industry Over the Years
The Indian paint and coating industry has been one of the fastest growing paint sectors in Asia. Significant contribution and growth from the architectural and industrial sub-segments have enabled Indian coating producers to register vibrant growth over the years.Four major producers - Asian Paints, Berger Paints, Kansai Nerolac, and AkzoNobel - account for the lion’s share of organized paint and coating industry of the country. Sales revenue and volume of these four top producers have grown far more than the average growth of the Indian paint and coating industry during the last two decades, implying that these producers are increasing their market share at the cost of smaller and unorganized sector paint and coating producers.
Dominance of the Indian paint and coating industry by these top four producers has been a major trend of the country’s coating industry for last many years.
The sector, which was initially dominated by a few key players, is now seeing more new entrants backed by conglomerates, reflecting the optimism about India's paint and coating industry. Grasim and JSW Paints are two major names to enter paint and coating space in the last few years.
Entry of these new names in the domestic industry with deep financial pockets is expected to change the composition and pecking order of the Indian paint and coating industry in the short and medium term.
Sector’s Attractiveness for New Entrants
Fast growing consumer demand and a hike in per capita income has prompted big players to explore paint and coating businesses. A post-pandemic boom of investments and infrastructure development has resulted in a demand spike from the real estate sector, which accounts for about 70% of the total coating demand in India.The demand from real estate is expected to be robust in the 2024-25 financial year on expectations of significant project completion and increased government spending on affordable housing and infrastructure. The government's recent announcement of building 30 million affordable houses over the next five years under PM Awas Yojana, in addition to the 40 million houses already under implementation, translates into continued demand momentum, encouraging new players to bet on the sector.
As per rating agency Care Edge estimates, residential housing sales are expected to increase by 10% in the top 15 cities during calendar year 2024. Demand from repainting, which accounts for 80 percent of the total decorative paint demand, is also expected to pick up due to factors such as a growing population, increase in rental homes, and growth in the income levels of consumers.
The potential in the sector prompted a number of non-paint conglomerates like Birla Group's Grasim, JSW Group, JK Cement, Pidilite, and pipes and fittings manufacturer Astral to foray into the business.
Grasim Paints
The most ambitious announcement in the Indian paint industry to date has been from Grasim. The company has announced to invest a total of INR 100 billion ($1.2 million), with six facilities and a cumulative capacity of 1,332 million liters per annum. The company aims to become second largest paint and coating producer in the country in coming years.Grasim’s paints business “Birla Opus” has been launched in the first quarter of the current year with trial production already launched at three plants located at Panipat (state of Haryana), Ludhiana (state of Punjab) and Cheyyar (state of Tamil Nadu). Each of these factories have a capacity of about 200 million liters; one of the factories also has a capacity of 30 million liters of its solvent range.
The company would offer complete range of high-performance superior products in the premium, mid-range and mass markets favorably placed across multiple price points. The company has come up with a strategy of having QR codes on its paint cans, which customers can scan to avail a 10% discount, while the company gets information on where the cans are sold in real time.
JSW Paints
JSW Paints is part of the diversified US$23 billion JSW Group, India’s leading business group, with interests in sectors such as steel, energy, infrastructure, and cement. Launched in 2019, the company currently has two manufacturing units, an industrial coatings facility at Vasind in Maharashtra and decorative paints facility at Vijayanagar in Karnataka, with a combined capacity of 150,000KL per annum. The company’s management claims that it has already become the largest industrial coil coatings company in India.The company’s management also claims that JSW Paints has recorded a five times higher than industry growth in business since its launch five years ago. After crossing INR 10 billion in FY22 ($120 million), JSW Paints is on track to close FY24 with a turnover higher than INR 20 billion ($240 million). The company has crossed the INR 15 billion mark in the first nine months of the 2023-24 financial year.
According to Parth Jindal, managing director of JSW Paints, “Our pioneering efforts to build a strong holistic water-based paints portfolio has placed us in a commanding position to service the fast-evolving preferences of Indian consumers. It’s a moment of great pride that JSW Group’s first true consumer-facing business has been so well received across the country enabling us to cross the INR 20 billion revenue so quickly from when we entered the market. We are committed to our vision of building JSW Paints as the leading paints company of the future that will continuously set new trends in the industry. Our core strategy of continuous innovation and wide-ranging disruptions are delivering promising results.”
