Asian Paints Company Industry SWOT Analysis

By: Nagaraj M

Industry AnalysisCompany Analysis

SWOT Analysis

By: Nagaraj M

Agenda1. Paint Industry Overview2. Asian Paints Company Overview3. SWOT Analysis4. Value Chain Analysis

By: Nagaraj M

Paint Industry Overview

Asia Pacific Eastern Europe Latin America North America Western Europe

5%

6%

8%

3% 3%

Growth Per Year

Source: World Paints and Coating Industry Association

By: Nagaraj M


8%

11%

5%

Growth Per Year of Major Countries in Asia PacificIndonesia India China


CAGR5.2%(Sales

Volume)

CAGR6.4%(Sales Value)

By: Nagaraj M


Architectural

Industrial

3 Segments

Special Purpose Coatings

51%

28%

21%

Sales Value

51%

28%

21%

Sales Volume


Global

Scenario

By: Nagaraj M


54%

23%

17%6%

Global Consumption of Paint

Asia - PacificEuropeNorth AmericaLatin America

China 60%

India 14%

Global

Scenario

By: Nagaraj M

Paint Industry OverviewDecorative

(70%)

Emulsions Enamel Distemper Cement Paints

Industrial (30%)

Automotive Coating

High Performance

Coating

Powder Coating Coil Coating Marine

Coating

Indian

Scenario

By: Nagaraj M


S

A B

P

P PAN (Pthalic Anhydride)Titamium Dioxide Imported and 50% of the cost

Pigments

S Acetone Exported from Thailand and Japan

Solvents

E Fungicides, DriersDomestically Procured

Additives

B ResinsDomestically Procured

Around 300 raw materials are used which constitutes 70% of the total cost

50% of them are Crude Oil based

30% of the raw materials has to be imported

Binders

Paint Industry is Raw Material Intensive

Indian

Scenario

By: Nagaraj M


0 5 10 15 20 25

Per Capita Consumption Per Year

By: Nagaraj M


Akzo Nobel

PPG Sherwin Williams

RPM Inc Valspar Axalta Diamond Paint

BASF SACAL Nippon02468

1012141618

Top 10 paint companies in the world

Sale

s in

$ Bi

llion

Global

Scenario

By: Nagaraj M


54%

18%

16%11%

2%

Market share of the organized sector

Asian Berger KNP Akzo Shalimar

Indian

Scenario

Indian paint industry is estimated at Rs.406 Billion

By: Nagaraj M

Company OverviewRevenue Segmentation in %

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Asian Paints Company Overview

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

57.1

60.9

55.3

57.6

59.6

57.6 57

55.3

51.6

% to Net Revenue

Raw

Mat

eria

ls C

ost

By: Nagaraj M


FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

375 362

774 775958

10501169

1327

1597

PAT in INR Crores

By: Nagaraj M


FY12 FY13 FY14 FY15 FY16

43.73

50.55

56.6

71.6475.16

R&D Expenditure in INR CRORES

Asian Paints is spending consistently 0.4 to 0.5% of Net Revenue as R&D expenditure

By: Nagaraj M

Asian Paint SWOT Analysis• Strengths:

– Market Leaders with 54% Market Share– It has in house raw material supply and so

it can reduce raw material cost– Good operating and Distribution Network

• Operating in 17 countries• It has 25 Manufacturing facilities in the world• Serving customers in 65 countries• Has 3000 dealers in its network• 50:50 Joint Venture with PPG for Industry

Coating Segment

300 Colour Ideas stores provided more than 2.8 Lakh consultancies to help consumers achieve their dream look for their homes.

By: Nagaraj M


– Presence in Home Improvement BusinessSleek today is the only player in India in the kitchen space that deals in both “Kitchen Components” as well as “Full Kitchen Solutions”.

Expansion and promotion for range of bath fitting offerings in the premium range

By: Nagaraj M


– Achieving disruptive digital transformations in Information Technology

• IT architecture that supports personalized consumer journeys across physical , digital and human touch points through seamless integration of multiple systems.

• Upgraded its core ERP to a highly scalable in-memory S/4 HANA platform.• Constant Investments in Predictive and Data mining

By: Nagaraj M

Asian Paint SWOT Analysis• Strengths

– Best in Working Capital Management

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Inventory Turn Over Ratio

AP Berger KNP Shalimar

By: Nagaraj M

Asian Paint SWOT Analysis• Weakness

– It has only 15% Market Share in Industrial Coating Segment– Widening product mix puts strain on production distribution,

accounting and administration.

By: Nagaraj M

Asian Paint SWOT Analysis• Opportunities

– Increasing the Market Share in Industrial Segment

– Railway ministry has made a budgetary allocation of Rs1200bn in FY17 as against Rs480bn in FY14, a part of which will flow to improvement in existing stations and maintenance of Rolling stock and assets which will increase demand for paints.

By: Nagaraj M

Asian Paint SWOT Analysis• Opportunities• Road Sector

GOI has announced an allocation of Rs970bn for roads sector in FY16-17 budget. Improvement in ordering, tender pipeline and traffic growth in the Indian Road sector is expected to open up new opportunities for the paint companies by way of – Road marking and central divider, Flyovers, bridges – Side and Centre grills to protect them from corrosion – Beautification of the areas surrounding infrastructure

projects

By: Nagaraj M

Asian Paint SWOT Analysis• Threats

Failure of Monsoon

Weakening of Rupees

Rise in Oil Prices

By: Nagaraj M

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