"CMR's India Paints Report 2016 - CyberMedia Research - …cmrindia.com/external/reports/CMR_Paints_Study_IMG Report 2016.pdf · Asian$Paints,$Kansai$Nerolac,$Berger$Paints$and$ICI.$

Copyright 2016 Cyber Media Research and Services Ltd. Reproduction is forbidden unless authorized. All rights reserved. India | Asia-Pacific | North America

Integrity | Insights | Independence | Excellence

Cyber Media Research Ltd. An ISO 9001: 2008 Company

CMR IMG Q2 2016: INDIAN PAINTS SECTOR

Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 2 Copyright 2016 Cyber Media Research. Reproduction is forbidden unless authorized. All rights reserved. 2

Sharp decline in crude oil prices, and a consequent decline in raw material prices.

Rising demand in Urban India, aDributable to increased purchasing power and changing consumer preferences.

Government’s sharp focus on infrastructure: Make in India; Housing for All; Smart CiLes Mission; Sagarmala Project; Bharat Mala Project; Rurban Mission.

FY15: In Perspective

Improved economic growth and lower inflaLon levels resulted in increased consumpLon. Historically, Indian paint industry has grown close to 1.2 Lmes of GDP growth.


Industry Overview

[Source: CMR Analysis and Industry EsLmates]

Indian paints Industry is esLmated at ~Rs.406 Bn, out of which organized sector accounts for ~65% (~Rs.264 Bn) of the total market.

• Organized Sector: Top organized players include Asian Paints, Kansai Nerolac, Berger Paints and ICI. Top 5 companies control 80% of the organized market.

• Unorganized Sector: In the unorganized segment, there are about 2,000 units having small and medium sized paint manufacturing plants.

65% ORGANIZED MARKET

35% UNORGANIZED MARKET

DECORATIVE PAINTS

INDUSTRIAL PAINTS

72% 28%


Demand Side View

#1 Rising demand in Urban India.

#2 Rural India undergoing transformaLon; demand rising in Tier II and III ciLes

#3

Reduced duraLon of painLng cycles from about 6-‐8 years earlier to about 3-‐3.5 years now

#4

Increased purchasing power and changing consumer preferences

Rising demand in the auto industry, due to falling crude oil prices, new product launches, expected interest rate cuts.

Government’s mega push on infrastructure

#5

#6


Supply Side View

Titanium Dioxide (TiO2) is the single most important pigment in paints, forming around 25-‐30% of the total raw material cost. TiO2 prices in India fell ~11% YoY and ~1% MoM.

Mineral TurpenLne, a petroleum disLllate, is the most widely used solvent in paint manufacturing. Its prices depend on crude oil.

The containers for carrying paints are made from various crude oil derivaLves. A drop in crude oil prices translates into savings.

#1

#2

#3

Major paint players are focusing on product InnovaLon, customer Experience enhancement and special offerings. Some recent examples include brands like Green & Eco friendly from Nerolac Impressions Eco Clean and Berger Breathe Easy, Dulux Weathershield etc. IniLaLves such as Asian Paint’s ColorNext (annual colour forecasLng iniLaLve) and Berger Paint’s Lewis Berger Preview also underline differenLaLon.

#4


Market Share (in %) [FY15]

• Turnover represents Sales net of excise duLes • Turnover includes Joint Ventures & Subsidiaries in India but excludes

overseas operaLons

54.1

17.5 15.4 2.1

[Market Share in %]

10.9



Revenue Segmentation (in %)

4 96

Chemicals CoaQngs

55 31

DecoraQve CoaQngs

AutomoQve CoaQngs

14

General Industrial and Performance

CoaQngs

80 20

DecoraQve CoaQngs

Industrial CoaQngs

82 5

DecoraQve CoaQngs

Industrial CoaQngs

13

InternaQonal Ops.



DecoraLve paints segment will witness higher growth, thanks to Government focus and incenLves to the housing sector

A normal monsoon will be vital to the growth prospects.

VolaLlity of the Indian currency and internaLonal oil prices will also challenge the paints industry.

FY16: Outlook

Industrial paints segment will see growth, as auto industry demand picking-‐up. The Government focus on infrastructure will be a key growth contributor.


About CMR

CMR is a young bouLque firm that enables its clients to find answers to its most pressing business concerns and challenges, through market research, market intelligence and go-‐to-‐market services.

This is us, at a glance:

Business Channel Partner Ecosystem Research

User and Demand-‐side Research

Industry VerQcals / Business Domain Research InformaLon Technology * TelecommunicaLons *

Semiconductor & Electronics * * Life sciences * Government

Industry ConsulQng and Advisory Services

Go-‐To-‐Market Services


Prabhu Ram General Manager

E: [email protected] M: +91-‐9899440380

www.cmrindia.com

CMR I NDUSTRY CONSULT ING PRAC T I C E

Contact

"CMR's India Paints Report 2016 - CyberMedia Research - …cmrindia.com/external/reports/CMR_Paints_Study_IMG Report 2016.pdf · Asian$Paints,$Kansai$Nerolac,$Berger$Paints$and$ICI.$

Documents