Paint companies bullish on growth

Improving consumer demand elevated hopes of a better quarter

The decorative segment is expected to continue pushing growth for most paint companies in the country as a slowdown on the industrial side is likely to persist for the next few quarters. In the next three years, the paints industry will double to nearly Rs 50,000 crore from the current Rs 26,040 crore, Nippon Paints' president for the decorative segment Ramakanth Akula said on the back of the growth in urbanisation and increasing disposable incomes. Akula is also the president of the Indian Paints Association, an industry body consisting of domestic and international players.

"We expect the 70:30 ratio of the decorative and industrial paints segments to continue into the future,"  he said. "Demand for housing besides the need to repaint houses at regular intervals will be key drivers of growth in decorative paints," he added.

 

The decorative paints market in India is dominated by Asian Paints, followed by players such as Berger and Kansai Nerolac. Most of these players remain aggressive in the Indian market adding capacity and advertising heavily.

While the market continues to be skewed towards the retail or consumer end, the trend is different abroad, point out company executives. Divyendu Pundhir, managing director, India and. South Asia, automotive & aerospace coatings, AkzoNobel, said that industrial paints as a percentage of the overall market abroad stood at nearly 35-40 per cent. Among other reasons, a slowdown in the auto sector has impacted growth of industrial paints in India, market experts said. It also remains a technologically-intensive business, with most companies either having an external tie-up or developing expertise in-house. Market leader Asian Paints, for instance, has two joint ventures with the US-based PPG Industries on the industrial side. Japanese players such as Kansai and Akzo Nobel already have in-house expertise in industrial paints.