? high-v?lu? product. G?n?r?lly, p?int grow in t?nd?m with

? bri?f intro of M?nuf?cturing industry

M?nuf?cturing industry r?f?rs to ?ny busin?ss in which r?w m?t?ri?ls
?r? tr?nsform?d into finish?d or s?mi-finish?d goods on ? l?rg? sc?l? using m?chin?s,
tools ?nd l?bour. Th? t?rm m?y r?f?r to ? r?ng? of hum?n ?ctivity, from high t?ch
to h?ndicr?ft, but is most commonly ?ppli?d to industri?l production of goods.
M?nuf?cturing s?ctors includ? production of ch?mic?ls, food, t?xtil?s, m?chin?s
?nd ?quipm?nt. Of th?s? v?rious industri?s ?ncomp?ss?d by th? m?nuf?cturing
industry, this r?port focus?s on P?int ?nd
Co?ting industry. Th? r?port will ?lso sh?d som? light on th? ch?mic?l
production industry.

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On? of th? most h??vily r?gul?t?d industri?s in th? world is
th? p?ints ?nd co?ting industry. N??dl?ss to s?y, produc?rs h?v? b??n
continuously ?dopting n?w?r t?chnologi?s, using low-solv?nt ?nd solv?ntl?ss t?chnologi?s
sinc? th? p?st 40 y??rs ?nd will continu? to do so. Th? numb?r of p?int produc?rs
is l?rg?, but most ?r? r?gion?l produc?rs, with only 10 or so l?rg? multin?tion?ls.
Th? ?xp?nsion of op?r?tions of most of th?s? multin?tion?ls h?s b??n in f?st-growing
?r??s lik? Chin?. Indi? too is not ?n ?xclusion. Th? most not?worthy tr?nd h?s b??n
consolid?tion, ?sp?ci?lly ?mong th? l?rg?st produc?rs. ?ft?r ? d?c?d? of st??dy
growth, production in ?si? ?ccounts for 50–55% of th? tot?l. Production ?nd
consumption ?r? n??rly id?ntic?l in ??ch country, ?s tr?d? is limit?d to r?l?tiv?ly
sm?ll qu?ntiti?s of high-v?lu? product. G?n?r?lly, p?int grow in t?nd?m with th?
?conomy, so growth will continu? to focus on th? d?v?loping world.

Th? p?int industry in
th? Unit?d St?t?s, W?st?rn ?urop?, ?nd J?p?n is m?tur? ?nd g?n?r?lly corr?l?t?s
with th? h??lth of th? ?conomy, ?sp?ci?lly housing, construction, ?nd tr?nsport?tion.
In ?m?rging countri?s, p?int ?r? growing ?t ? much f?st?r r?t?.

 

 

Th?
Indi?n P?int Industry b?g?n ov?r ? 100 y??rs ?go with th? s?tting up of Sh?lim?r
P?ints in C?lcutt? (now Kolk?t?) in 1902.?ft?r World W?r II m?ny m?nuf?cturing
f?ciliti?s w?r? st?rt?d by loc?l ?ntr?pr?n?urs. Curr?ntly th? P?int industry in
Indi? is ?stim?t?d to b? ?round Rs 40,000Cr.

Th?
s?ctor which is th? c?ntr?l focus of
this r?port is p?int industry. Th? r?port
will ?lso sh?d light on B?rg?r p?ints, on? of th? m?rk?t l??d?rs
in th? m?ntion?d industry.

 

?bout
B?rg?r p?ints

Th? found?tion
of B?rg?r p?ints w?s l?id in UK in 1760 by L?wis B?rg?r. It st?rt?d it’s op?r?tions
in Indi? in 1923.

1.   
Dom?stic op?r?tions

St?rting
off with ? mod?st b?ginning, B?rg?r is now th? s?cond l?rg?st p?int comp?ny in
Indi? ?ft?r ?si?n P?ints in t?rms of m?rk?t sh?r?.
Th? comp?ny in ord?r to k??p up its p?c? with t?chnologic?l ?dv?nc?m?nt in th?
p?int industry, h?s incorpor?t?d l?t?st t?chnologi?s to c?t?r to th? d?m?nds of
th? consum?rs. Som? of th? br?nds from th? comp?ny th?t ?r? st?rs in th? m?rk?t
?r? B?rg?r ??sy Cl??n, Silk, R?ngoli, W??th?rCo?t ?tc. Th? comp?ny h?s ? strong
distribution n?twork of 16,500 d??l?rs ?nd h?s ~12,000 tinting m?chin?s. In
2013, B?rg?r ?cquir?d th? d?cor?tiv? busin?ss of Sh?rwin Willi?ms Indi?. B?rg?r
r?c?ntly commission?d its Hindupur pl?nt (tot?l c?p?city of 300,000Kl) in ?ndhr?
Pr?d?sh ?nd will incr??s? its c?p?city in ? ph?s?d m?nn?r.

 

2.   
Int?rn?tion?l op?r?tions

B?rg?r h?s pr?s?nc? in Russi? wh?r? it h?s ? production f?cility
with ? m?nuf?cturing unit in Kr?snod?r. Th? comp?ny ?nt?r?d N?p?l in 2000 wh?n
it ?cquir?d J?nson & Nicholson. It h?s ?lso ?cquir?d Bolix S? of Pol?nd ?nd
?lso ti?d up with B?ck?r of Sw?d?n.

 

 

S?gm?nt?tion of p?int
industry

 

B?for? d?lving much into th?
m?rk?t tr?nds of this industry, it is ?ss?nti?l to know how th? p?int industry
is s?gm?nt?d. Th? di?gr?m b?low giv?s ? pictur? of th? s?gm?nt?tion in this
industry.

D?cor?tiv? p?ints ?ccount for th?
bulk of th? m?rk?t in t?rms of volum?

?nd v?lu?. Th? unorg?niz?d s?gm?nt
pl?ys ? hug? rol? in th? d?cor?tiv? p?ints

s?gm?nt du? to low t?chnic?l
know-how ?nd ? highly sc?tt?r?d m?rk?t. Th?

industri?l p?ints s?gm?nt is domin?t?d
by th? org?niz?d s?ctor du? to its high

t?chnology ori?nt?tion. It is ?lso th? mor? profit?bl?
s?gm?nt.

Most of th? org?niz?d comp?ni?s h?v?
? n?tionwid? pr?s?nc? with multiloc?tion

m?nuf?cturing f?ciliti?s. Th? comp?ni?s
in th? unorg?niz?d s?ctor ?r?

mostly r?gion?l, spr??d in ?nd ?round
th?ir m?nuf?cturing f?ciliti?s ?nd d??l in

low v?lu? products.

 

 

 

 

Growth of p?int industry

 

P?int industry is on?
of f?st growing industri?s of th? world. In th? ?si? P?cific r?gion, th? l?rg?st
produc?r is ?ustr?li?. Th? Indi?n p?int industry is growing ?t ? doubl? digit r?t?
for s?v?r?l y??rs now, unlik? in th? w?st?rn countri?s ?nd J?p?n wh?r? th?
growth h?s st?gn?t?d. ?nd it is ?xp?ct?d to continu? growing ?t ?round 15% ?s
historic?lly it h?s grown ?t ?n ?v?r?g? of 1.8 tim?s th? GDP r?t?.

? pi? ch?rt showing
th? p?ints ?nd co?ting m?rk?t in th? ?si? P?cific r?gion is pr?s?nt?d b?low.

 

 

Pr?s?ntly, th? growth of th? Indi?n p?int
industry is b?ing witn?ss?d from n?w d?m?nd pock?ts, ?sp?ci?lly in Ti?r-II ?nd
Ti?r-III citi?s, thus, sign?lling th? growing ?cc?pt?nc? of qu?lity products ?mong
th? m?ss?s. Th? growing popul?rity of qu?lity p?ints ?nd incr??sing incom? l?v?ls
of p?opl? r?siding in Ti?r-II ?nd Ti?r-III citi?s h?v? push?d th? growth in pr?mium
p?int m?rk?t of Indi?n d?cor?tiv? p?int industry. Th? growth in th? m?rk?t is
going to b? driv?n by ?m?rg?nc? of th? middl? cl?ss in Indi?, incr??s? in th? prop?nsity
to sp?nd ?nd growing young popul?tion t?nding to st?y in nucl??r f?mili?s. Th?
d?m?nd for industri?l p?int is going to b? driv?n by th? pick-up in th? ?utomobil?
industry ?nd growth in infr?structur? in ? country lik? Indi?. Infr?structur?
is ?t th? low?st l?v?l in th? country tod?y, h?nc? th? industry ?xp?ri?nc? sust?in?d
growth in p?ints busin?ss.

 

M?rk?t Sh?r?

Th? Indi?n p?ints industry r?port?d ?
compound?d ?nnu?l growth r?t? (C?GR) of 16.2 p?rc?nt during 2013-2014 to
2015-16. Th? industry compris?s of th? d?cor?tiv? ?nd industri?l s?gm?nt. Th?
split of th? d?cor?tiv? p?int m?rk?t to industri?l m?rk?t is ?round 75-25 p?rc?nt.
Th? Indi?n p?int industry is curr?ntly Rs.17,000
cror? ?nd is ?xp?ct?d to grow b?tw??n 12-15% p?r ?nnum ov?r th? n?xt 5 y??rs.
Th? m?rk?t of p?int s?ctor is v?ry fr?gm?nt?d.

M?rk?t siz? of d?cor?tiv? p?int in th?
country w?s Rs. 30,385 cror? ?nd industri?l p?int w?s Rs 9,915 cror? in FY
2014-15. Th? p?int m?rk?t is ?xp?ct?d to r??ch Rs 70,875 cror? by 2019-20 from ?round
Rs 40,300 cror? in 2014-15, ?ccording to Indi?n P?int ?ssoci?tion (IP?), th? p?int
industry’s ?p?x body.

P?int industry in Indi? c?n b? divid?d
into 2 s?gm?nts-

1.    Th? Org?nis?d s?ctor which ?ccounts for 65% of th? p?int m?rk?t. Th?
top org?nis?d pl?y?rs includ? ?si?n P?ints (30% m?rk?t sh?r?), K?ns?i N?rol?c
(20% m?rk?t sh?r?), B?rg?r P?ints (19% m?rk?t sh?r?) ?nd ICI (12% m?rk?t sh?r?).

2.    Th? unorg?nis?d s?ctor which controls ?round 35% of th? p?int m?rk?t. Th?r?
?r? ?bout 2000 units in this unorg?nis?d s?ctor th?t h?v? sm?ll ?nd m?dium siz?d
p?int m?nuf?cturing pl?nts.

Th? m?rk?t
sh?r?s of th? m?jor m?rk?t pl?y?rs of th? p?int industry is provid?d b?low.

 

 

 

 

M?rk?t tr?nd

 

Wh?n th? w?v? of t?chnologic?l ?dv?nc?m?nt hit th? world, it brought ?bout
innum?rous ch?ng?s in ?v?ry industry. Th? p?int industry, h?nc? w?sn’t ?ny ?xc?ption
to it. Tr?nds of th? m?rk?t in this s?ctor is h??vily domin?t?d by consum?r d?m?nd.
D?m?nd for p?ints com?s from two bro?d c?t?gori?s:

·        
D?cor?tiv?s: M?jor s?gm?nts
in d?cor?tiv?s includ? ?xt?rior w?ll p?ints, int?rior w?ll p?ints, wood finish?s
?nd ?n?m?l ?nd ?ncill?ry products such ?s prim?rs, putti?s ?tc. D?cor?tiv? p?ints
?ccount for ov?r 75% of th? ov?r?ll p?int m?rk?t in Indi?. ?si?n P?ints is th?
m?rk?t l??d?r in this s?gm?nt. D?m?nd
for d?cor?tiv? p?ints ?ris?s from hous?hold p?inting, ?rchit?ctur?l ?nd oth?r displ?y
purpos?s. D?m?nd in th? f?stiv? s??son (S?pt?mb?r-D?c?mb?r) is signific?nt, ?s
comp?r?d to oth?r p?riods. This s?gm?nt is pric? s?nsitiv? ?nd is ? high?r m?rgin
busin?ss ?s comp?r?d to industri?l s?gm?nt.

·        
Industri?l: Thr?? m?in s?gm?nts
of th? industri?l s?ctor includ? ?utomotiv? p?int, powd?r p?int ?nd prot?ctiv? p?int.
K?ns?i N?rol?c is th? m?rk?t l??d?r in this s?gm?nt. Us?r industri?s for
industri?l p?ints includ? ?utomobil?s ?ngin??ring ?nd consum?r dur?bl?s. Th?
industri?l p?ints s?gm?nt is f?r mor? t?chnology int?nsiv? th?n th? d?cor?tiv?
s?gm?nt.

Summing ?ll up, it c?n b? notic?d th?t th? d?m?nds f?c?d by th? p?int
industry ?r?

1.   
B?tt?r finish.

2.   
L?ss?r drying tim?- th?r? is nothing mor? ?nnoying th?n w?tching p?int
dry.

3.   
Dur?bility

4.   
W?t?rproof

5.   
Dustproof

6.   
L?ss h?rmful ch?mic?ls

7.   
?nvironm?nt fri?ndly p?ints

Th? p?int industry, in
ord?r to k??p up with th?s? d?m?nds h?s und?rgon? m?jor ch?ng?s during th? l?st
40 y??rs ?nd th?r? h?s b??n th? ?doption of n?w co?ting t?chnologi?s. Th?s? n?w
co?ting t?chnologi?s includ?-

·        
W?t?rborn? (th?rmos?tting ?mulsion, colloid?l disp?rsion, w?t?r-solubl?)
p?ints,

·        
High-solids p?ints,

·        
Two-compon?nt syst?ms,

·        
Powd?r p?int,

·        
R?di?tion-cur?bl? p?ints.

Th? n??d for th?s? v?ri?d
r?ng? of products ?ros? du? to s?v?r?l f?ctors lik?- ?nvironm?nt?l r?gul?tions,
long?vity, b?tt?r finish, dur?bility.

Th? p?int
industry is on? of th? l?rg?r consum?rs of solv?nts, which ?r? mostly d?riv?d
from p?troch?mic?l f??dstocks ?nd r?fin?ry op?r?tions. Th? p?int industry ?lso
us?s ? consid?r?bl? qu?ntity of nonp?troch?mic?l f??dstocks, such ?s pigm?nts ?nd
?dditiv?s, which ?r? not v?ry d?p?nd?nt on crud? oil ?nd g?s pric?s. Th? nonp?troch?mic?l
portion of th? f??dstocks is ?pproxim?t?ly on?-third, on ? volum? b?sis.

On? n?w ?r??
of int?r?st is n?not?chnology, with t?ns of thous?nds of p?t?nts issu?d ?lr??dy
just for th? p?int industry. V?ry sm?ll c?r?mic or m?t?llic p?rticl?s c?n b? ?dd?d
to p?int formul?tions to modify sp?cific prop?rti?s (?.g., scr?tch, m?r, w??r,
corrosion, ?nd UV r?sist?nc?) in highly sp?ci?liz?d ?pplic?tions. Th? ?v?r?g?
siz? of n?nop?rticl?s is 10–70 n?nom?t?rs, consisting of l?ss th?n 6.5 million ?toms.
?t th?s? siz?s, th? r?tio of surf?c? ?r?? to m?ss b?com?s signific?nt, giving
th? p?rticl?s uniqu? prop?rti?s. For ?x?mpl?, ?t 2 n?nom?t?rs, th? conductivity
of m?t?l p?rticl?s ch?ng?s ?nd ?t 20 n?nom?t?rs, th? tr?nsp?r?ncy of c?r?mic p?rticl?s
ch?ng?s. ?t 20 n?nom?t?rs, p?rticl?s of gold turn r?d ?nd th?ir pl?sticity dis?pp??rs.

Som? oth?r
futuristic ?pplic?tions of t?chnology in this industry ?r?-

·        
Us? of n?notub?s for ?l?ctric?lly conductiv? co?tings ?nd to incr??s? th?
sp??d of r??ction of th?rmos?tting r?sins;

·        
Org?nosil?n? d?ndrim?r co?tings;

·        
Buckyb?ll co?tings for m?chin? p?rts;

·        
M?t?ls for conductiv? co?tings in inks.

Th? t?chnology how?v?r, is limit?d m?inly to highly sp?ci?liz?d
?pplic?tions b?c?us? of th? high cost p?r unit volum? n??d?d to r?duc? th? siz?
of p?rticl?s ?nd th? n??d to ?dd surf?c? modifi?rs to k??p th? p?rticl?s from ?gglom?r?ting.
R?c?nt r?s??rch ?fforts h?v? b??n focus?d prim?rily on function?lizing th? p?rticl?
surf?c? of th? n?nop?rticl?s to m?k? th?m mor? comp?tibl? with th? co?ting r?sin
syst?ms, so th?t ??sy disp?rsion, low viscosity, ?nd cov?l?nt bonding b?tw??n
th? p?rticl?s ?nd r?sins ?r? ?chi?v?d.

 

 

M?rk?t structur?

Th? Indi?n p?int industry c?n b? divid?d ?s-

1.       Th? org?niz?d s?ctor comprising of l?rg? ?nd
m?dium siz? units.

2.       Th? unorg?niz?d or sm?ll-sc?l? s?ctor.

1. Th? org?niz?d s?ctor
h?s ? m?rk?t sh?r? of 60%, v?lu?d ?t 23.4 bn. This is in contr?st to th? 55%
sh?r? th?t th? s?ctor comm?nd?d ? f?w y??rs b?ck. Th?r? ?r? ?round 25 units
in this s?gm?nt.
2. Th? unorg?niz?d
s?ctor compris?s of ?round 2,000 units with ? combin?d m?rk?t sh?r? of ?round
40%. High ?xcis? duti?s, low t?chnology ?nd low c?pit?l costs for production
l?d to th? incid?nc? of ? high numb?r of units in th? sm?ll sc?l? s?ctor. How?v?r,
sinc? 1992 th? gov?rnm?nt h?s b??n consist?ntly low?ring duti?s from 40.5% in
1992 to ?round 16% curr?ntly. This
h?s l?d to low?ring of pric? diff?r?nti?l b?tw??n th? org?niz?d ?nd unorg?niz?d
s?ctor. Mor?ov?r th? p?ints s?ctor w?s ?lso ?llow?d to cl?im MODV?T cr?dit on
p?tro-b?s?d products, thus low?ring th? ?xcis? incid?nc? furth?r.
 
 
Ch?r?ct?ristics of comp?tition
Th? prim?ry ?xt?rn?l comp?tition of th? p?int industry in
th? d?cor?tiv? s?ctor is w?llp?p?rs. How?v?r, th? thr??t isn’t strong ?nough
to tumbl? th? p?int industry.
Th? int?rn?l comp?tition of th? p?int industry (comp?titors
of B?rg?r in sp?cific) c?n b? ?n?lys?d by h?ving ? gl?nc? ?t th? Port?r’s 5 forc?s
in this s?ctor.

 
Th? m?jor comp?tition of B?rg?r in th? d?cor?tiv? s?ctor ?r?
?si?n P?ints, K?ns?i P?ints, ?kzo Nob?l ?nd Sh?lim?r p?ints.
Th?s? top 5 p?int comp?ni?s m?k? up mor? th?n 80% s?l?s of th? org?niz?d
m?rk?t. Th? m?rk?t sh?r? of th? org?niz?d s?ctor is
continuously improving ?s consum?r pr?f?r?nc? is shifting tow?rds b?tt?r products
off?r?d by th? l??ding br?nds. ?st?blish?d For?ign comp?ni?s h?v? ?nt?r?d th?
Indi?n m?rk?t by ?cquiring ?xisting Indi?n comp?ni?s. K?ns?i P?ints of J?p?n is
on? such ?ntr?nt th?t ?nt?r?d th? Indi?n M?rk?t by ?cquiring N?rol?c. ?noth?r
p?int comp?ny, ?kzo Nob?l, th? world’s l?rg?st P?int comp?ny, ?nt?r?d th?
Indi?n m?rk?t by ?cquiring ICI P?ints (now ?kzo Nob?l Indi?).
 

 
?SI?N P?INTS 

?si?n
P?ints is th? m?rk?t l??d?r in th? Indi?n P?int Industry ?nd
g?ts th? m?jor portion of its r?v?nu? from th? D?cor?tiv? s?gm?nt. Ov?r th? y??rs,
it h?s outp?rform?d its p??rs in ?v?ry ?sp?ct by wid? m?rgins. This is m?inly
du? to its strong mo?t (comp?titiv?
?dv?nt?g?) which li?s in its strong Br?nd ?quity ?nd ?n ?xt?nsiv?
Distribution N?twork. Th? comp?ny’s N?t s?l?s, N?t Profit ?nd Book V?lu? h?v?
grown with ? 5 y??r C?GR of 22%, 27% ?nd 28% r?sp?ctiv?ly. ?lso th? comp?ny’s
d?bt is v?ry low ?nd its ROIC h?s b??n 40% on ?n ?v?r?g? ov?r th? l?st six y??rs.
 
K?NS?I N?ROL?C 

K?ns?i N?rol?c holds th? s?cond position in
th? Indi?n P?int m?rk?t, ?nd is th? m?rk?t l??d?r in th? Industri?l P?int S?gm?nt,
owing to its l??d?rship position in th? ?utomobil? P?int s?gm?nt. It is th?
subsidi?ry of K?ns?i P?ints Ltd., th? l??ding J?p?n?s? p?int comp?ny. B?rg?r
p?ints h?s th? third position ?nd d?riv?s its m?jor r?v?nu? from th? D?cor?tiv?
s?gm?nt. ?kzo Nob?l (form?r ICI P?ints) is th? subsidi?ry of th? world’s l?rg?st
P?int Comp?ny ?nd is ?t th? fourth position. Sh?lim?r P?ints is ?t th? fifth
position.
Curr?ntly ?ll k?y
pl?y?rs in th? Indi?n p?int m?rk?t ?r? in ?xp?nsion mod?. ?si?n P?ints h?s ?nh?nc?d
its c?p?city ?t its f?cility in Him?ch?l Pr?d?sh (for powd?r co?tings) ?nd M?h?r?shtr?
(industri?l co?tings) ?nd B?rg?r’s f?cility in J?mmu st?rt?d contributing to
its top lin? p?rform?nc?, ?lb?it on th? low?r sid?. K?ns?i N?rol?c is putting
up ? gr??n fi?ld pl?nt ?t Hosur in T?mil N?du ?nd is c?rrying out ?xp?nsion ?t
its Lot? P?rshur?m ?nd B?w?l pl?nts.
 
PRODUCT R?NG?
Most comp?ni?s h?v? ?n id?ntic?l r?ng? of products
for th? d?cor?tiv? p?int m?rk?t. In th? industri?l s?gm?nt, th? r?ng? is mor?
customiz?d ?nd guid?d by th? t?chnology support provid?d by th? coll?bor?tors.
In th? c?s? of d?cor?tiv? products, th? t?chnology h?s b??n mostly indig?nously
p?rf?ct?d ov?r th? y??rs ?nd th? products c?n b? divid?d on th? b?sis of int?rior
?nd ?xt?rior ?pplic?tions or in c?t?gori?s such ?s w?t?r-b?s?d ?nd solv?nt-b?s?d.
Mor?ov?r, most comp?ni?s h?v? b??n ?dv?rtising th?ir products in th? int?rior/?xt?rior
?mulsions c?t?gory, which h?s ?xp?nd?d th? m?rk?t ?nd trigg?r?d ? shift from
dist?mp?rs ?nd c?m?nt p?int. Whil? solv?nt-b?s?d ?n?m?ls ?r? still popul?r in
Indi?, th?r? is ? cl??r shift from solv?nt- to w?t?r b?s?d glossy ?n?m?ls in
ov?rs??s m?rk?ts, Indi? will t?k? som? tim? to switch ov?r to w?t?r-b?s?d co?tings.
For th? d?cor?tiv? r?ng?, it is difficult for int?rn?tion?l comp?ni?s to s?t
up shop on ? st?nd-?lon? b?sis b?c?us? of ?xisting b?rri?rs such ?s th?
strong n?twork of ?st?blish?d pl?y?rs, br?nd im?g?, r?ng? of products (Indi?n
cont?xt) ?nd r?quir?d distribution logistics.
Giv?n b?low is ? comp?r?tiv? list of v?rious
products of th? m?jor pl?y?rs of th? Indi?n p?int industry.

 

B?rg?r p?ints
h?s cr??t?d diff?r?nti?tion for its?lf in th? m?rk?t by introducing

 

 

 

 

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