Paint Industry in India
Raw Material Prices are coming down
The paint industry is a raw material - intensive
one with over 300 input going into the manufacturing process. Half of these are
petro based. The raw materials for paints may be classified into 5 segment---
pigments, solvents, binders, additives and white
cement/urea and account for roughly 50% of total cost. Hence the industry's
profit are sensitive to international price rises. When the international prices
of petrochemical products comes down, the paints companies benefit and vice
versa.
With raw material prices and tarrifs
expected to come down in the next few years the organised sector's operating
profit and margins should go up substantially.
Most companies are hit by the fact that they do not make the raw material
themselves. PAN which is manufactured from Ortyhoxylene and which goes into the
production of paints with titanium dioxide, is only manufactured by Asian
paints. The other paint majors import their stock. Since PAN prices generally
outpace international orthoxylene prices by almost 50% paint Companies end up
paying huge price when the price rise. For instance in Aug 1994 when the price
of Ortyhoxylene shot up form Rs 24/ Kg to Rs 35 per Kg, the Pan prices surged
from Rs 38/Kg, to Rs77/Kg.
Major Raw materials used in the paint production are:
Pigments :
account for nearly one third of the total cost of paint
production. Pigments are finely ground solids of different shades which are used
to give colour, consistency, durability and other properties to the paint. Titanium
di oxide (TiO2) is a vital pigment is available in two grades: anatase
and rutile. Of which the former is used in interiors while the latter is
preferred for exteriors.
Production of titanium di-oxide in India
| Year |
Anatase |
Rutile |
Total |
| 91 |
11,500 |
9,000 |
20,500 |
| 92 |
13,000 |
10,000 |
23,000 |
| 93 |
13,250 |
10,200 |
23,450 |
| 94 |
13,300 |
17,700 |
31,000 |
| 95 |
13,500 |
25,250 |
38,750 |
Source Chemical
Weekly
Fig in Tones Per Annum
The present demand for anatase grade Tio2 is estimated to be
around 12,000 Tonnes per annum and this is expected to grow at 8% per
annum while that of rutile grade is estimated to be around 50,000 TPA and
this is expected to grow at 10% p.a. The paint industry presently imports Tio2
in excess of Rs 1.30 billion and this figure may go close to Rs 2 billion by the
turns of the century.
Demand for anatase and rutile grade TiO2
| Year |
Anatase |
Rutile |
Total |
| 87 |
10,000 |
20,000 |
30,000 |
| 90 |
9,200 |
27,560 |
36,760 |
| 95 |
10,310 |
41,235 |
51,545 |
| 2001 |
15,475 |
61,885 |
77,360 |
Source Chemical
Weekly
Fig in Tones Per Annum
|
