Paint Industry in India

The Industrial segment is dominated by the organised sector due to being highly technologically oriented. The industrial paints segment has grown at a cumulative growth of more than 20% over the last 4 years owing to tremendous growth achieved by the Indian automobile sector. However the current scenario is not very encouraging as the Indian HCV, LCV and the premium car market is facing demand recession.

The industrial paint sector is technology intensive. The Indian cost of production is 24 percent more expensive than the international cost. In fact, Indian majors like Asian paints and GNL have embarked on hectic R&D to face the competition and also reduce their cost of production.

The Rs 5,200 million industrial paint market is split into five segment : automotive coatings. high performance coatings. marine paints, powder coatings and coil coatings.

Industrial segment is also the more profitable segment of the industry as compared to decorative paints due to value addition in the form of specialised functions that these paints perform.

Automotive coatings for 2 wheelers and 4 wheelers constitute nearly 50%of the market where Goodlass is the leader. high performance coatings are used in plants for fertilizers, petrochemicals and offshore oil installation where anti corrosive protection is very essential and this market is shared amongst Asian Paints, Goodlass and Berger paints. This segment accounts for nearly 16% of the industrial paint market. Powder coatings for white goods have a 10% market share of the industrial paint market. Marine paint accounts for 8% and other special purpose paints account for nearly 16%

Entry of Maruti watershed for industrial paint segment 

Befor the entry of Maruti, the industrial paint market was sluggish as Hindustan Motors and Premier Automobiles were preoccupied with cost of the paint and not the quality. Maruti set stringent customer service standards by laying emphasis on glossy finish and rust free body. Goodlass was first to seize this opportunity and entered into collaboration with Kansai paints which was the largest supplier of paintsto Suzuki in Japan. Thus in one stroke it was able to control the entire Maruti's bussiness. Thus by ridding piggy back on Maruti, in a few years time Goodalss become the market leader. This promoted other auto manufacturers viz Bajaj Auto, Mahindra & Mahindra, Kinectic Honda and Telco to switch to goodlass beacouse of supperior technology and glossy finish it gave to the automobile.

Sensing the growth potential of this industry Asian paint entered into collaboration with PPG of America and was able to gain contacts from Daewoo & General Motors for their premium range of cars.

The automotive refinishes segment has emerged as a potential segment in the Industrial paint sector. This 5 million litre segment is expected to grow at a rate of 25% per annum if the Indian automobile segment countinues to grow at a rate of 15 %. ICI is the market leader in this segment with a 50% market share. It has set up an autocolour painting and demonstration centre in collaboration with Maruti Udyog in Mumbai and Channai. Asian PPG Pvt. Ltd. is also planning to focus on this segment. Jenson and Nicholson haas tied up with Herberts GmbH of Germony to manufacture automotive refinishes.