History

The history of Indian Paint Industry is as old as the history of the Indian people. The
earliest examples of Indian painting are cave paintings going back to 10,000 B.C. The tradition
of painting in Indian subcontinent grew and developed over time, resulting in a fully developed
and finest style, incorporating the culture and faith of the region and religion. Indian paints
always embrace rich color and clear symbolism, using specific iconography to make religious
figures clearly recognizable.
History of Indian Paint has fascinated culture throughout the years. Color has been the
major attraction for more than 20,000 years. Two anthropologists conducted a worldwide study
of color naming in 1960's. Many languages only contained two color they are the white (light)
and black (dark).Today after all the research and finding we have numerous combination colors
of : black, white, red, orange, yellow, green, blue, purple, pink, grey and brown. Paint is
generally made up of a pigment.
The types of paints available in the market and their utility are:

Acoustic Paint: specially designed for acoustic tiles

Alkyd Resin Paint: good trim, doors, faux finishes and other maximized use areas

Drip less Paint: This paint is thicker and is most suitable for application on ceilings

Latex Paint: good for applicability and it dries much quickly & easier to wash.

One-Coat Paint: It is the more expensive version of the latex and alkyd paints and is
mostly chosen for surfaces that require flawlessness in color.

Primers: paint used in the initiation for all interior paint works.

Rubber-Base Paint: This is best for concrete and bricks.

Textured Paint: If need is to cover any flawed surface in your house get this paint. It
works well on ceilings.

BRIEF INTRODUCTION
There is a phenomenal growth on the housing sector front with rapid urbanization and
availability of easy to secure housing loans which have become the prime drivers of growth in
the decorative paint segment, which comprises 70% of the $2 billion Indian Paint industry. An
average increase of growth of about 10% in the automobile sector contributes to 50% of the
revenues in the industrial paints segment. Paints can be classified as Decorative Paints &
Industrial Paints.

Decorative Paints are usually meant for the housing sector. Distemper is mostly
affordable by all and used in the suburban and rural markets. Interestingly, 20% of all decorative
paints in India are distempers. Indian Paint products are highly in demand in countries of United
States, China, India, United Kingdom, Australia, Pakistan, Hong Kong, Canada, etc forming the
turning points in the Paint Industry of India. The paint products are being governed by FERA
(Foreign Exchange Regulations Act) and MRTP (Monopolies & Restrictive Trade Practices Act),
Indian companies were restricted from enhancing their production capacity. Due to liberalization
there shackles were taken off and the industry expanded. Today manufacturers in India hardly
face any threat from the foreign players. Most of them have deals with global players in terms of
latest technology and markets accessibility.
The Indian paint market in many ways is different from other markets. It has been unique
market when compared to the other markets in the world. India has over more than 50000 paint
shops or outlets. Indian paint company's distribution policy directly cater to more than 25,000
shops and is unlike other industries where companies operate through distributors. Each Paint
company has a large number of depots to service these outlets and a large sales force for this
purpose.

Size Of the Industry

A large number of Paint outlet or shops have automated/manual dealer tinting systems.
Today India has more than 20,000 outlets in operation, probably the highest for any country.
There are only approximately 7,000 tinting systems in China for a market two and half times of
India's size. 30% to the paint industry revenue in India is accumulated from Industrial Paints.
The size of the Paint Indian industry is around 940 million litres and is valued at approximately
$2 billion. The organized sector comprises 54% of the total volume and 65% of the value.In the
last ten years, the Indian Paint Industry has grown at a compounded annual growth rate (CAGR)
of 12-13%.

Total contribution to the economy/ sales

The market for paints in India is expected to grow at 1.5 times to 2 times GDP growth
rate in the next five years. With GDP growth expected to be over and above 7% levels, the top
three players are likely to clock above industry growth rates. There are high volumes of low cost
distempers sold in India, which amounts to approximately 200,000 tons per annum at an average
cost of Rs35 per kg ($0.88) at the present rate.
Top leading Companies

Asian Paints India

Nerolac India Paints

Berger

Dulux India Paints

Shalimar Paints

Latest developments

Indian Paint Industry today is about Rs 49 billion sector which has demands for paints
which is relatively price-elastic but is linked to the industrial and economical growth.

Indian per capita consumption of paints is at 0.5 kg per annum if compared with 4 kgs in
the South East Asian nations and 22 kgs in developed countries.

Organized sector in India controls 70% of the total market with the remaining 30% being
in the hands of nearly 2000 small-scale units.

In India 30% accounts for the industrial paint segment in paint Industry while the
decorative paint segment accounts for 70 % of paints sold in India

Globally, Indian Industrial Paints segment accounts for a major share which indicates that
this segment offers many opportunities for paint manufacturers. In June 2009 with a
recovery in realty sector, the production volumes in the sector have substantially
recovered. In the year 2009-2010 the Production of paints grew by a robust 25.2% during
as compared to a 40 basis points drop in production in the corresponding year-ago period.

As the production of passenger cars is expected to grow by 15.3% in 2010-11 the demand
for automotive paints will continue to remain healthy as sales are expected to grow in
double-digits. And with realty majors launching new projects, construction activity is
expected to gain momentum and generate demand for decorative paints. Rise in demand
is expected to be supported by higher supply as the industry is expected to commission
additional capacity in 2010-11.

ASIAN PAINTS

Asian Paints Limited was established way back on February 1,1942 and today stands as
India?s largest and Asia?s third largest paint company. Asian Paints operates in 17 countries and
has 25 paint manufacturing facilities in the world servicing consumers in over 65 countries.
The company manufactures paints in the category of Decorative, Automative and
Industrial segment. Apart from these the company also manufactures various Acessories like,
Wall Primar, Wood Primer, Putty and Stainers etc. Driven by its strong consumerfocus and
innovative spirit, the company has been the market leader in paints since 1967.
Besides Asian Paints, the group operates around the world through its subsidiaries Berger
International, Apco Coatings, SCIB Paints and Taubmans, Berger International, SCIB Paints
Egypt, Asian Paints, Apco Coatings and Taubmans. Asian Paints operates in 5 regions across the
world viz. South Asia, South East Asia, South Pacific, Middle East and Caribbean region through
the five corporate brands viz. Asian Paints, Berger International, SCIB Paints, Apco Coatings and
Taubmans. In 10 markets, it operates through its subsidiary, Berger International Limited; in
Egypt through SCIB Paints; in 5 markets in the South Pacific it operates through Apco Coatings
and in Fiji and Samoa it also operates through Taubmans.
The company is having its strategically located Indian plants at Bhandup (Maharashtra),
Kasna (Uttar Pradesh) and Sriperumbudur (Tamil Nadu), Ankleshwar (Gujarat), Patancheru
(Andhra Pradesh) and the newly built plant at Rohtak (Haryana). Asian Paints operates in 17
countries and has 25 paint manufacturing facilities in the world servicing consumers in over 65
countries. The company is having stateoftheart supply chain system using cutting edge
technology to integrate all its plants, regional distribution centres, outside processing centres and
branches in India. All the company?s paints plants in India, two chemical plants, 18 processing
centres, 350 raw material and intermediate goods suppliers, 140 packing material vendors, 6
regional distribution centres, 72 depots are integrated.
The company is having a big and experienced R&D team which has successfully
managed to develop Highend exterior finished and wood finishes inhouse, which was earlier
imported into the country. These products are currently marketed under Asian Paints Elastomeric
HiStretch Exterior paint and Asian Paints PU wood finish respectively.
The company is having three subsidiaries viz, Apco Coatings it is a subsidiary of Asian
Paints in the South Pacific islands. The company operates in Australia, Fiji, Tonga, Solomon
Islands and Vanuatu under the brand name of Apco Coatings.
The other subsidiary of the company is Asian Paints Industrial Coatings Limited which
has been set up to cater to the powder coatings market which is one of the fastest growing
segments in the industrial coatings market.
Berger International Limited in November 2002, became a part of the Asian Paints
Group. Today, the name of Berger is synonymous with quality and innovation. BIL has presence
across three regions viz. Middle East, Caribbean and South East Asia.Asian Paints participates in
the Industrial Coatings segment directly, through a 50:50 JV with PPG Inc. of US as well as
through a 100% subsidiary

On the recommendations of Booz, Allen and Hamilton, Asian Paints restructured itself
into Growth, Decorative and International business units and has adopted SCM and ERP
technology. Asian Paints aims to become the 5th largest decorative paint company in the world
Product range of the company includes:
Automotive Paints
Decorative Paints
Industrial Paints
Ancillaries Range of ancillaries like primers, fillers stainers, and a lot more.

SUPPLY CHAIN MANAGEMENT IN ASIAN PAINTS

Paint Industry
Paint industry estimated at Rs. 135bn.
Unorganized sector accounts to 35% of paint market.
Volume growth estimated at 15%.
Indias share in the world paint market is 0.6%.
Per capita consumption of paint in India is 1.2kg/annum.
6. Product Categories

Supply chain of Asian Paints

Headquarters in Mumbai
4 Factories
18 Processing Centres
350 raw material and intermediate goods suppliers
140 Packing Material Vendors
6 Regional Distribution Centre 72 depots are integrated

Elements of Supply Chain 3000 Skus Key Success 4 Plants Factors Flexible Operations 6 Rdc
Rawmaterials Lower Output Time 35 Job Work Low Delivery Centrespackaging Cost Material
77 Depots 500 Industrial 15000 Dealers Consumers
9. Raw material Requirements Paint Industry is raw material intensive with RW being 70% of
production costs. 300 types of raw materials used in manufacturing process The most critical
ones are Titanium Dioxide (TiO2) 30 % Phthalic Anhydride (PAN) 20 % Pentaerythritol(PENTA) 15 %
10. Backward Integration Asian Pain produces PAN and PET (35 % of production costs)
Competitors are importing these parts till now Benefits :Backward integrations immunizes
Asian Paints to the fluctuation in the prices Material is transferred at low cost to Asian Paints
equips the company with the ability to meet sudden surges in demand 1/3rd production is sold
to other companies. This gives strategic edge to Asian paints.

OUTBOUND LOGISTICS
Distribution Network Four manufacturing facilities are supported by Six Regional Distribution
Centers (RDC) and Seventy- seven depots. Each RDC and depot is taken by Asian Paints on
lease and then further assigned to a C&F Agent.
Distributing the Asian Paints products to the 14,500 dealers all over the country. There are 4
depots of Asian Paints in Mumbai and 73 outside Mumbai.

CERTAIN ISSUES
Movement of paints and hazardous goods including raw materials have a series of safety
checks to be adhered to, starting with a material safety data sheet.
All materials transport from factories to the depots is insured through a blanket insurance
policy, which fixes a minimum liability for loss, damage, pilferage or leakage upwards of Rs.
10,000.
Distribution Channel
FAST MOVING GOOD
SLOW MOVING GOODS
(4) Factory
(4) Regional Distribution Center
(77) Depots

(77) Dealers
(14500) Dealers

Product
Professional Premium
Exterior Emulsion (PROPEX)

Professional Acrylic
Distemper (PAD)

Professional Premium
Interior Emulsion (PROPIN)

Professional Exterior
Wall Primer