Welcome

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Goodlass Nerolac Paints Ltd

Analyst Meet
3rd May 2005

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Company Snapshot

Head Office Lower Parel, Mumbai

Founded in 1920

No. of Branches 66

Manufacturing Lote, Chennai, Ahm., Jainpur, &

Locations Bawal (Commissioned on 18/3)

Customer Base Over 11500

Employees 1959 (Including Group Cos.)

FY 05 Group 1163 Cr
Revenue FAM 05
 Group Companies

Goodlass Nerolac Paints Industrial, Automotive &

Ltd. Mumbai Architectural Coatings
Nipa Chemicals Ltd. Pre-Treatment Chemicals
Chennai
Chemguard Coatings Ltd. High Performance Coatings
Chennai
Polycoat Powders Ltd. Powder Coatings
Mumbai

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Presentation Sequence
 Performance
 Financials
 Road Ahead

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Performance

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Paint Industry
 Growth expected to be 14% with
Industry size of Rs7750Cr.
 Organized sector doing better with 15%
growth and market size of Rs5400Cr.
 Architectural business benefited by high
growth in housing sector
 Industrial business riding high on
growth in Automobile business

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Revenue Growth-GNP

1200 1069
GR 1 1 . 8 % 925
1000 CA 791
800 684 708

600
400
200
0
2000-01 2001-02 2002-03 2003-04 2004-05

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Industrial Business Initiatives
 Acrylic CED lines
 Export of Acrylic CED
 New Business
 Value Engineering
 Color Centre
 Marketing Cell
 Focus on Job Coating Business for PC
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 Decorative Business Initiatives
 Project Disha- Strategy building exercise
 Focus on Key Segments
 House Hold
 Auto Refinishes
 Wood Finishes
 Large Commercial
 Brand building
 New Advertising films
 Consumer scheme-HDD
 Contractors’ CRM program
 Making channel responsive
 Profitable Mix/ New products

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 Manufacturing Excellence
 Started in August 2003 at Lote & extended to Jainpur &
Chennai in 2004 to set in process of continual improvement in:
 Manufacturing standards
 Employee involvement
 Skill sets of employees
 Using Tools like Six Sigma & TPM
 Resulting into reduction in Factory level losses
 6000 New ideas implemented
 OEE (Overall Equipment Efficiency) introduced to measure
asset utilization led to:
 Reduction in breakdowns by 25%
 Improvement in OEE by 33%

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 Manufacturing Capacity
Location Lote Jainpur Vatva Chennai Bawal
STATE MAH UP GUJ TN HARY
Products Decorative Decorative Industrial Decorative Industrial
Industrial Industrial Industrial PC, PTC

Annual 31000 61000 9000 17000 20400

Capacity MT MT MT MT MT
Certification QS- 9000 QS- 9000 QS- ISO- -
ISO- 14000 ISO- 14000 9000 9002
OHSAS- OHSAS-
18001 18001
Total Installed Capacity 138400 MT
Capacity utilization 03-04 65%
Capacity utilization 05-06 56%( 65% without Bawal)
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 Awards & Recognitions
Award Location Area
Greentech Foundation Award- Gold/ Silver Jainpur/ Lote Safety

NITIE Lakshay 2004- Bronze Supply Chain SCM

DSIR National Award R&D ACED

Best Vendor Awards from: Industrial Consumables

Gabriel, MUL, HMSI, Eicher Motors Marketing
Toyota Motors Nipa Chemicals/ Quality & Cost
GNP
Association of Business Communicators of India Web Site & Certificate of Merit/
(ABCI) Environment Commendation
Report
Desh Bandh Paper (Maya Ram Surjan Trust) Best Visual Impact Goody Vision –
Internal Magazine

India’s Best Managed Company- Corporate Best Managed

Business Today/ A.T. Kearney Company
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Financials

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 Highlights
 Turnover of over Rs1069Cr., up by 16%
 PBT at Rs. 137Cr., up by 55%
 Net Profit at Rs. 92Cr, through improved
performance in all businesses (59%)
 EBIDT of 14.9%, up by 42%
 EPS high at Rs36.05, up by 59% (Effective
increase after Bonus)
 Market Cap of Rs.1350, almost doubled
 Dividend rate 115%

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 Market Cap
1350
1400
1200

1000

800 678

600
400 237
184
200 138

0
'00-01 '01-02 '02-03 '03-04 '04-05

(Fig. In Rs. Crores)

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Demonstrated Impressive Position
(Creating Value for Stakeholders)
Technologically superior coatings
Customers Service
Value Engineering
Employees Individual Development- DC/ Trg.
Creating a positive climate

Shareholders Following standards of CG

Consistent returns

Society CSR activities in select areas

CSR & Environment Reports

Suppliers Joint development/ Research

Reliability Program FAM 05
Road Ahead

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Road Ahead
 En cash on housing growth
 Retain leadership in Industrial & PC
 Enhance Brand visibility
 Reach to Media
 Reach to Analysts
 Reach to customers

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 Growth Drivers
 New Products in Architectural coatings
 Wood finishes business
 Alternate channel for rural marketing
 Brand building
 Influencers’ management & Demand generation activities
 Increase Service Efforts in Industrial business
 Technology leadership
 Ride on ancillary export business
 New lines
 Powder coating business in white goods industry
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 Concerns
 Volatile Growth pattern of Automobile
business
 Rising pressures on pricing from Industrial
customers
 Rising Raw Material prices
 Inflation affecting interest rates

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Outlook
 Industry growth of 10-11%
 Inflationary trends in raw material
prices (R/M)

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Decorative Paints Industrial Paints
Walls  
Automotive Coatings
Interior  
General Industrial
Exterior Coatings

High Performance
Woods Coatings

Metals Powder Coating

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 Nerolac Paints comes to your doorstep
through Nerolac Home Stylers. With
Nerolac Home Stylers you can rest assured
that the painting of your home will be a
hassle free experience.
 Nerolac Home Stylers provides
professional help in providing product
consultancy and color consultancy. It
delivers a high quality job through its
trained and experienced painters under
the supervision of Nerolac supervisors.
Also Home Stylers gives a 1 year warranty
on the job executed by us.
  

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 How Does it Work:
 Contact Nerolac Home Stylers by
calling at toll free number
•He will guide you on the available product range and also suggest a product suiting
your requirements.
• He will be equipped with professional color tool that will help you make a correct
color choice.
•He will suggest the correct painting system to ensure durability of paint.
•He will give you an estimate for the entire painting job and also indicate the
timelines for completing the job.
•He will get the trained and experienced painters to execute the job.
•He will supervise the job from time to time to ensure quality service.
•On completion of the job he will hand over the warranty certificate to you

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Future Prospects….

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Case Facts :
 The Indian Paints industry Rs. 6600 crores.

 Asian Paints –Market Leader( 44% Share)

 Wood Finishes market Rs. 300 crores

1. Solvent-based and Water-based
2. Matt and Gloss
3. Spray-on and Brushable

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Types of Wood Finishes and
their Market Share in India
Wood Finish Market in India
PU

10%
Melamine

48% Alkyd
30%

Lacquers &
Speciality
12% Products

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Water Based PU Wood
Finishes
Advantages : Disadvantages :
 Environmentally safe  Not as durable as

 Brushable Solvent
 Extra training not  More Expensive

essential  Less protection from

 No odour (associated moisture

with Solvent )
 Not hazardous to health

 Does not yellow over time

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Current and Potential
Competition

 Current Competition:
Sheenlac ,Pidilite , Sirca , Linea Coats,
ICA, MRF Tyres

 Potential Competition:
Goodlass Nerolac, ICI Paints, Berger Paints

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Pricing:
Type of Wood Finish Cost to the customer
(Labour+Material)
1) French polish Rs. 10 per square feet
2) Alkyd Rs. 15 per square feet
3) Melamine Rs. 30-40 per square feet
4) PU (solvent based) Rs. 80-120 per square
feet
5) PU (water based) Rs. 120-150 per square
feet
6) Polyester Rs. 200 per square feet
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Thank You

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