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1. OVERVIEW OF THE PAINTS INDUSTRY • The Indian paints industry is presently placed at Rs. 85.0 billion and has been showing consistent double-digit growth from 1991. The coordinated sector comprises of 65-70% whereas the unorganized sector still controls a huge share of 30-35%. • The growth of the domestic paint industry is attributed to the boom in the housing sector and the strong growth in the automobile sector. The automobile sector has done well over past 10-years with an intermediate growth of 7-8%. The automati sector is likely to grow at 8-10% due to healthful growth in 2-wheeler and car segments. However, the volume growth in the paint industry may not be in line with the automati sector growth, as the amount of paint per vehicle is declining over a period, due to uninterrupted innovations. • Around 70% of the domestic paint industry revenues come from the ornamental segment, whereas the industrial segment constitutes around 30%. In FY05, the devising sector has shown good action with new projects in roads, ports and industrial segments. • The Indian paint industry has a huge potential, as the per capita consumption of paint in India is 800-900 grams equated to 15-25 kg in the produced countries. The domestic paint industry is poised for good growth in the coming years. • The Indian paint industry is governed by 4 major players and is largely dependent on the crude oil prices as most of the raw materials are derived from crude oil. The prices of derivatives of crude oil rose more than crude oil due to the lag effect. Despite the sharp rise in the crude oil prices in FY05, the industry has reported good growth. • The Indian paint industry has grown at CAGR of 10% or 1.5-2.0x GDP growth. With the expected 7-8% GDP growth in FY06, the industry is likely to grow at 10.5-12.0%. • The ornamental segment is likely to do better than the industrial segment. The ornamental segment is likely to grow at 12% whereas the industrial segment is expected to grow by 8 -10%. 2. TYPES OF PAINTS Two Major Classifications of Paints are: • Premium ornamental paints are acrylic emulsions applied for the most part in the metros. The medium range comprises of enamels, standard in littler cities and towns. Distempers are economy productions demanded in the suburban and rural markets • Distribution Network is the key • Nearly 20 per cent of all ornamental paints sold in India are distempers Industrial Paints 3. TECHNOLOGY Dealers and contractors play a very crucial role in the buy decision for paints, as they are major influencers. The town-wise mapping of merchant network is required to see to it increase in the width of the network, that is, number of dealers all over the country; and the depth, that is, to give buyers a better choice of products. The installation of tinting machines has been an necessary initiative in increasing the penetration and helping the dealers to serve the buyers better, while decreasing the inventory costs. This will increase ornamental sale. The latest value-added service being provided by the merchandiser network is the magic eye or spectrophotometer. With the aid of this system, the client may walk in with a shade in mind and walk out with the paint within minutes. The machine may conjure up 60,00,000 dissimilar colours, as numerous as the naked eye may detect. This goes with commitment to provide technical breakthroughs to buyers and will unquestionably give the buyers an edge in the market. 4. PAINTS MARKET OF INDIA • Organized Sector may be divided into 2 distinct segments - Industrial Segment growing at 15% (US$ 230 million) - Architectural Segment growing at 8% (US$ 500 million) - Distribution - Brand Image - Range of Products - Access to technology - Technical Servicing - Brand equity of present players - Distribution network - Cost of modification of merchandise 4.1 Market Segment 4.2 Architectural Sector Composition 4.3 Architectural Sector Features 4.4 Industrial Sector Composition 4.5 Automotive Sector 4.6 Powder Coatings 4.7 High Performance Coatings 4.8 Growth Areas for the Indian Paint Industry 4.9 New Developments 4.10 Tinting Machines 4.11 Market size - Organized Sector – 55% - Unorganized Sector – 45% 4.12 Key Domestic players in Branded paints 5. EXPORT OF PAINT & ALLIED PRODUCTS (i) India’s Exports-Segment wise: India’s exports of paints and allied merchandise in the year 2005-06 registered a growth of 30.10 per cent over the former year when the same reached a level of Rs. 3,739.35 crore as versus Rs. 2,874.22 crore. Segment wise export trend for the duration of the amount of time 2003-04 and 2005-06 shows that the segment “Synthetic organic coloring matter, whether 6 or not clinically defined” proceed to dominate exports, and in the year 2005-06, this segment showed a growth of 32.16 per cent over the former year when the same reached a level of Rs. 2,896.37 crore as versus 2,191.64 crore. The other segments showing a significant growth for the duration of the amount of time included: Prepared driers (589.74%), Glaziers’ putty, grafting putty, resin cements, caulking compounds and other mastics (275.68%), Pigments Including metallic powders and flakes) dispersed in non-aqueous media in liquid or paste (140.76%), Artists. Students or signboard painter colours, modifying tints, amusement colours and the like (132.92%), Paints and varnishes (including enamels and lacquers) based on synthetic polymers or chemically modified (110.64%), Prepared pigments, opacities, and colours, verifiable enamels and glazes (71.82%), and Color lakes; preparations based on color lakes (64.23%). On the other, the segments registered a steep decline for the duration of the amount of time included: Paints and varnishes including enamels and lacquers (based on synthetic polymers or chemically altered (50.98%), and Other paints and varnishes (including enamels, lacquers and distempers (26.75%). (ii) India’s Exports-Country wise: Country wise exports trends, shows that USA proceeds to be the biggest market for India’s exports of paints and paints-based products, and had registered a growth of 30.10 per cent in the year 2007-08 over the former year when same increased to Rs. 559.78 crore as versus Rs. 404.86 crore in the former year. The other countries showing a robust growth for the duration of the amount of time included: Iran (133.31%), Kenya (117.03%), UAE (54.39%), Malaysia (38.57%), and Netherland (27.20%). On the other, the countries registering a steep decline for the duration of the amount of time included: China (26.62%), Italy (21.28%), France (19.90%), and Germany (16.09%). 6. FUTURE OUTLOOK • Demand for paints from new housing is expected to constitute approximately 30 percent of total demand; the rest comes in from repainting, primarily after the monsoon rains and before the festive season. This is a function of disposable income, so betterment in rural incomes will boost the growth in the paint sector. Lending originations carry on to make it having little impact for a buyer to gather up the finances necessitated to buy homes. • Within the ornamental coatings segment, significant growth is being observed in the exterior coatings segment. Paint makers have launched premium merchandise in this category, which are doing well due to superior quality and durability. 7. CONTACT FURTHER DETAILS: Web: http://www.siddhimanagement.com Disclaimer: Some of the info is from published roots and it may have changed over a amount of time of time.SMC/Siddhi Management Consultants does not own any obligation for the facts noted in this report. THANK YOU! Most helpful customer reviews 0 of 0 people found the following review helpful. 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