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RAW MATERIALS
Paint is a raw material intensive industry. It takes over 300
different raw materials to produce paint, most of which are
petroleum-based. Titanium dioxide is the largest consumed
raw material.
It constitutes approximately 30% of the total manufacturing cost. Besides this, there are petroleum-based raw
materials, which constitute 40-50% of the total raw material consumed. Hence any movement in crude oil prices
impact prices and profitability in the paint industry.
PRODUCT CULTURE
Most companies have an identical range of products for
the decorative paint market. In the industrial segment,
the range is more customized and guided by the technology support provided by the collaborators. In the
case of decorative products, the technology has been
mostly indigenously perfected over the years and the
products can be divided on the basis of interior and
exterior applications or in categories such as water-based and solvent-based.
Moreover, most companies have been advertising their
products in the interior/exterior emulsions category, which
has expanded the market and triggered a shift from distempers and cement paint.
While solvent-based enamels are still popular in India,
there is a clear shift from solvent- to water-based glossy
enamels in overseas markets, India will take some time to
switch over to water-based coatings.
For the decorative range, it is difficult for international
companies to set up shop on a stand alone basis because of
existing barriers such as the strong network of established
players, brand image, range of products (Indian context) and
required distribution logistics. Therefore, the safer route has
been and will be to tag along with existing companies.
For industrial products, however, this may not apply and
based on their tie-ups in home countries and their original
equipment manufacturer (OEM) customers, the required
range can be produced and sold.
There is, however, room for niche players, with radical
and unique ranges of products properly conceived and marketed in the Indian context and supported with machines.
One more concept that is being adopted in India is the
use of eco-friendly paints. Conventional paints have more
than 1,000 chemicals and substances such as formaldehyde and benzene. These chemicals may lead to health
problems. Low level exposure to paint, based on lead-based pigments may irritate or burn the eyes, nose, throat
and skin and cause reactions such as headaches, dizziness
or nausea while high levels of exposure to some of the elements in paint, even for a short period, can cause severe
and lasting impact such as kidney or liver damage or respiratory problems.
Some of the paint companies have proactively worked
towards the elimination of lead-based pigments and have
substituted non-toxic raw materials.
Thus eco-paints are non-toxic with low VOCs, have no
odor and can be tinted to any color with non-toxic tints.
They are produced from fewer than 250 chemical components and more than 98% of these chemicals are derived
from plant sources and minerals. The raw materials are
also low in toxic substances, renewable and feature a low
environmental footprint.
MARKET PROFILE
The leaders in the organized paint industry in India are
Asian Paints with over 40% market share, Kansai Nerolac
(20%), Berger Paints (19%) and AkzoNobel (12%).
Asian Paints is a market leader in the decorative segment while Kansai Nerolac dominates the industrial and