A TRAINING REPORT ON

CUSTOMER RELATIONSHIP MANAGEMEN

A Report submitted in partial fulfillment of the requirements for the award of the degree of BACHELOR OF BUSINESS ADMINISTRATION FROM

Submitted By:

SURYA PRAKASH
B.B.A. (SEM-V) Submitted To: THE CO-ORDINATOR

AISHWARYA COLLEGE OF EDUCATION Jodhpur (Rajasthan)

ACKNOWLEDGEMENT

This is to extend my grateful thanks to all those who have been immensely supportive and acted like a patron at my step, right from the completion of the project.

I am thankful to the management of SNOWCEM PAINTS for having a provision to provide practical training at this esteemed organization.

I also extend my gratitude to Mr. S. K. SWAMI (P.M.) for providing me their valuable time, ideas and resources for my project.

I am grateful to various department of SNOWCEM PAINTS for extending all possible support. Other people who need special mention are the respondents who were very patient and supportive during entire project.

INTRODUCTION
OVERVIEW OF THE PAINT INDUSTRY
A boom in the Indian housing sector, increasing urbanization, easy availability of housing loans and a shift from semi permanent to Permanent housing structures have been driving growth in the decorative Paints segment, which accounts for nearly 75% of the Indian Paint industry. There is seasonality involved in the demand for decorative Paints. Consumption peaks around festive time. Indian paints industry is Rs.15, 000 cror market which has been growing at an average rate of 13% over the last five years. Based on the 11 major economies, the Asia Pacific paint market has been rated at almost 13.9 million tons in 2009, and is forecast to grow by about 7.9%per year in the period to 2014.

THE INDIAN PAINT INDUSTRY

THE MAIN SEGMENTS The industry comprises two main segments decorative/ar chitectural and industrial paints. The decorative/architectural paint segment accounts for 70 per cent of the total paint market while the industrial paint segment accounts for the remaining 30 per cent. The industry is, however, expected to undergo a structural shift towards industrial paints in the next few years, when its share is expected to go up to 50 per cent in line with the global trend. Industrial paints thus holds greater growth potential in the coming years. Actually, with the decorative segment gradually bottoming out, companies are already increasing their focus on industrial paints. Industrial paints are technology intensive. The industrial paints segment can be further classified into au tomotive paints, marine, powder coatings, high performance coatings, and others. Original equipment manufacturers (OEM) of products such as automobiles, furniture and white goods such as refrigerators are prime consumers of industrial paint. The automobile industry accounts for 50 per cent of the industrial paint market. A good part of the demand is from shipping and heavy industry. Navy being the largest customer in shipping.

THE MAIN PLAYERS Asian Paints, Good lass nerolac, ICI (India), Berger, Jenson & Nicholson and Shalimar are the leading companies in the organized sector. The top six manufacturers account for about 80 per cent of the market in the organized sector in value terms. AP is the industry leader, with an overall

market share of 33 per cent in the organized sector. Threat of global competition is minimal in the industry. AP dominates the decorative segment, with a 38 per cent market share. Good lass, a Tata company , is number two with a 14 per cent market share. Berger and ICI have 9 per cent and 8 per cent shares, respectively, in this segment followed by Shalimar, with 6 per cent. Good lass dominates the industrial paints segment, with 41 per cent market share. AP is a poor second here, with a 15 per cent market share. Berger, ICI, and Shalimar are the other substantive players in the sector, with 10 per cent, 9 per cent and 8 per cents hares, respectively. The dominance of Good lass in industrial pa pints is largely there sult of its technical associated with the Japanese paint major, Kansai Paints, which has a 29.5 per cent equity stake in the company. Good lass has a lions share of 70 per cent in the OEM passenger car segment, 40 per cent share of two-wheeler OEM market 2 and 20 per cent of commercial vehicle OEM market. Good lass also holds 20 per cent of the whitegoods segment. The market shares of the five leading companies are shown in Exhibit 1 As already mentioned,

Exhibit :- Market Shares of Five Major Players.

THE COMPANY Asian Paints is Indias largest paints company and the market leader in decorative paints. AP manufacturers and markets a wide spectrum of coatings and ancillaries, which include decoratives, production paints and heavy-duty coatings. The manufacturing facilities of the company for paint products are currently spread over four locationsBhand up, Mumbai, which was established in 1955; Taloja, Maharashtra, where AP established its second unit in 1980;

Ankleshwar, Gujarat, where operations started in 1981; and Patancheru, Andhra Pradesh, where manufacturing started in 1985.Asian Paints offers the widest range of paints in terms of products and shades, as well as pack sizes. Availability of wide range of shades is in fact, one major critical success factor in the decorative paints business. And AP scores high in this factor. AP manufactures and markets more than 2,800 items of paints (SKU).

PERFORMANCE AP has been consistently turning out a good performance over the years. For more than two decades now, it has been the market leader. Besides, the company has also consistently proved its excellence in operating performance. Exhibit 2 gives details of APs sales performance during the last four years. Exhibit 3 gives some other important details of APs performance. AP has set a target of gross sales of Rs 2,100 crore by2003. It aims to be amongst the top ten decorative paints manufacturers in the world by2003 and among the top five by 2005.

Exhibit:- Asian Paints Select Performance Indicators (FY 2000)

APs operating profits stood at Rs 191crore in FY 2000, an increase of 37.7p e r c e n t o v e r t h e p r e v i o u s y e a r . The net profit stood at Rs 97 crore as compared to Rs 77 crore the previous year, higher by 26.6 per cent. Net 3 O p e r a t i n g p r o f i t s h a v e g r o wn a t a CAGR of 13 per cent in last five years ,much higher than the sales

growth of 8.6 per cent profit has grown at a CAGR of 12.7 per cent in last five years. The profit before tax (PBT) stood at Rs143 crore, an increase of Rs 49 crore over the previous year. PBT has grown at a CAGR of 12.35 per cent in last five years. Return on net worth (RONW) improved from 25.2 per cent in FY 1999 to 27.1p e r c e n t i n F Y 2 0 0 0 . R O N W h a s remained close to 25-26 per cent in last five years. R e t u r n o n C a p i t a l E m p l o y e d (ROCE) improved fro m 26.6 per cent in FY 1999 to 35.9 per cent in FY 2000.APs sound marketing has earned it strong brand equity. To quote APs managing director: We have been able to build strong brand equity for our products by focusing on features that are appreciated by customers, ensuring that our products are of high and consistent quality, offering a wide range of shades and packs, and ensuring that our products are available wherever and whenever required, by building a strong distribution system. Its brand Tractor, Ap colite, Uttav, Apex and Ace are well entrenched in the market. And APs logo, Gattu, the impish boy, with the paint tin and brush, symbol is es one of the most recognized and most prosperous mascots in Indian business! All this has earned the company a place among the worlds leading paint manufacturers. AP is the winner of the 1995 corporate performance award by the Economic Times and Harvard Business School Association of India. It actually received the award twice within a decade.

AP STRIKES A NEW PATH IN DISTRIBUTION At the time AP entered the Indian paint business, distribution was the most crucial task for any new entrant. Both physical distribution and channel management posed formidable challenges. The foreign companies and their wholesale distributors dominated the business. The foreign companies appointed a few traders as their wholesale distributors and allowed them to perpetuate a situation of monopoly. Each distributor was assigned a large territory and was given the right to operate as the exclusive channel of the company in the assigned territory. The trade terms were also very liberal. The companies also extended virtually unlimited credit to the distributors. The credit out standings for the supplies made throughout the year were required to be settled by the wholesale distributors only at the year-end, at Dipawalee time. These distributors had neither the compulsion nor the motivation to invest in distribution infrastructure. They were not required to move out to semi-urban and rural areas. They concentrated on big cities where they could make the sales without much investment in distribution infrastructure and market development. Also, they were shutting the door son any new paint company seeking an entry into the business.

In other words, these distributors controlled the paint business and were making it impossible for a new paint company to enter and establish itself n the business. AP sized up the scenario correctly and formulated a unique distribution strategy. In the normal course, a firm entering the industry in this scenario would have opted for the low risk strategy of gaining a limited access to the wholesale traders and be satisfied with a small share

COMPANY OVERVIEW
Snowcem Paints

Type Traded as Founded Headquarters Key people Website

Public BSE: 531890 NSE: SNOWCEMIND 1959 Mumbai, Maharashtra, India T.B. Ruia, MD[1] Official Website

Snowcem Paints Private Limited. Snowcem quality has helped it retain market leadership over the years and has made snowcem a generic name today. The largest manufacturer of quality paints in India. Snowcem economy the most economic option for exteriors and a wide range of products to cater to the need of the ever-demanding customer.

Basic Information
Company Name: Year Established: Business Type: Main Products: SNOWCEM PAINTS PVT LTD 0 Manufacturer Exterior Paints, Powder Paint, Liquid Paints, Interior Paints, Cement Paint, Construction Admixtures, Primers, Surface Preparation Products 101 - 200 People

Number of Employees:

CONTECT US
No 33/1, New Timber Yard Layout My sore Road Cross Bangalore, Karnataka 560026 India Phone Number: 080-26754085/26755202 Contact Name: Mr. K.Y. Chakrapani Exporter status: Would like to begin exporting

COMPANY HISTORY
YEAR EVENTS
1959 - Snowcem India Ltd., was incorporated on 28th January, as a Private Limited Co., promoted by Killick Industries Ltd. And Mr. Geoffrey P. Stevens. Subsequently it became a deemed PubliC

Limited Company on 28th March 1961 under Section 43(A) of the Companies Act, 1956. - The Company started its manufacturing activities at its plant in Bombay with Snowcem cement paint. Snowcem India manufactured and introduced waterproof cement paint for the first time in India and ever since then it has remained the market leader. - The Company also introduced Impermo - a cement waterproofing compound in its early years. During the period between 1963 and 1969, more speciality products, namely Hardcrete, Cemprover, Cemix, Snowfilla and Snowsol were successfully introduced by the Company. 1970 - Sandtex Matt, a liquid exterior finish, was introduced by the Company for the first time in India. Sandtex Matt was already a prime exterior product in Europe and other countries. - Sandtex's introduction was fully supported by the collaborators,in terms of technical and marketing expertise. 1988 - The Company set up a modern manufacturing facility at Gotan, in Rajasthan, right in the heart of the white cement Manu facturing region. 1990 - The Company set up its third manufacturing facility at Gum midi pundi near Madras. - The company manufactures wide range of exterior paint Products which includes Super Snowcem, Sandtex Matt, Cemprover, Snowsol, Impermo, Hardcrete, Cemix and Snowfilla.

1992 - The company was converted into a Public Limited Company by a resolution passed in the Extra Ordinary General Meeting held on 18th March. 1995 - The Company launched an improved waterproof Cement paint -SNOWCEM PLUS and this product has been well received With in the short time of its introduction in the market. - The Company proposes to set up its own Central Warehousing facilities in the Metropolitan Cities, namely, Bombay, Bangalore, Calcutta, Madras and New Delhi where the Company is at present having god owns on rental basis. - The Company made a Public Issue of 29,40,000 equity shares of Rs.10/- each for cash at a premium Rs.90/- per share aggregating to Rs.2940 lacs in June, which has been oversubscribed. 1996 - The Company is manufacturing its products in collaboration with George Lillington & Co. Ltd., U.K. and they continue to provide technologies and formulations for the manufacture and introduction of new products of international standards. - The Company has entered a Technical Collaboration Agreement with George Lillington and Co. Ltd., U.K. for obtaining further technical know-how for the manufacture of Speciality Chemicals. 1997 - Snowcem India Ltd has set up its fourth plant, which commenced production on 20th March, at Sinnar (Malegaon), MIDC, near Nashik, Maharashtra. 1998 - Snowcem India Ltd, manufacturer of exterior paints, is likely to sign an agreement soon with a

UK-based company for manufacturing special products for the infrastructure sector. - The Company has launched new products namely SNOWCRYL XT, an Acrylic Exterior Paint and IMPERMO (LIQUID) an Integral Cement Waterproofing Compound. 1999 - The Company has received ISO 9002 certification for its plant at Gotan, district Nagaur, Rajasthan and Mumbai for its Quality Management Systems. - During May, the Company has entered into agreement with National Securities Depository Limited (NSDL) for enabling the investors to hold and trade in the Company's shares in electronic form. - Exterior paints major Snowcem India is setting up plants in Bangladesh, Nepal and Vietnam in an effort to cash in on the expected boom in construction activities there. - Snowcem had signed an MoU with a German company for a technical collaboration and expected plans to be firmed up by the end of the month. 2000 - The Company has introduced Uni-Gloss, an exterior paint that can be applied on concrete, metal and wood. - The Company has acquired a gold fabrication and atomizer plant from Geekay Exim Ltd. for Rs 50 crore, in an all-stock deal,in its bid to make aforay into gold manufacturing. 2001 - Mr T.B. Ruia has been appointed as the Managing Director effective from 23 January.

- Mr. G.K. Rathi has resigned as Director effective from 14th March. - The Company has acquired 42,500 No. of Equity Shares of Rs. 100/- each of Pelican Paints Limited at a price of Rs. 10/- per share and 3,50,000 No. of Equity Shares of Rs. 100/- each of Killick Halco limited at a price of Rs. 83/- per share, making them Subsidiaries of the Company. - The Company has installed one more Wind Mill of 500KW during the year at Chalkewadi, Dist. Satara, Maharashtra. 2002-Snowcem India has informed to that the Board of Directors in its meeting held on December 26, 2002 has accepted the resignation of Dr R Srinivasan as Director and Chairman of the company tendered vide letter dated December 3, 2002. 2003 - Snowcem India Ltd has informed that Mr. A V Kale Executive Director of the company is ceased to be the Director of the company wef June 04, 2003. 2007- Company name has been changed from Snowcem India Ltd to SIL Business Enterprises Ltd.

Trade & Market

Main Markets:

North America South America Eastern Europe Southeast Asia Africa Oceania Mid East Eastern Asia Western Europe

Total Annual Sales Volume: US$10 Million - US$50 Million

Products

Smowcem relies heavily upon the manufacture of water-based paints. Cement paints for application to brickwork, blockwork and concrete are often supplied in the form of fine powder, to which a quantity of water is added immediately before use. After formation in 1959, the products Impermo, Hardcrete, Cemprover, Cemix, Snowfilla and Snowsol were successfully introduced into the Indian market between 1963 and 1969. In the 1970s, Sandtex Matt, an exterior liquid coating in Europe, was launched and met with notable success. Two new products were launched in 1997 - premium quality Snowcryl XT, a pure acrylic base smooth exterior finish and Impermo, an integral cement waterproofing compound, in liquid form.

1999 saw three new products introduced: Uni-gloss, a multi-surface paint system, Trump, a smooth exterior emulsion paint and Snowplast, an acrylic finishing plaster for interiors. In 2008, having avoided acquisition earlier in the decade, Snowcem launched SnowDecor, a range of texture finish products, as well as the acrylic emulsions Snowcryl and Allrounder. In addition to its manufacturing base in Mumbai, Snowcem has facilities at Gotan, Sinnar near Nashik, and at Gummidipundi near Chennai in Tamil Nadu.

NEW PRODUCT

1. SNOWCEM INTERIOR PAINTS

2. SNOWCEM HARDCRETE CONCRETE

3. SNOWCEM PLASTER

4. SNOWCEM SNOWFILLA ADHESIVE 5. SNOWCEM ACRYLIC EMULSION PAINTS

OTHER COMPANIES VIEW Asian Paints eyes buys; `talking to Snowcem'

Dinesh Narayanan Virendra Verma MUMBAI, April 3
ASIAN Paints Ltd is understood to be in advanced talks with Snowcem India Ltd for a possible takeover. Merchant banking sources said the deal appeared to be "as good as done". A top Asian Paints official on condition of anonymity confirmed that the company was talking to Snowcem for a possible buy-out. He, however, said the main issue of pricing had to be dealt with. The official also said that Snowcem was not the only company the paint major was interested in.

"We are interested in value acquisitions and are looking at other companies too. The main issue in all the cases, of course, is the price," he said. The Managing Director of Snowcem, Mr T.B. Ruia, however, denied that the company was an acquisition target. "We are not talking to anyone. In fact, we are making a couple of small acquisitions in the North-East to consolidate our operations there," Mr Ruia said. The acquisitions were in the unorganised sector, he added. Until now, the unorganised sector had almost a 50 per cent market share in the paint industry. However, the reduction in excise duty to the current level of 18 per cent is slowly giving the organised sector the upper hand. Mr Ruia also said that his company was setting up a joint venture subsidiary with Jenson and Nicholson for product distribution. Talk of Asian Paints acquiring Snowcem has been doing the rounds of the stock market for quite some time, but this is yet to be reflected in the stock prices of these companies. The share price of Asian Paints has been trading around Rs 315 in the last few days, while Snowcem has been trading around the Rs 40 levels. Trading volumes in these two counters have also been normal in the last two weeks. Analysts feel that acquiring Snowcem makes business sense for Asian Paints because the company lacks strong products in cement paints segment. Snowcem is the largest player in cement paints with a 25 per cent market share and has built some very strong brands (Snowcem Plus, Sandtex Matt, etc) in the segment. Asian Paints controls more than 40 per cent of the country's Rs 4,500-crore paint market. Its main strengths are 12,000dealer distribution network, innovative marketing and brand

equity. Goodlass Nerolac follows in market share at about 20 per cent and ICI India at about 15 per cent. The paint market is expected to grow at around 10 per cent in the current year. Currently, decorative paints dominate the domestic market with almost three-fourths share. This is against the trend in other world markets where industrial paints constitute the larger chunk. The industrial paints segment is expected to grow if the economy makes a turnaround. Asian Paints has tied up with US paint major, PPG, to strengthen its product range in that segment.

BERGER PAINTS DEAL TO ACQUIRE SNOWCEM PAINTS BUSSINESS CALLED OFF

OUR CORPORATE BUREAU 28 MAY 2003

Mumbai: The agreement between Berger Paints India and Snowcem India over the former acquiring the latter''s paints business has been cancelled due to differences over the valuation of the deal. NM Rothschild & Sons (India) was advising Snowcem India on the transaction, while Berger India had appointed PricewaterhouseCoopers to conduct the due diligence. The due diligence of the deal was done based on profitability figures of Snowcem''s paints business and its intellectual property rights. The deal ran into rough weather because the two companies could not arrive at a mutually acceptable valuation figure.

In October 2001, the Ruia-owned Snowcem India signed a non-binding term sheet with Berger Paints to sell off its paint business for an undisclosed amount. According to the deal, Berger was to acquire a number of units of Snowcem in Mumbai, Gotan, Sinnar near Nashik and Gummidipundi near Chennai in Tamil Nadu - and the brand, subject to successful legal and financial due diligence. The deal included buying the intellectual property rights to Berger Paints. The Rs 66.89-crore Snowcem India has been able to maintain its leadership status in the exterior paints industry in India for over four decades even with the entry of some heavy competition in the segment. The company has a large distribution network of over 3,000 dealers. However, in the past few years Snowcem has been under severe financial strain and reported a net loss of Rs 11.58 crore in 2002-03. The Ruia-managed Snowcem India has brands like Snowcem Plus, Sandtex Matt, Snowcryl XT, Uni-Gloss, Trumph and the recently launched Sandtex Smooth. The range offers complete exterior solutions across the board and covers every price point. On the other hand Berger Paints'' performance has been good and it registered a net profit of Rs 31.4 crore on sales of Rs 601 crore during 200102. The company has emerged stronger in industrial and auto segments after its acquired ICI India''s motor and industrial paints business in 2001. The Rs 601-crore Berger Paints is the third-largest paints company in India after Asian Paints and Goodlass Nerolac. Berger is also strong in the decorative paints segment and has paints and paint systems for every application - interior, exterior, every surface, concrete, plaster, metal and wood - as well as special applications like water storage. Berger''s brands include acrylic brands like Luxol Silk and Rangoli for interiors, and Weathercoat for exteriors, among others. The company has four facilities strategically located in the East, West and South of India with an installed capacity of 52,000 MT.

Snowcem''s paint business, which includes exterior and interior paints, would have given Berger a significant presence in the exterior paints sector where Snowcem enjoys around 30-per cent market share, and is the largest player. But this deal, if it had gone through, would have adversely impacted Berger''s balance sheet because of the high debt burden of Snowcem even though it would have given Berger a foothold in the export markets of Snowcem India such as Sri Lanka.

Special Feature
HARDCRETE WATERPROOFS AND HARDENS Mass concrete Cement renderings Floor Toppings Pits and basements can be proofed against a head of water with HARDCRETE. Wearing courses to floor are hardened densified and made dustless and resistant to many form of chemical attack encountered in tanneries, garages and other industrial premises. HARDCRETE increase the plasticity of concrete to provide workable mixes with less than the normal amount of water. No deleterious effects are produced. On the contrary, greatly increased crushing strength is observed. Any desired acceleration of the setting time of cement can be obtained with HARDCRETE.