Asian

Paints
Prepared by

Mehul
Rasadiya
K.K.Parekh Institute of Management of Studies
POSITION OF PAINT INDUSTRY
IN INDIA

Paint industry in India is estimated to Rs.

135bn.
Unorganized sector accounts to 35% of total
paint market.
Volume growth is estimated at 15%.
India’s share in the world paint market is
0.6%.
Per capita consumption of paint in India is
1.2kg/annum.
Indian market share scenario
Introduction to Asian Paints

• Asian Paints was started in 1942 by four

entrepreneurs:
Champaklal choksey,
Chimanlal choksey,
Suryakant Dani,
Arvind Vakil
• The company was started under the name “ASIAN OIL
& PAINTS COMPANY.”
• Within three years, their turnover reached 3.5 lacs.
• In 1967, Asian paints became the 10th largest paint
company in the world.
 GROWTH OF THE COMPANY

A. 1942-1967: Evolution Phase

B. 1967-1982: Extension and Consolidation Phase

C. 1982-1986: The years of Excellence

D. 1987-1997: Moving Closer to the Consumer

E. 1997-1999: Changing rules of the game

F. 1999: The new Asian Paints

Asian Paints is India’s largest paint company and Asia’s
third largest paint company, with a turnover of INR 54.63
billion.
The group has an enviable reputation in the corporate
world for professionalism, fast track growth, and
building shareholder equity.
Asian Paints operates in 21 countries and has 29 paint
manufacturing facilities in the world servicing consumers in
over 65 countries.
Besides Asian Paints, the group operates around the world
through its subsidiaries Berger International Limited,
Apco Coatings, SCIB Paints and Taubmans.
Vision

“Asian Paints aims to become one of the

top 5 Decorative Coatings companies
worldwide by leveraging its expertise in the
higher growth emerging markets.
Simultaneously, the company intends to
build long term value in
the Industrial coatings business through
alliances with established global partners.”
 OBJECTIVE
1. TO BE THE LARGEST DECORATIVE
PAINT CORPORATION WORLDWIDE
2. IT AIMS TO BE THE 5TH
LARGEST PAINT MANUFACTURING
COMPANY WORLDWIDE
3. TO PROVIDE BUSINESS STRATEGY
FOR ASIAN PAINTS.
4. TO COMPARE THE SAME WITH OTHER
COMPETITORS FOR INDIA CENTRIC
BUSINESS.
ORGANIZATION STRUCTURE
Asian Paints- Today
 CURRENT PROGRESS
Vertical integration has seen it diversify into
products such as Phthalic Anhydride
and Pentaerythritol, which are used in the paint
manufacturing process.
Asian Paints along with PPG Inc, USA, one of the
largest automotive coatings manufacturer in the
world has begun a 50:50 joint venture, Asian
PPG Industries to service the increasing
requirements of the Indian automotive coatings
market.
Another wholly owned subsidiary, Asian Paints
Industrial Coatings Limited has been set up to
cater to the powder coatings segment which is
one of the fastest growing segments in the
industrial coatings market.
Mergers, Acquisitions & JV

Buys Taubmans Paints (Fiji) In September

2003.

Acquires ICI India’s Unit (February 2007).

Sells stake in Australian Unit (June 2007).

Joint Venture with PPG, USA (1999)

Marketing, Sales & Distribution

Rural Marketing Initiatives since 1960.

Distribution is one of the main strategy of Asian Paints.

Advertising & Promotional Expenditure started in 1980s

Advertising Methods- Radio, TVCs, Print, Internet,

Advertisements
•Promotional Expenditure grew
from 15% in 2003 to 21% in 2008
Financial Analysis
NET SALES
Profit after tax
Earnings per share
RETURN ON CAPITAL EMPLOYED
MARKET CAPITALISATION
DIVIDEND
DEBT-EQUITY RATIO
Various plants in India

Asian Plants
Kasna (Uttar Pradesh) in India

Asian Plants
(Rohtak, Haryana)
 Asian Plants
Bhandup (Maharashtra) in India

Asian Plants
Sriperumbudur in India
 Supply Chain
Asian Paints has harnessed the powers of state-of-the-art supply
chain system using cutting edge technology to integrate all its plants,
regional distribution centers, outside processing centers and
branches in India. All the company's paints plants in India, two
chemical plants, 18 processing centers, 350 raw material and
intermediate goods suppliers, 140 packing material vendors, 6
regional distribution centers, 72 depots are integrated.
The supply chain runs through a wide spectrum of functions right from
materials planning to procurement to primary distribution. It has
played a pivotal role in improving operational efficiencies and creating
agile procurement, production and delivery systems. It has also
enhanced the flexibility of operations, lowered output time and
reduced delivery costs, while improving customer-servicing levels and
profitability.
The Supply Chain Management is backed by IT efforts that help the
company in demand forecasting, deriving optimal plant, depot and
SKU combinations, streamlining vendor relationships, reducing
procurement costs and scheduling production processes for individual
factories
 Supply Chain Cycle

350 raw material 2 chemical

& intermediary plants & 18
good supplier processing
centers

140
6 regional
packaging &
distribution
material
centers &
vendors
depots
 Human Resources
Asian Paints believes that people are its strongest
assets
 A company can go only as high as its people aim.

 It is people who innovate and invent, and who engineer

the efficiencies

 It is people who drive growth and lead to greater heights.

At Asian Paints, human resources systems are designed to create a

focused, performance oriented and agile company. A talent pool of
over 4700 employees employed across 23 countries bring in a unique
blend of mindsets and skills.
 Human Resources
Hunt for talent

 Employ people who are best suited to the job and whose
personal goals are in alignment with our corporate purpose.

 Besides encouraging achievers from within the

organization, they absorb the best talent from some of the
best management and technology institutes in the country.

 Cut out task for every individual within the framework of

result-orientation, market insight, customer perspective,
trust, respect and problem solving.
 Human Resources
An open and interactive work culture brings out the best
in the people.

 A sense of ownership and freedom to experiment at their

workplace brings out creativity and innovation in every
individual.

 Excellent training is provided to develop leaders and re-

strengthen competencies from within the organization.
Human Resources
 Industry Analysis: Porters 5 force
Model
Substitutes
1.White cement
2.White wash
3. Brick & stone Structure

BUYERS Suppliers
1. Decorative: Fragmented Existing Rivals
1.Tio2 Imported,
Market. LOW POWER 1. Berger
2.Few suppliers,
2. Industrial: Low 2. GN
switching costs. Corporate 3.Availability of
3. ICI Substitutes of RM Low
have HIGH POWER
4. JNPL HIGH BARGAINING
POWER

Threat Of New Entrant

1.Growth rate much higher than global so global
player may be interested
2. Huge potential to increase per capita consumption.
Thus Latent need exists.
3. Companies can erode into APIL’s industrial
market by forming JV’s.
 Market Share Of The Competitors
Company Industrial Market Decorative Market

APIL 14.50% 37.50%

GNPL 42.50% 10%

Berger Paints 14.20% 11.20%

ICI 7.80% 7.80%

Jenson & Nicholson 8.10% 5.50%

Others 12.90% 38%

Identification Of Focus Area of Competitor

APIL GNPL BPIL ICI JNIL SPIL SNIL

Focus on Provide Increase Increase Leverage
decorative paint shop focus on capacities to on JV for Consolidate Consolidate
Paints and management southern strengthen growth in position in position in
complete services to markets in presence in Industrial architectural Repainting
vacant slots sell solutions India fast growing segments paints exterior
in product rather than architectural paint
range product segments market
Gain
Market share
in auto OEM
through JV
 Overall Corporate Strategy Of Asian
Paints

DISCOVER
Exploit new markets by
DEVELOP
NEW creating products /services
Build new competency to Create
by leveraging the Future
existing competencies
differently

MARKET
OPPORTUNITIES

DEFEND DEEPEN
Defend existing market by
strengthening existing Build Complementary/new
EXISTING competencies competency to fortify position in
Existing Market

Distinctive Competencies
EXISTING NEW
 `DISCOVER:
This forms the basis of fast growth.
AP has identified opportunities abroad in developing countries
similar to India.
To enter into these countries they adopted the process of
acquisition.

DEVELOP:
Paint industry is primarily a product-oriented industry up till now.
Huge potential exists in the service side also.
Introduction of color-world, providing service in painting and interior
decoration etc are steps taken to acquire the whole chain and becoming full
service provider.
Need to Ensure value-adding services are possible. These can be integrated
to provide an umbrella service.
Constant reminders to the customers to repaint, or upgrade.
 DEFEND:
Consists of rural and the urban market in which AP is playing.
They are a target to many global companies, which are playing in
Indian market via Indian arm of their operations like ICI has Berger,
Kansai has JN
DEEPEN:
Industrial segment of Indian paint industry where AP has a weak
presence.
It has a presence in automotive segment but ranks a poor second.
It needs to form alliances with foreign players to enter into this segment.
It can also look for tie-ups with the company, which have tie-ups with
those companies whose daughter arm is operating in India, to lock the
account.
Its move of taking over Haucoplast is one step in this direction. Their tie-
up with PPG has given them a good presence in automotive segment,
capturing clients like Santro, GM, Ford etc
Business Strategy: Asian
Paints
Asian Paints has acquired short-term competitive
advantages by using its distribution strength and
logistical efficiency in order to raise the Cost of
doing business for all its competitors to attain this
advantage.
The advantage is short-lived and ultimately imitable.
Moreover, AP has established such an extensive
network that getting incremental advantage would
be very difficult.
Futuristic approach should be gaining competitive
advantage through channel control or occupying
mind space.
Business
Strategy: Urban Intermediaries have influencing power on the
Market purchase decisions in the urban areas. For
this, there is a three pronged strategy for
increasing demand
1. Use these intermediaries for initiating demand:
• Painters ,Contractors ,Designers & Decorators
2. Occupy part of the intermediary space and try
to sideline other intermediaries:
• Creating a service arm that can cater to a large
market
• Creation of a well-qualified service arm which is
capable of providing value-added services.
3. Try to reduce the power of the intermediary by
increasing the Pull for the product
• By increasing the power of the end-consumer.
• Establishing a strong brand name for its brands.
GATTU: THE
MASCOT
Business Strategy: Rural Market
Rural segment is not mature enough
to appreciate service related
offerings Strategy should be product
related. Customer up-gradation
strategy should be adopted. It should
be implemented in two parts:
1. The penetration of the rural segment
have to be achieved by offering a basic
product well tailored to match the low
willingness to pay of the rural consumer.
2. After basic penetration levels have been
achieved the rural consumer can be
offered a “higher ” range of products
with a view to up grading the consumers.
Business Strategy: International Markets
For the newly Acquired Global
Companies Utilization of the
learning curve effect and the
knowledge base from having
functioned in a developing country
would be the most crucial factor for
growth.
AP can hasten the process of market
growth and maturity in these regions
by leveraging on its experience and
launching newer products at a faster
rate.
 INTERNATIONAL PRESENCE
Today the Asian Paints group operates in 21 countries across
the world.
It has manufacturing facilities in each of these countries and is
the largest paint company in eleven countries.
The group operates in five 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 ten markets, it operates through its subsidiary, Berger
International Limited; in Egypt through SCIB Paints; in five
markets in the South Pacific it operates through Apco Coatings
and in Fiji and Samoa it also operates through Taubmans.
 International Operations

Caribbean Islands Middle East

Barbados, Jamaica, Bahrain,Egypt,
Trinidad & Tobago Oman & UAE

South Pacific South East Asia

Fiji, Tonga, China, Malaysia,
Vanuatu, Solomon & South Asia Singapore &
Samoa Islands. Bangladesh, Thailand
Nepal
& Sri Lanka.
Overseas plants
Berger International Plants
Barbados

Berger International Plants

Jamaica
Berger International Plants
Singapore

Berger International Plants

Trinidad
 ACCOLADES EARNED BY ASIAN
PAINTS ON INTERNATIONAL LEVEL
Forbes Global magazine USA ranked Asian
Paints among the 200 Best Small Companies
in the World for 2002 and 2003.
It presented the 'Best under a Billion' award,
to the company.
Asian Paints is the only paint company in the
world to receive this recognition.
In Nov 2005 and Nov 2007, Forbes ranked
Asian Paints among the Best under a
Billion companies in Asia.
 Future of the Company
Asian Paints is planning to increase the capacity by setting up a plant
at Rohtak, Haryana.
No other company is planning to increase its capacity in the near
future, this will give Asian Paints a competitive advantage in terms of
pricing.
GDP growth slowdown in the growth rate of two important activities
i.e. repaint activity and construction activity will have direct impact on
the volume of APL, thus effecting its profitability and margins.
Rural markets have considerable potential. Companies that can
establish a dealer network, in these markets are likely to get the edge in
positing above par growth rates over the next few years.
As setting up distribution infrastructure is expensive, it would mean
that the competition is limited to the top players.
Due to substantial hike in raw material prices, Asian Paints has raised
the prices of solvent based paints, thus demand would be affected to
some extent