Sectoral Capsule-Indian Paint Industry - New Colours of Success
India is one of the major participants in the global paints and coatings industry. It stood at USD 4.79 billion in 2012. The industry is growing at a CAGR of 13 percent for the last five years.
The size of the industry in volume terms is 3.1 million tones, with decorative paints at 2.4 million tonnes and industrial paints at 0.7 million tonnes.
The current per capita consumption is 2.57 kg, which is far lower than that of global and Asian per capita consumption of 20 kg and 5 kg, respectively. Hence, there’s a huge opportunity in the country and the industry is expected to continue with double-digit growth from 2013 to 2017.
The paint industry is expected to grow at a CAGR of 14 percent to reach over USD 9 billion by 2017 with per capita paint consumption expected to increase to over 4 kg.
In India, contribution of decorative paints is about 71 percent while industrial paints account for the remaining 29 percent. Both the segments have been showing robust growth in the last few years. The demand in tier II and tier III cities is also growing and, in fact, it growing at a faster rate than the tier I cities. The better-than-expected monsoons could have had a positive influence on the rural market.
There is a perceptible shift towards usage of organic pigments in premium paints with heavy metal pigments being phased out. Companies which adapt to these trends could grow successfully in the paints market. Low household consumption on paints in India, compared to other developing regions, offers high growth potential of the market.
Increased levels of income and education, increasing urbanisation, development of the rural market and arrival of many innovative products have given us enough reasons to be buoyant about the industry.
The capsule reports are concise information about the industry; and the opportunities & challenges that it carries. It gives the past as well as the future prospects of the industry with a forecast for next five years. It also examines the diverse segments of the industry with all relevant inputs in place. The dynamics that propel the sector, namely, opportunities, competition, infrastructure investment and regulatory policies are also explored in the report.