The key drivers of the Indian paints industry are urbanization, rising disposable incomes, industrial growth and infrastructure expansion, coupled with the easy availability of housing loans. Government policies and improved regulatory environment has also acted as an additional encouragement for the industry that is expected to grow at an average 15% CAGR for the next few years.

“This is the right time to be in the paint & coating industry that has witnessed good growth. I am very bullish about the future of this segment as I can see a 15% increase in the last few years. We can check the balance sheets of all big companies to see the boom. While earlier the funds for the SMEs sector were limited, now we have better availability of funds as banks are lending openly. The great support came from the Ministry of MSME and the Ministry of Finance particularly during Covid times when our people got emergency relief funds. This was availed by most of the units that were and they got 20% of their existing exposure to them that helped them to stay afloat during the Covid,” said Nirav Raveshia, Past President, Indian Small Scale Paint Association.

Raveshia shared his perspective along with other leading experts at NextGen Chemicals & Petrochemicals Summit 2022 organized by the Indian Chemical News on July 21-22, 2022. The session, ‘Paints & Coatings: The Next Growth Frontier’ was moderated by Tej Dialani, Founder, Organica Solutions.

 “Why are big players looking at the Indian market? They are looking at the country from the perspective that the growth story has just begun to unfold. The government has started billions of dollars in road infrastructure. Every year there is a need for road mark paints and this opportunity exists every year. Housing sector is another big opportunity area where the government has invested hugely. Compared to big companies, it is the small paint companies that identify and cater to the niche segments and niche products. The SME sector supplies coatings to missile companies under Make in India. More than 3,500 units might not be in the limelight but have been doing a great job, added Nirav.

“Indian economy is one of the fastest growing one and there is an immense opportunity for the Indian paint industry. We have witnessed since the last few years that the industry has registered double digit growth and it will continue in the same pattern for the next ten years. Growth is happening not only in architectural but all industrial sectors like powder coating, oil coating, wood finishes, and automobile industry. All sections of the paint industry are registering a good growth,” said Paresh Sakhalkar, General Manager-Sales & Supply Chain, Soujanya Color.

The customers are demanding more and more high performance coatings with the warranties of 10-15 years.  Durability and waterproofing are other two key expectations of the customers. The anti-dust or anti-algal properties are in demand and so are the green products. From the health and safety point of view, all the paint companies have implemented the low Volatile Organic Compounds (VOC) paints and lead free products which are less than 90 ppm. The pigment manufacturers played a significant role in offering alternate solutions such as lead free pigments and hybrid pigments. I am proud to mention that we are a solution provider for the big players who are using such low or zero VOC paints. In the next ten years, all the paint companies are expected to shift from regular paints to low VOC paints,” said Sakhalkar.

 “US and Europe market has saturated and China has been facing its own issues. In the new situation, the whole world is looking towards India for growth. The industry is expected to grow at a CAGR of 15%. Be it small scale companies or the large scale companies, both have progressed well. But the threat is there as the market share has shifted to big players. Earlier it was 50% for each category but now the big players have acquired 70% of the market share with them and are expanding fast. With more spending power, the Indian middle class is now taking the paints as a lifestyle factor and thus we have seen good growth in this segment. 1.5 kg per capita consumption has grown to 4.1 kg and in about 5 years it is going to grow exponentially. In IPA Bangalore, there was a study presented that predicted a Rs 2.5 lakh crore industry by 2028-29,” said Ashok Kumar Gaind, Joint Managing Director, Acro Paints.

“I have always championed the cause of niche segments. They give you more profits than normal products.  At the same time exports are a nice opportunity as India offers a great price parity. We must keep doing the R& D in niche segments and emulate the established models. My advice to fellow members of the industry is that knowledge and expertise gives you good profits and makes you big,” added Gaind.  

“Paints and coatings industry is on a rock solid growth path. The raw material was previously in a bad state due to disruptions in supply chain and delay in shipments during Covid situation. The shutdown of units across the globe, and container shortage had affected us badly. The situation is much better and prices are coming down drastically now. This is due to the less demand in Europe and US as they had given a lot of subsidies during Covid times which have been consumed by now.  The supply chain is coming back to normal. This is a good time for paints and plastic industries,” said Sagar Goel, President, Indian Paint &Coating Association.

“I would like to thank PM Modi for unleashing the changes in infrastructure and manufacturing sector and now many big investors are interested in coming here. This has helped in Make in India. Swedish specialty chemical company Perstorp has invested Rs 1000 crore to set up a new plant in Gujarat to produce Pentaerythritol (Penta). Phthalic capacity has increased and India will soon become the next exporter of phthalic anhydride which we were importing earlier. Meghmani Finechem is setting up a epichlorohydrin production facility. With the demand for paints increasing at the rate of 15% annually, Grasim has increased their investment from Rs 5,000 crore to Rs. 10,000 crore. A lot of action is being witnessed in the industry and it’s an exciting time to do business here,” added Goel.

 The NextGen Chemicals & Petrochemicals Summit 2022 was supported by the leading names of the industry. The platinum partner was Elliot Group. Regulatory Knowledge Partner was GPC. Gold partners of the event included Ingenero, Premier Tech, Carbanio and Deepak Nitrite. Among the associate partners were PIP and Huntsman. The industry partners of the event included AMAI, Croplife India, and ACFI.