Currently at just 4 kg per capita paint consumption and US $44 million worth exports, India presents a huge opportunity for its paints and coatings industry. Coupled with the fast changing scenarios, the market is set to unlock a huge potential for growth of both domestic and global players. To keep up with the pace of pent up domestic demand and compete globally, it would be highly prudent for the MSMEs to adopt innovation and niche product lines for their growth. 

 

“The Indian paint and coating industry is growing rapidly at 13-14% and the big players are growing even at much faster pace. The entry of Grasim Industries into this segment has shaken the industry and led to the change in dynamics at stock market,” says Sagar Goel, President, Indian Paint & Coating Association.

 

“MSME segment that currently holds about 28% of the market share will come down to 22% in the next 4-5 years. MSMEs will not get to enjoy the growth as much as the overall industry. Therefore, the smaller and medium players need to focus on innovation and enter into niche product categories. It is a great challenge to the Indian paint industry because the big companies hold an edge in terms of financing costs and R&D centres. They can buy their raw materials in bulk as compared to the MSME sector. Big companies can change their products from time to time and get them in the right place. With a bigger budget, they can place their products on TV channels and get the premium up there. Comparatively, the MSMEs have their limitations in terms of R&D facilities and showcasing their products. This gap needs to be bridged fast,” opines Goel.

 

Goel spoke at the E-conference on ‘Paints & Coatings: Challenges and Opportunities’ organized by Indian Chemical News on June 17, 2022. The virtual event was moderated by Pravin Prashant, Editor, Indian Chemical News and the E-conference was supported by Agilent Technologies.

 

“In 1995, the per capita consumption of paint in India was 0.32 kilos whereas the global average was close to about 11 kilos and Asia Pacific was 9.7 kilos. With lifestyle change over the last few years, we are currently sitting at around 4.1 kg of per capita paint consumption. However, the consumption in the rest of the world and even in Asia Pacific is much higher. In Asia Pacific, the consumption continues to be 9.5 kg and in the European countries and US the consumption is 13 to 14 kg. The per capita consumption of paints in the US is about 16 kg, Singapore is close to 15 kg, Canada has 14 kg, Malaysia has 12 kg, Thailand has 8 kg, and China has around 7 kg. Even Indonesia is about 4.2 kg while India is currently at 4.0. This is where we have a huge gap which should act as a driving engine for growth,” says Debajit Shome, Group Managing Director, Colourscapes Group.

 

“From the export point of view, India is far behind the countries such as Germany which export paints worth US $3.7 billion, followed by the United States with US $2.4 billion and Japan with US $1.9 million. Even Malaysia is about US $268 million, Singapore at US $74 million. Comparatively, India's current export of paint is only US $44 million. Although the global growth may be about 11% or 12% in terms of value, there's a tremendous potential for India to grow. Construction activities in India and anticipated GDP growth raise hopes for this industry in India,” added Shome.

 

"The coatings and paints industry has been growing at a CAGR of 11% growth in the last five years. As per Frost and Sullivan 2021 report, the total paint industry is currently valued at about Rs. 61,000 crore, consisting of decorative and industrial paints. The decorative paint industry is about 74% or Rs. 45,000 crore which is the dominant segment. Going forward, we expect the industry to grow at about 13% GAGR. By 2025, it is expected to reach Rs. 122,000 crore which is a humongous size.That is the reason we are witnessing so many new entrants who have pledged a lot of big investments. Big guns such as Birla have pledged Rs. 10,000 crore and JSW has also pitched in. As the market size increases, there is a little chance of one player replacing the other. However, at the top bracket, there might be some shift in dominance but the market will continue to grow. The urban market such as tier 2 and tier 3 cities will hold 75% of the market, rest of the share would be in the cities where distribution is an issue," says Dhiresh Gosalia, Chairman & Managing Director, Jesons Industries Ltd.

 

The pigment or colour is one of the most important ingredients for any paint and coating industry and it needs proper attention, says Vipul P. Shah, Managing Director, Vipul Organics Ltd.

 

“Traditionally, Clarion and BASF have been dominating as the largest suppliers for the industry. Blues and Greens were dominated by the Indian companies and Azo pigments, that is reds, yellows and oranges were always the Chinese monopoly. But slowly, this trend is changing and India is emerging as one of the strong quality product suppliers of Azo pigments as well. The traditional Azo pigments are now getting modified for a better performance, be it a good hiding power or bright shade. There are many new developments happening such as basic parameters like good hiding power and high performance pigments are gradually picking up. In India, anywhere successful right now in creating a substitute for the lead pigments. Along with the organic pigments, a lot of things are happening as a replacement of the lead based pigments,” says Shah.

 

“The development of pigments most suitable for a water based system because many paint industries are now looking to replace the solvent system and they prefer an aqueous based water based system. Improvements are strongly happening on the pigments, having their excellent compatibility with the water based system. Indian pigment companies are giving a big fight to the Chinese manufacturers of Azo pigments. India is heading towards the big time manufacturing of Azo pigments and other high performance pigments,” added Shah.

 

While there is a tremendous scope for growth in paints and coatings market, most of it will be experienced by only a few select players due to their deep pockets, says Ashok Kumar Gaind, Joint Managing Director, Acro Paints.

 

Gaind explains his point: “About 74 to 75% of the decorative market is with the big players and together the four of them constitute about 52% of the market. Grasim Industries is going to invest about Rs. 10,000 crore; Asian Paints is investing Rs. 960 crore to expand its Ankleshwar plant; Berger Paints is putting up a Greenfield project near Lucknow, with an investment of Rs. 700 crore; and then Kansai Nerolac is coming up with a new factory near Visakhapatnam.”

 

Emphasizing the need for innovation, Gaind says, “In such a scenario where we are witnessing huge investments by the big players, MSMEs will have to put a big focus on innovation. About 5 years ago, the share of the SMEs was about 35% and now it is down to 26% and in the coming times I foresee that the share would tremendously come down further. To survive and make profits, very specific innovations would have to be adopted by the SMEs. Substitution of raw materials, and replacement of obsolete methods with automation are the keys. Niche paints will be important for them to create 8-9% profits. The anti-virus paints are a big hit. Hygiene paints, hospital paints, anti-dust paints, air purifying paints, energy paints, and roof coating paints pose a huge opportunity that needs to be tapped. As a small player or a medium player, please focus on these things and create a niche for yourself.”

 

“The automotive industry slowed down during the pandemic due to chip shortage. While it aimed at selling 5 million vehicles by 2021, it closed at 3.6 million. Similarly, the two wheeler industry also closed at lower numbers. With the improvement in market scenario, we now expect the growth of this industry at a CAGR of 5% by 2026, with sales touching 4.8 million vehicles. That should give a big boost to the paints segment. We foresee that the coatings and paints industry would do about 15% volume growth by 2025. Specialty raw material inflation has been a challenge and so are the crude oil prices and transportation prices. The industry may witness good top line growth but the bottom line growth might take time,” says Sanjeev Gupta, Head of Technical -GI - Asian PPG Industries.

 

Dr. Soma Dasgupta, Application Engineer GC/MS, Agilent Technologies spoke about the innovative solutions offered for the coatings and paints industry.

 

“When it comes to paint analysis, it has been historically performed for the formulation, reverse engineering, quality control, safety, regulatory compliance, defect analysis etc. and when it comes to art, it is about conservation and restoration in art and archaeology. Manufacturers developing their own products constantly strive to meet the ever increasing demands of the coatings function, performance,and longevity. To cater to such requirements, Agilent has a wide portfolio of instruments used for meeting the test conditions and regulations. Whether it is industrial, architectural or art applications, Agilent has specific solutions to provide answers for most pressing applications, and that's how we help our customers resolve their issues,” says Dr. Dasgupta. 

 

“REACH regulations mandate a large number of compounds to be analysed in all types of chemical materials.  Another regulation called Restriction of Hazardous Substances (ROHS) regulates all the electronic equipment. Since their purpose is to ensure safety and human health, we use LCMS and GCMS solutions to address the potential issues in samples. At Agilent, we have a ready made database and when you move onto the coatings, you will find the instrument which is required to perform this analysis and the set of columns, the set of standards and also the methods and analysis options too readily. It's the same system that can be used as an HPLC for use as an array detector, UV, and then evaporative light scattering,” commented Dr. Dasgupta.

 

“Broadly any sort of analytical testing can be classified into two sections, destructive analysis and non destructive analysis. We are doing an advanced testing in terms of classification, separating them into groups based on their chemical characteristics. We also have software solutions for creating TCA plots. Arrangements for these kinds of systems can be used for analysis of polymers, coatings, composites, bulk material, cleaning verification and even for historical artifacts or artworks. Since it would include a wide range of samples, clients don't have to make any special sample preparation protocols,” added Dr. Dasgupta.

 

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