MANAGERIAL ECONOMICS

KYUNKI HAR GHAR KUCH KEHTA HAI

asian paints

Asian Paints- A flashback.

2008 2007 2004

2006

2005

Presentation Structure
Industry analysis Introduction to the company Company profile Competitors/International operations Growth cycle of the company

Mergers & Acquisitions

Marketing, sales & distribution Supply chain management Financial analysis

Human resource management

Corporate social responsibility Future of the company

Paint Industry
Paint industry estimated at Rs. 135bn. Unorganized sector accounts to 35% of paint market. Volume growth estimated at 15%. Indias share in the world paint market is 0.6%. Per capita consumption of paint in India is

1.2kg/annum.

Introduction to Asian Paints

Started in 1942 by four entrepreneurs:

Champaklal choksey, Chimanlal choksey, Suryakant Dani and Arvind Vakil as 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.

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.

MISSION

TO BE THE LARGEST DECORATIVE PAINT CO. WORLDWIDE AND TO BE THE 5TH LARGEST PAINT MANUFACTURING CO. WORLDWIDE.

Asian Paints- Today

Company Profile

Product Profile
INTERIOR PAINTS.

EXTERIOR PAINTS.
WOOD FURNISHES.

WOOD & METAL FURNISHES.

Competitors
Market Share in India

International Operations
Caribbean Islands

Middle East

Barbados, Jamaica, Trinidad & Tobago.

Bahrain, Egypt, Oman & United Arab Emirates.

South Pacific

South East Asia

Fiji, Tonga, Vanuatu, Solomon & Samoa Islands.

South Asia Bangladesh, Nepal & Sri Lanka.

China, Malaysia, Singapore & Thailand.

Growth Cycle 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 e)1997-1999 f)1999Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Growth Cycle 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 e)1997-1999 f)1999Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Growth Cycle of the company

a)1942-1967 b)1967-1982 Evolution Phase Extension and Consolidation Phase

c)1982-1986 The years of Excellence d)1987-1997 e)1997-1999 f)1999Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase c)1982-1986 d)1987-1997 e)1997-1999 f)1999The years of Excellence Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Growth Cycle 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 e)1997-1999 f)1999Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Growth Cycle 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 e)1997-1999 f)1999Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Growth Cycle 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 e)1997-1999 f)1999Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Mergers & Acquisitions

Buys Taubmans Paints (Fiji) In September 2003.

Acquires ICI Indias Unit (February 2007).

Sells stake in Australian Unit (June 2007).

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,

OOH, POP, Retail Outlets, Seminars, Workshops.

Advertisements
Promotional Expenditure grew from 15% in 2003 to 21% in 2008.

Supply Chain Management

i2 Supply Chain Management to meet changing

demands.
ASHWIN DANI, VICE-CHAIRMAN AND MANAGING DIRECTOR, ASIAN PAINTS (INDIA) LTD, HAS BEEN PRESENTED WITH THE HIGHEST RECOGNITION IN SUPPLY CHAIN MANAGEMENT THE CHEMINOR AWARD FOR 2002 BY INDIAN INSTITUTE OF MATERIALS MANAGEMENT (IIMM).

Diagrammatic Representation of Supply Chain Management

Supply Chain Cycle

2 chemical plants & 18 processing centers
140 packaging & material vendors

350 raw material & intermediary good suppliers

6 Regional Distribution Centers & depots

Human Resources
Majority of employees are hired from premium

management institutes.

Recreational facilities are provided to the employees.

Human Resources

Human Resources
Performance Appraisal:
360 Degree Appraisal. Development Centre.

ECA(Essential Competency

Acquisition)

Other Initiatives:
Taking care of the Employees.

Employee Portal- EGLOO

Financial Analysis
4500

Gross Sales
3360.7 2777.4

Rs. In crore
4059.9

4000
3500 3000 2500 2000 1500 1000 500 0 2025.9

2338.8

2003-04

2004-05

2005-06

2006-07

2007-08

Net Sales

Profit after tax

400

376.6

Profit After Tax (Rs. In crores)

350

300

269.9

250

200

173.8 147.6

187.8

150

Profit After Tax (Rs. In crores) 100

50

2003-04

2004-05

2005-06

2006-07

2007-08

Earnings Per Share

EPS
45 40

39.4

35
30 25 20 15 10 5

28.14 19.58 EPS

(In Rs.)

15.39

18.12

2004

2005

2006

2007

2008

Return On Capital Employed

Market Capitalisation

Dividend Payout Ratio

Debt- Equity Ratio

Debt-Equity Ratio (in %) 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2003-04 2004-05 2005-06 2006-07 2007-08 0.09 0.11 0.11 0.08 0.14
Debt-Equity Ratio (in %)

CORPORATE SOCIAL RESPONSIBILITY

Water Conservation-

Total Water Management Center.

Age Care.

Education.
Other Initiatives.

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.

PAINTERS
Ashish Kapoor Jeet Thakkar Jimish Dedhia

(alphabetically)

Kamal Vora
Kamlesh Dhakad Kapil Jagasia

(08016) (08051) (08052) (08053) (08054) (08055)