PAINT INDUSTRY

INTRODUCTION y Industry origin and growth:-

The earliest paint factory in India dates back to 1902, when Shalimar Paints, Colour& Varnish Company, A Pinchin Johnson unit, was established at Calcutta. Growing industrialization, expansion of the railways and introduction of electric power a couple of years earlier had all kept business confidence soaring high. However, this did not provide a ready and expanding market for the nascent paint industry then. Imports from Britain continued to swarm the market and raw materials were not easy to come by. The industry still consisting of one lone unit went through a rather prolonged period of infancy, till the World War II brought in dramatic opportunities. With the stoppage of imports owing to war conditions, the domestic market at last became almost the exclusive reserve of the domestic industry. European manufacturers, hitherto exporting to India, readily saw the advantages of setting up manufacturing facilities here. The period between the wars thus saw the greatest ever influx of foreign paint companies into India- Goodlass Wall (1918), Elphant Oil Mills (1917) in Bombay, and British Paints, Jenson & Nicholson and Macfarlances in Calcutta. Macfarlanes was brought over by the Poddars and became a completely Indian company, while the other three: Shalimar Paints (Pinchin Johnson), British Paints and Jenson Nicholson continued as British operated units. While talking about the post independent development of the Paint industry in India, mention must be made of Asian Paints, a completely Indian unit which started on a very small scale, grew so big and so beyond recognition over the years that it is today not only the largest unit in India but way ahead of the second largest, Kansai (Goodlass) Nerolac Paints Ltd., formerly a unit of Goodlass Wall (UK). Besides Asian Paints, numerous factories, wholly Indian in ownership and with rare exceptions in technology as well were set up in Calcutta, Kanpur and Bombay. The British units, though a few in number, were technically strong and financially sound and, with the active support and patronage of the Government, controlled a vastly higher share of the market. The post independence period witnessed a steady growth in the paint industry. From a mere Rs.200
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million turnover in 1950, the paint industry crossed the Rs.14000 million mark in 1990-91. But even in this period, paints were considered a luxury item. Only people with high incomes were expected to decorate their houses with the use of paints. Paints, as a protective element, were totally unheard of. The industrial segment, which was traditionally a low user of paints, visà-vis its counterparts in the decorative segment, too contributed to this notion. In line with this misconceived notion, the government drastically increased duties on paints in the early nineties with an aim to bolster exchequer revenues. The result was obvious. This inevitably brought about a downturn in the fortunes of the industry. The products, which are highly price elastic, saw a negative growth rate of 20 % in 1991-92. The next year was also not good, registering a growth of only 2%, bringing it back to the 1990-91 level, thus corroborating the fact that the industry needed lower excise levels to grow. The industrial slowdown during that periodalso did not help matters. In line with the liberalized policies and the realization that paints are not necessarily a luxury item, duties were progressively reduced from 1993-94. This squared growth as most companies passed on duty reductions. Further, the entry of world majors in the automobile and white goods market in India since 1993 helped the market to expand. Demand for auto paints shot up suddenly. Form a modest 8% growth rate in 1993-94, paint demand touched 12% in 1995-96. Rapid industrialization and improvements in the infrastructure such as transport, energy and communication during the last decade gave a further fillip to the growth of the paint industry. Aided by Government¶s liberal policy of technology import, the automotive and consumer durable segments expanded phenomenally, with a flurry of foreign collaboration. Increased demand for decorative, protective and functional coatings was a natural fall out, which brought, in its stride, a host of indigenous developments as well as the injection of new technology.

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History:-

Paint has been used by mankind since its origin. The evidence can be found in the cave paintings. The Chinese are considered to be the pioneers of manufacturing paints thousands of years ago. In modern times paint is made artificially and is used in many different ways. There are three basic things required to make paint. You need a · want· Binder to hold the paint together · Pigment to get the exact color you

Thinner so that it can be applied easily.

Types of PaintsThere are different types of paints available today. Till the 19th century the word paint was used to describe oil-bound types only. The paints bound with glue were called distemper. For farmhouses and cottages an alternative was found and was called lime wash or color wash. Different things need different paints. The interior of the house is painted by different type of paint than the exterior of the house. Automobiles use different type of paint. The industrial paint is different than marine paint. Now colors are made by using different ingredients for specific surfaces. For example enamel paint, when dries it becomes especially hard and usually has glossy finish. The term enamel paint today means hard surfaced paint and usually it is used in reference to paint floor coatings of a gloss finish or spray paints. It can be used for concrete, stairs, porches and patios. Fast dry enamel is ideal for refrigerators, counters and other industrial finishes. Hightemp enamel may be used for engines, brakes and exhaust. Enamel is also used on wood to make it water resistant. The Indian Paint IndustryIn India, Indian Paint industry¶s total market size is US$1400 million. The organized sector of the industry is 55%. The 45% unorganized sector has about 2500 units. The big players and their market share-value of the organized sector are· GoodlassNerolac 15.9% · Berger Paints 13.8% · ICI 11% · Asian Paints 37% ·

Jenson & Nicholson 5.7%

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·

Shalimar 4% ·

Others 12%The market segment is divided into two sectors.· Industrial 30%The total volume of the market is 600,000 MT. INDUSTRY ANALYSIS

Architectural 70%·

Government rules and regulations Govt take steps to resolve paint industry crisisDecember 11, 2008 (India) Government has announced several relief measures to support the paint industry from time to time, which has been representing that paint exports have been affected by the global recession. Steps taken by Government to help and improve paint industry include the following:

(i) The Technology Upgradation Fund Scheme (TUFS) was launched to facilitate the modernisation and upgradation of the paint industry both in the organised and unorganized sector. The Scheme has been further fine tuned to promote the rapid investments in the targeted sub-sectors of the paint industry. The cost of machinery has been further brought down by reducing the customs duty on imports.

(ii) To provide the paint industry with world-class facilities for setting up their paints units, meeting international environmental and social standards, a Public-Private Partnership (PPP) based Scheme known as the ³Scheme for Integrated paint (SIP)´ has been introduced in August 2005.

(iii) In 2004-05 Budget, the entire paint sector, except for man-made and filament yarn was provided optional exemption from excise duty. In 2005-06 Budget, Central Value-added Tax (CENVAT) on Polyester Filament Yarn has been reduced from 24% to 16%. These modifications in fiscal levies aim at attracting more investments for modernization of textile sector.

(iv) To facilitate import of state of the art machinery to make our products internationally competitive in post quota regime, in 2005-06 Budget, the customs duty paint machinery has
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been brought down to 10% except for 23 machinery appearing in List 49, which attracts Basic Customs Duty (BCD) of 15%. The concessional duty of 5% continues to be at 5% on most of the machinery items.

(v) Government has launched the Debt Restructuring Scheme w.e.f. Sept., 2003 with the principal objective to permit banks to lend to the paint sector at 8-9% rate of interest. (vi) Government has allowed 100% Foreign Direct Investment in the paint sector under automatic route.

(vii) Government has de-reserved the readymade garments, hosiery and knitwear from SSI sector so that large-scale investments may be encouraged in these sectors.

(viii) National Institute of Fashion Technology (NIFT) has been set up to provide the leadership role in sensitizing the Industry to the concept of value addition by inducting trained professionals to manage the industry. This has resulted in an increased demand for trained professionals in various sectors servicing the industry.

(ix) A series of relief measures to paint exporters such as enhanced DEPB & Duty drawback rates, reduced ECGC premium, subvention on credit rates, refund of service tax paid by exporters on various services etc.;

(x) Apparel Export Promotion Council (AEPC) has established Apparel Training Design Centres (ATDCs) throughout the country to cope with the requirement of skilled / semi-skilled manpower for the paint industry.

This information was given by the Minister of State for Textiles, Shri E.V.K.S. Elangovan in a written reply in the RajyaSabha yesterday.

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y Opportunities y Fiscal incentives provided by Government.SWOT ANALYSIS:- y Strengths y Imp of brand image as barriers to new entrants y Good technology backup. y Weakness y Raw materials ± scarcity y Requirement of high working capital y Real estate in a depression phase. y Commodity to fmcg y Rise in disposable income y Threats y Foreign companies entering as sole players BERGER PAINTS 6 .

There will be more options like ranges of colors/finishes for wood applications through the tinting machines. the trend towards water-based coatings is likely to set in both for industrial and decorative applications. As for the future. new construction in the housing segment and improving infrastructure throughout the country. some for application in special areas. The Indian automobile industry has been performing remarkably well and will benefit the market leader in the segment. new associations. Companies will be increasing the value added services available to customers by offering a variety of finishes through specialized and trained applicators.Industry present & future trends:- The Indian paint and coatings industry is riding high on the growth in the Indian automobile industry. consolidation of industry and poor performers getting out of the market. exclusive retail chain stores sponsored and run by Indian paint companies will become a reality. GoodlassNerolac. recording a growth rate of 35% last year. GDP growth projections of six to 6. it is safe to predict a nine to ten percent growth rate for the Indian paint industry in the next five years. Consumers can look forward to new product launches. BERGER PAINTS 7 . the industry has predicted a CAGR of eight to nine percent for the next five years compared to last year¶s growth levels of 27. Thirty percent of the paint business is comprised of new construction projects.4% for cars and 8. As a result of the overall health of India¶s economy. The growth will be 12-13% in the industrial segment and eight to nine percent for decorative paint.9% for two wheelers. While India has not yet embraced the DIY concept as cheap labor is still available.5% in the current year mean a growth of nine to ten percent in Indian paint business. new innovative products. The Indian housing industry is likely to do well in the current year as well. in the years ahead there will be only four or five key players operating in the Indian paint market. The Indian paint industry has progressed well and moving ahead is likely to be influenced by several factos including new technologies. Additionally. Ultimately.

BERGER PAINTS 8 .7% y Shalimar 4% y Others 12% The market segment is divided into two sectors. y Architectural 70% y Industrial 30% The total volume of the market is 600.000 MT. The 45% unorganized sector has about 2500 units. Indian Paint industry¶s total market size is US$1400 million.Major firms in an industry :The Indian Paint Industry In India.8% y ICI 11% y Jenson & Nicholson 5. The big players and their market share-value of the organized sector are y Asian Paints 37% y GoodlassNerolac 15.9% y Berger Paints 13. The organized sector of the industry is 55%.

7% Asian Paints. Others. GoodlassNerolac has 16 per cent while Berger Paints has 14 per cent share.MARKET SHARE The overall organized sector market share is shown in the following graph. 37% ICI.1 BERGER PAINTS 9 . 12% Shalimar. 11% Berger paints. Asian Paints leads with a market share of 37 per cent. 15. 4% Jenson and Nicholson.8% Goodlass Nerolac.9% FIGURE 4. 13. 5.

ICI¶s share is lower at 8 per cent I. fast track growth. While Asian Paints and Berger have a market share of 14 per cent each. competition in industrial paints is increasing.2 billion (around USD 680 million). one of the earliest entrants to take a lead. with a turnover of Rs 30. The company has an enviable reputation in the corporate world for professionalism. and building shareholder equity. Asian Paints has been consolidating its market leadership over the last six years and now has the biggest slice of 37 per cent of the market for decorative paints in the organized sector as shown in on the next page. the market shares of most of the major players have been stagnating over the last few years. Asian Paints operates in 21 countries and has 29 paint manufacturing facilities in the world servicing consumers in over 65 countries. ASIAN PAINTS:Asian Paints is India's largest paint company and the third largest paint company in Asia today. Asian Paints is a great marketing success in a branded consumer product business. On the other hand. The company succeeded where others failed in three areas: BERGER PAINTS 10 . Other major players from the organized sector include Jenson & Nicholson with a low 6 per cent and ICI with 8 per cent. Though other players trail behind GoodlassNerolac by a wide margin.The leader in the high volume medium and mass segments of decorative paints. GoodlassNerolac dominates the market for industrial paints with an impressive share of 43 per cent of the market as shown in the following graph. Trailing behind are GoodlassNerolac and Berger Paints with market shares of 13 per cent and 11 per cent respectively. With the exception of Asian Paints. This was primarily due to extensive focus on urban markets and neglecting the high-potential semi urban and rural markets.

And finally. It is regarded as a very important measure because it reflects the productivity of the risk capital employed in the firm. emulsions) to suit different pockets. branded Utsav. the company introduced a synthetic distemper. distempers. the company introduced as many as 151 shades in its Apcolite range when the competition was offering a maximum of 40 odd shades. Today it has direct dealers in 3. a variety of shades and a wide range of paint types (enamels. point of sale publicity and product demonstrations to consolidate and expand markets. the company came out with plaster distemper. It set up an extensive national distribution network to tap demand in smaller towns. In fact.200 towns and 10.First. This ratio measures sales per rupee of Investment in fixed assets. And as recently as in 1992. it understood the requirements of the Indian paints market better than the MNCs which did not bother to respond to local consumer needs. It can be seen BERGER PAINTS 11 . This opened up a huge market and today distemper accounts for 25% of the decoratives market in volumes and 15% in value. It measures the profitability of the funds invested in the firm. Secondly. This ratio is defined as profit after tax divided by the shareholders fund. Investments were also made in computer technology to ensure up-to-date information interface between the marketing and production sides of the business. to suit the needs of the mass market for a product that was much cheaper than costly emulsions but much better than the widely used whitewash and crude powder distempers. in the sixties.a high ratio indicates a high degree of efficiency in asset utilization and a low ratio indicates inefficient use of assets. the company has played a pioneering role in expanding the Indian paints market by identifying high demand potential areas and then tapping them to maximum effect. the company has displayed considerable savvy in its advertising campaigns.000 stockists. It measures the efficiency with which the Fixed Assets are employed. aimed at the same rural and low income urban markets. Thus. dealer relations. in the highly competitive market emulsions segment. It was the first to introduce small pack sizes. Tractor. The strategy paid off and Asian Paints today commands a 40% share in this segment.

it went public in the same year and established itself as GoodlassNerolac Paints Ltd. the company is the only significant producer of CED (cathodic electro-deposition) primer. In auto paints. three British companies merged to formulate Lead Industries Group Ltd. which produces 300 cars a day. II. was known as Goodlass Wall Pvt. with technical know-how from its Japanese promoters. It is among the oldest paint companies of the country and the undisputed market leader in industrial paints. Kansai Paints.. the market share of Goodlass is now estimated to be around 50% with a 90% share in passenger cars. with a 43% share of this segment. acquired entire share capital of Gahagan Paints in 1933 and thus. at Bombay. GNPL supplies 90% of the requirements of MarutiUdyog Ltd. Right now. The company has a tie-up with Nihon Toshuku Tokyo of Japan for sophisticated coatings for BERGER PAINTS 12 . Goodlass Wall (India) Ltd. In 1957.passenger cars and light commercial vehicles (LCVs) account for 60% of the company¶s auto paint sales. KANSAI NEROLAC (GOODLASS NEROLAC):It was established in 1920 as Gahagan Paints and Varnish Co. Ltd. Also. intermediate and top coatings as well as auto refinishes. antirust coatings. Goodlass is the only company offering a complete automotive paint system comprising pre-treatment chemicals. Subsequently. The rest comes from heavy trucks and two wheelers. Goodlass Wall (India) Ltd. Goodlass Wall Pvt. by 1946. It is a dominant player in the auto paints market which accounts for around one-third of the industrial paints segment.form the graph that this ratio is increasing for Asian Paints indicating good asset management. 40% in two wheelers and heavy trucks. 60% in LCVs.)Ltd. primers. In 1933. was born. In 1930. GoodlassNerolac paints¶ strength comes from the higher end of the auto paints market . Ltd. Ltd. grew popular as GoodlassNerolac Paints (Pvt. Lead Industries Group Ltd.

It is the second largest coating company in India with a market share of over 20% and also the leader in powder coatings. The company is particularly active in the powder coating segment and is a supplier to most OEMs in the white good segment.000 dealers. USA for heavy duty coatings. GNPL is pursuing business opportunities with car majors planning to enter the country. The present human asset consists of over 2000 professionals and a sales turnover of 1226 crores. With its thrust shifting to industrial coatings. in 2006. The Country's third largest paint manufacturer. Tendor NV of Holland for powder coatings and Valspar Corporation. with its Headquarters in Calcutta. III. GoodlassNerolac Paints Ltd. Special software. spread across the country. Being an ISO 9001 company its quality products have attained instant and worldwide recognition. and continues to meet quality requirements that are demanded today even in the domestic market. It recently tied-up with Dupont. BPIL has technical tie-ups with Herberts. The performance of this company is anchored today in a wide variety of Decorative and Industrial paints which continue to gain an increasing share of the highly competitive Indian paint market. a subsidiary of the German pharmaceutical major Hoechst for automotive paints. Berger controls a distribution network comprising of 66 stock points and approximately 10.840 metric tons at its existing plant. Recently. a computerized mixer tinting machine in technical collaboration with Ital Tinto of Italy. it introduced Color Bank. BERGER PAINTS:Berger Paints is the culmination of over seven-decade process of evolution and growth that began in 1923. Having lost Daewoo¶s Cielo contract to Asian Paints. Tintovision installed in the Color Bank BERGER PAINTS 13 .automotive and industrial sectors. Changed its name to Kansai Nerolac Paints Ltd. the company is expanding its powder coating capacity from 840 metric tons to 1. Its growth has been closely linked with the business and industrial development of modern India. USA for supplying automotive paints to DuPont¶s clients in India.

Brunner Mond& Co.Prolinks is Berger Paints' response to a market environment that is increasingly driven by technology and calibrated by expertise. ICI INDIA ICI India was the subsidiary of the $15bn British multinational company ICI Plc.Prolinks is aimed at placing the initiative in the hands of builders. GoodlassNerolac -17-Paints and Berger Paints. Brunner Mond& Co. site inspection. (India) was incorporated and the company's name was subsequently changed to Imperial Chemical Industries (India) Ltd. special climatic factors to be provided for. color consultancy. IV. after Asian Paints. or application factors that have to be maintained. The objective is to provide specifiers with a complete basis for recommending products and processes . widen the purview of specialty products.databases. It identified paints as a thrust area and was aggressively moving to improve its position.gives the customers a choice of more than 5. ICI (India) is ranked fourth in the paint business. In order to increase its presence in the paints market. ICI (India) was a diversified unit and paint constituted 43% of its net sales..000 shades and can even produce the colors offered by the company¶s competitors.. one of the four Companies that combined to form ICI in UK in 1926. In 1923. architects and designers to enable them to directly source innovative products and services. Prolinks experts ensure specific solutions to specific problems. the Prolinks team delivers total support. opened a trading office to sell alkalis and dyes in Calcutta. etc. ICI¶s growth plan is to beef up its distribution network. The team is entrusted with maintaining a seamless interface between paint specifiers and Berger Paints.From know-how to legwork. technical services. The company invested $11 million in a new decorative paints plant near Bombay and constructed a $16. whether it is a particular shade that needs development. in 1929. Another achievement of Berger is the setting up of Berger Prolinks. Unlike the other paint companies. access newer technologies BERGER PAINTS 14 .7 million plant for industrial paints near Chandigarh in North India.

In order to be amongst the top two players in the industry. It has a country wide presence with 33 branches and stock points across the country and manufacturing plants at Naihati (near Kolkata). Chugoku is the second largest supplier of marine paints in the BERGER PAINTS 15 . In 1955. JENSON AND NICHOLSON:Jenson & Nicholson.Jenson and Nicholson launched the Standox brand of products in 1996 which offers over 45. the company in order to cater to highly specialized Marine paints sector. In the very next year. user friendly touch color screen on a computer that helps consumers visualize as many as 6. This comprises a menu driven. the company is firming up plans to aggressively market its products in the country. ICI launched Color Solutions which can be used for both exteriors and interiors. in technical collaboration with M/s Tikkurilla OY of Finland.000 colours to the Indian car owner. under the brand name of Robbialac. a leading paint company in the country today was established in the year 1922.000 shades on house structures resembling their homes. Sikandrabad (near Delhi) and Panvel (near Mumbai). In response to Jenson & Nicholson¶s Instacolor. targetting the urban and semi-urban markets by introducing more products in the lower and middle segment of the paints market. The Gliddens brand is being positioned in the middle segment to supplement Maxilite in the mass-segment and Dulux in the premium segment. It ventured into the Powder coatings market in 1986. Subsequently.through joint ventures and of course. entered into a 50:50 joint venture project with M/s Chugoku Marine paints of Japan. it introduced Instacolor. It is the first company in the country to introduce computerized dispensing system. it launched India¶s first Plastic Emulsion paint. V. thus becoming the first company in the organized sector to offer this extremely environment friendly coating technology.

Objectives:- 1. To update Members about changes in Government regulations affecting their industry. affecting the small scale paint industry and take preemptive measures. To represent and seek redress from Government for the difficulties experienced by its Members. To foster unity and co-operation among small scale paint and allied manufacturers. by written submission to Government. interaction and representation on relevant Government bodies. for their common progress and prosperity. 5. 7.Maintain a library offering members ready access to several national and international publications. To disseminate among its Members updates in technology and management practices. 6. but most importantly the standards for paints laid down by the Bureau of Indian BERGER PAINTS 16 . To promote and protect the small scale paint industry in India. Identify problems that may arise. 2. The new company also handles heavy duty coatings. 3. 4.world with 30% market share.

growth in construction sector (it is being offered industry status) and growth in the auto/white goods market respectively spurring demand for decorative and industrial paints. raw material intensiveness. The industry has also witnessed increased activity in the industrial variety of paints with the entry of MNCs in auto. Today the awareness level on preventing corrosion through paints is relatively high. a development thatshouldbe a huge boost to the paint industry. which has been The report covers both the segments of decorative and industrial varieties of paints along with elaboration on product sub-segments within these two product segments. The typical characteristics of the Indian paints industry have been discussed in depth covering the typical features of the Indian industry viz.0 million (2000-01) worth Indian paint industry. which is a key growth area in the International market. working capital intensiveness.0 kilogram). This report provides in-depth information and analysis on the US$ 925.Scope:The Indian paint industry has come a long way from the days when paints were considered a luxury item.. The share of the organized and unorganized sector has been dealt with in detail. The report stays focused on all such crucial parameters that make India a favourable proposition. seasonality of The current global scenario with reference to the paint industry has been covered in the report with special focus on auto-coats market. discussing the impact of recent issues and trends (like excise duty BERGER PAINTS 17 .The current scenario prevailing in the Indian paint industry has been pictured in detail. The Indian paints industry offers lucrative scope for stable revenue streams to manufacturers of both decorative and industrial paints. consumer durables etc. Factors that have been given emphasis include the low per capita consumption of paints (1.

Raw material is a major cost-driver in the paint industry.000+ paint retailers. The organized sector has been given an in-depth focus detailing major players." We shall achieve this goal by: y y y y y Establishing a Quality Management System conforming to International Standards. and continues to meet quality requirements that are demanded today even in the domestic market. consumption across user segments. detailing paint production trends in India. Reliability and Delivery and attain Quality Leadership for all the products that are offered by us. The Country's second largest decorative paint player. which encourages team effort and where each individual's contribution is recognized and valued.rationalizations. The demandsupply scenario existing in the industry has been covered. Upgrading our Technology continuously to meet expectations of customers. Company profile BERGER PAINTS is the culmination of over seven-decade process of evolution and growth that began in 1923. First Time". market shares of majors across product mixes and price categories. Institutionalizing a culture of "Getting it Right. quality consciousness in user segments) on the industry dynamics. Planned and structured Training and Development Programs for all employees.theirforte. Its growth has been closely linked with the business and industrial developmentofmodernIndia. "We at Berger Paints are committed to provide full satisfaction to our customers with respect to Quality. worldwide. BERGER PAINTS 18 . Being an ISO 9001 company its quality products have attained instant recognition. BERGER'S performance is anchored today in a wide variety of Decorative and Industrial paints which continue to gain an increasing share of the highly competitive Indian paint market. the trends in the exports and imports front and factors influencing pricing. Berger is headquartered in Calcutta and services the market through a distribution network comprising of 82 stock points and 12. and thus the report provides comprehensive coverage on duty structure applicable for raw materials. Creating an environment.

Ministry of Science & Technology. Tie-ups BERGER presently has technology tie-ups with the companies as under: COLLABORATING COMPANY Nippon Bee Chemical Co. It has sophisticated testing and analytical instruments. Weld Rite Corp. DuPont Herberts Automotive Systems Becker Industrifarg A.The flagship unit at Howrah houses the Research & Development Wing.B. standardizing and ensuring quality assurance of its products. Government of India. COUNTRY PURPOSE Japan USA Sweden Australia Austria USA USA Automotive Coatings Automotive Coatings Coil Coatings Heavy Duty. color computer and accelerated weathering equipment for developing. Anti Corrosive Industrial Coatings Powder Coatings Protective / Heavy Duty Coating Protective / Heavy Duty Coatings BERGER PAINTS 19 . which is recognized by the Department of Scientific & Industrial Research. as a Centre for Basic and Applied Research in Paint and Resin Technology. Orica Australia Pty Ltd. BERGER'S R&D traverses basic research in Paint and Polymer Chemistry and Product Development. Tigerwerk Valspar Copn.

& HEAD OFFICE BERGER HOUSE 129 Park Street Kolkata 700017 Ph : +91 33 2229 9724 / 2229 6005 / 06 / 16 Telex : +91 21 6606 / 5791 Fax : +91 33 2249 9009 / 9729 e-mail : berger@vsnl.com BERGER PAINTS 20 .REGD.

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Our 1947 sales was a princely RS. Mr. Today the names "Berger" and "Lewis Berger" are synonymous with colour. Enriched by the imagination of Lewis Berger since 1760. set up Hadfield's (India) Limited on 17 December. Niblett. who through his marvelous shades. UK acquired was a company which at that time produced 150 tonnes of ready mixed stiff paints. plastic or any other surface . wood. This chapter will reveal the milestones in our history.25 lakhs. embarked on his career as a traveling salesman. varnishes and distempers. 1923.. At Berger we believe in taking paints to the level of fine art.a small paint company in Calcutta. Please click on the milestones in the picture below to travel through our past. Lewis Berger. With an unmatched range of products and services.Elsewhere an Englishman. founder of the British Paints Organization. your shop or factory. Whether it is your home or office. offering its customers a variety of innovative painting solutions.. interiors or exteriors. What British Paints. Adamson bought his first Oil and Color business in 1909. The history of BERGER PAINTS (INDIA) LIMITED is literally as colorful as the business it is in. V.. Canada and the Caribbean.we have a paint solution for it! With an ever-evolving profile and rich history.. Berger Paints continues to be inspired by the creation and innovation of Mr.A. The first Managing Director of British Paints was Mr. with a total employee strength of 100. (Holding)... Till forties James Wilfred Adamson.. Towards the end of 1947 British Paints acquired Hadfield's (India) Limited and thus British Paints (India) Limited was incorporated in the State of West Bengal.. be it decorative or industrial.. Berger Paints India Ltd is a leader in paints. had offered people a chance to transform their homes through the power of imagination. BERGER PAINTS 24 . metal. Berger Paints India Ltd. (an ISO 9001 Company) has come a long way in the highly competitive Indian paints industry.HISTORY Welcome to the world of Berger Paints where we turn your dreams into colorful reality. Hadfield. By 1917 Adamson was owning paint manufacturing companies in Rhodesia..

S. By 1965 British Paints (Holdings) Limited. UK. By this time Berger's operations were divsionalised into the Retail Business Line (RBL) and the Industrial Business Line (IBL) in order to better cater to needs of our customers. newer products introduced. With that.. was acquired by Celanese Corporation. R. Simultaneously. the Company has solely used and developed the name and trademark of BERGER and all its other variants in India. 160 million by 1978.. new markets opened up and new services offered. Jenson Nicholson Limited.. Sales rose to Rs. By 1959. The Company declared its first dividend and shifted the Head Office to 32. Madhukar took over as the Managing Director in the year 1973.. Godwin took over as the Chairman & Managing Director in 1962 and initiated further modernization. Developments took place in every sphere. the Company started using the trade name and mark BERGER.V.New sales offices added. During this period many new products were launched like "Luxol Silk" the first premium BERGER PAINTS 25 . BERGER became a household name in India. As a result. UK.6 million in 1952. Biji K. It was the beginning of the legacy of Lewis Berger in India . From 1983 till date.. the controlling interest of the Company passed on to CELEURO N. Kurien takes over as Chief Executive in 1980. Sales reached over Rs. Under his expert stewardship the Company took the giant strides that made it the fastest growing company in the paint industry.In fifties In The 1950s Sales offices were opened in Delhi and Mumbai and in 1951 a depot was started in Guwahati. In The 1970s Mr. modernization of the Howrah Factory was completed and the first resin plant commissioned. From 31 December 1983 the name of the Company was changed to Berger Paints India Limited (BPIL) with unanimous approval of the shareholders.. In The 1980s Mr. for more than two decades. the Company entered the synthetics paints market. Calcutta. In sixties Mr. Chowringhee Road. U. In 1969 Celanese Corporation sold their interest in the Indian Company to Berger. Holland.A..which the Company would later take forward to enviable heights. D. A.

A Joint Venture . In 1991. B.Berger Becker Coatings Limited. Biji K. The latter half of the nineties saw BERGER attain the ISO . Rajdoot Paints Ltd. Kurien. the controlling stake in the Company was acquired by Mr K S Dhingra. a joint venture company by the name of Berger Becker Coatings Private Limited. COLOR BANK tinting system was also launched through which the consumer can select from a range of over 5000 colors and which are then made available in minutes. Sweden. The merger resulted in addition of two new factories at Goa and Sikandrabad. Mr. a new paint-manufacturing unit at Pondicherry was commissioned in early 1997.76 billion by 1995-96. " In 1999. West Bengal was acquired as a 100% subsidiary Berger Auto & Industrial Coatings Limited and then merged with the Company in 2005.. a network of new depots and several new brands. took over as the new Managing Director. stepped down and Mr. At that time the total sales of the Company was Rs 1. Bison Acrylic Distemper and Rangoli Acrylic Emulsion. " In The New Millenium Jenson & Nicholson. BERGER PAINTS 26 . a service aimed at providing paint and application related information to professionals was introduced marking one of our first steps into painting related services. Viton Refinish for cars.9000 ceriification (1996) and establishment of BERGER's Quality Managemcnt System. U. was merged with the Company. Nepal. In The 1990s BERGER PROLINKS.emulsion in India.. The Motors & Industrial paints business of ICI India with its factory at Rishra. Subir Bose.P. The sales of the Company touched 2. As part of its expansion program. was started in Goa with Becker Industraifarg A.15 billion. who was the Managing Director of the company for the last 14 years. a 10 year veteran in the Company. Mr G S Dhingra and their associates. 1994 witnessed top management change. Nepal was acquired as a 100% subsidiary and renamed Berger Jenson & Nicholson.

BERGER PAINTS 27 . The Company's sales in the year ended 31 March 2005 was Rs 9. In the area of protective coatings. (3) Orica Australia Pty.83 billion. offering painting solution to customers . The name Berger was prefixed with the first name of Mr Lewis Berger and a premium range of products was launched under his full name.55 and enjoy customized service in the comfort of his home. Illusions multi chrome finishes was also introduced as "designer finishes for walls" allowing consumers to transform their walls into fashion statements. The The new trademark includes LEWIS BERGER and incorporates a unique design and colour scheme. New technical tie-ups were forged. (2) Nippon Paint Co Ltd for new generation of automotive coatings.Farbenfabrik GmbH & Co. Ltd. (4) TIGERWERK Lack-u.Another new paints factory at Jammu was commissioned in 2003-04 and in 2005 the Company ventured into Russia through a foreign subsidiary. reaffirming the Company's commitment towards aesthetics. Currently the Company has Technical License Agreements with (1) DuPont Performance Coatings in the area of automotive coatings.3333 . Ltd for coating on plastic auto parts and mobile phones.making it a hassle free exercise. Austria for specialised powder coatings and (5) Nippon Bee Chemical Co. packaging and better service to dealers and customers. Lewis Berger Home Painting was launched. This is once again a first for the Indian paint industry! To avail the services all a customer has to do is call on Berger's helpline 1901 . product quality. KG.

B. Sweden for coil coatings. One of the most advanced facilities of its kind in the country. Government of India. Berger also brings to its customers the latest in international paint technology through its technology sharing arrangements with world leaders Orica Australia Pty Ltd. for the Protection range of heavy-duty anti-corrosive industrial coatingsDuPont Performance Coatings Germany and Nippon Paints Japan for Automotive CoatingsBecker IndustrifargA. Apart from its substantive investments in R&D and Quality Assurance.Certifications Berger Head Office and several of its branch offices are ISO-9001 certified by RWTUV of Germany. Berger's R&D Laboratory was the first to be recognized as a Centre for Basic & Applied Research in Paint & Resin Technology by the Department of Scientific & Industrial Research. Ministry of Science & Technology.. BERGER PAINTS 28 .

Market share The market size of the Indian paints sector has been pegged at Rs 170 bn in value terms and is very fragmented. Kansai Nerolac (20% market share). there are about 2. Berger Paints (19% market share) and ICI (12% market share).6%. While in value terms.5 kg per annum as compared to 1. The unorganised sector controls around 35% of the paint market.000 units having small and medium sized paints manufacturing plants. the growth stood at 9% YoY. with the organised sector accounting for the balance. In the unorganised segment. BERGER PAINTS 29 . India's share in the world paint market is just 0. the lowest in the last five years. Top organised players include Asian Paints (30% market share). The per capita consumption of paints in India stands at 0. in volume terms. the industry grew by 17% to 18% in FY09.6 kgs in China and 22 kgs in the developed economies.

Company¶s Overview  In the last five years the company¶s¶ products demand has doubled due to many factors such as increase in consumption. both cannot meet the total market demand.     Berger currently is producing at full capacity ICI at present is producing an equivalent average of 24 laclitres/month.graviel) Powder Coating (e. Berger distributes it self to retailers throughout Pakistan by a mechanized Order flow structure Berger is also introducing its new products:      BerLith (glue) (like Movelith by Clairant) Printing Ink (offset.g. Etc«Therefore. a boom in the construction sector and foreign industries establishment in Pakistan. of vehicles. BerCoat) Auto-Refinishes Aerosol Spray Paints BERGER PAINTS 30 . no. Berger and its major competitor ICI.

KARACHI STORE PROCRUTMENT SUPPLIERS IMPORTED SUPPLIERS 60% LOCAL SUPPLIERS 40% BERGER PAINTS 31 .Main City Retailers Provisional Retailers District Projects Institute DISTRICT WAREHOUSES CENTRAL WAREHOUSE KARACHI MANUFACTURING PLANT.

g. Purchase Document (PDP) (B.O. BERGER PAINTS 32 .Order Place Files Production Schedule. Honda(Car) Pakistan. Wapda etc. Oxi-Plast. and are also included in the Forecast but their base material is customized. Decorative Products: are those products which are used in homes Flow of Orders: Berger distributes it self to retailers throughout Pakistan by a mechanized Order flow structure Decoration: Warehouse.Two Basic Products: 1) Industrial Products: are customized products for other businesses (B2B Clients) e.M) Lab/Reference Industrial: Regional Office or Warehouse Order (PO) Warehouse Technical Department Lab Reference Purchase Store Production Schedule.Stoven Paints. Yamaha ± DY. These include Ber-Coat. Matt Finish .

M) Lab Reference Purchase Order (PO) Warehouse Lab/Reference Files Store Production Schedule Production Schedule BERGER PAINTS 33 .O.INDUSTRIAL DECORATION Regional Office or Warehouse WarehouseOrder Place Technical Department Purchase Document (PDP) (B.

Procurement Overview: Total No. manufacturing order & sales order) these activities creates a projection of your stock levels anywhere from a week to several years in advance through this you can easily highlights your shortage in red and excess in green.e. of Materials = 2500 different materials Average Imported Materials = 60% (i. 1500 materials) Most important and Expensive Material = Titanium Di-Oxide (TiO2) Purpose = Adds durability to the products. (only used by Berger and ICI) Usage = 200 ton/month Economic Order Quantity (EOQ) = 600 tons Price = $2000/ton MRP/MPS/ERP Master production scheduling (MPS) The objectives of this module are to help Berger Pakistan to anticipate shortage before its occur. BERGER PAINTS 34 . (current stock. purchasing order.

through MPS you can easily see what exactly the shortage will appear if we execute the specific production plan.Drill down in any item to analysis of stock activity.15 BERGER PAINTS days Lead Time: 7090 days 35 .g. Material Requirement Planning MRP serve as a bridge between the master production schedule and real purchase order and manufacturing order. so. the lead time is: Materials Imported Locally Procured Lead Time: 10 . if we are standing at November 2006 we will forecast for Febuary 2007) So. procurement planning is also made for the next three months as 60% of raw materials are imported and only 40% are locally acquired.(e. Procurement Process: 1) Forecasted Procurement: As sales are forecasted for the next upcoming three months and consistent changes are made for the deviations created in the market due to any factor. in what quantity. and when the order should be placed so that the required material will arrive just in time. MRP shows which item have to purchase.

³Resin´ one another important material which is used in bulk quantity availability of it is very unfrequent and profit margin is sometimes very high. 3) Price Negotiation 4) Performa Invoice is called BERGER PAINTS 36 .O. therefore they manufacture themselves.) 3) Querying Sources of Suppliers of Raw Material Sample of raw material is acquired from the suppliers and tested for quality assurance that it is up-to the mark. Defects are checked till the raw material is consumed and final product is made and usually no defects are found as Certificate of Analysis is made by the Procurement and the Laboratory (+ QCC) departments.M. 2) Bill Of Material (B.

) 7) Revival and Recovery of Original Documents: - Bill of Lading Invoice Certificate of Analysis (Confirms no deviation in order) Letter of Credit 8) Clearing Agents 9) Delivery and Possession of Material 10) Good Receipt Note BERGER PAINTS 37 .C.5) Purchase Order is placed 6) Establish Letter of Credit (L.

g.500.300.000 per Month General Manufacturing Process Types of Products: Products WaterBased Solidse. Powder Paints Lead Time: 1.000 litres/month Actual Capacity: 2.000 litres/day (1000 Kg per day.Manufacturing Overview: Maximum Capacity: 110.600.5 days BERGER PAINTS 38 .000/2.5 day Lead Time: 4 .) Forecast: 3.

Note: The daily deviations are also reported to all the departments as any new extra or out of ordinary orders are placed. Brief Manufacturing Processes: 1) Material Acquisition from Store: Store is controlled by the Procurement Department. if standing in November the forecast will be approved for Febuary and the Material Procurement process will come into action.Batch Sizes: (actually done in Weights as Raw material is charged in weights but the output is in usually in the form of Liquid through Standardized Formulae) 200 litres smallest batch sizes then 400 litres and so on«. If there is an order of 300 litres of industrial product (P/O) then the production department asks the clients to go for 200 litre or 400 litre or see other orders of same specifications to produce combine.g. BERGER PAINTS 39 . As this store issues raw material from the warehouse which orders raw material of 3 months ahead by the forecast created and approved by the sales department. E. Any material required by production Department is ready after max 24 hours.

After this process the output is in the form of paste and this similar to the base material. Charging: it is the phase of production in which the raw materials are inputted into machines as there are many types of raw materials and are in bulk quantities keeping in mind the exact standardized quantity of raw material to achieve consistent quality and 2) Grinding: Grinding the raw material of solid form and mixing of liquid raw material with it. bonding. And filling of Decorative products of 2000 ± 8000 litres a day.C): the quality of the product is checked in all terms and respects including colour. 4) Quality Check (Q. base material. 5) Filing: The Orders for the filling packs or tins are given at the time when production Schedule is made. bonding and glossiness of the paint are added.Mixing: after grinding raw materials are mixed. BERGER PAINTS 40 . shine. drying time etc. 3) Colour Matching:Colour is added and checked according to the specified standards and according to the ordered requirement. so by the time manufacturing is completed the empty packs and tins are ready and available from the supplier. drying procedures. Filing of Industrial Products of 2000 ± 5000 litres takes one day. 3) Finishing: Raw materials for the durability.

BERGER PAINTS 41 . 7) Storing: all the finished goods after packing and printing are stored in the warehouse which is situated within the premises of Berger Pakistan S.E.6) Printing: Ink Jet printing is used to print each tin or packets.I. A single packet or tin takes 1 min for printing.T.

O. (Tins) PDP (B.M.) Production Planning Store (Raw Material) Charging (1-2 hours) Colour Matching + Quality Control (2-3 days) Tin Preparation Filling Tanks (Large Batch) Pots (Small Batch) (1 day) Ink Jet Printing Grinding (5-6 hours) Quality Control Store (Finish Goods) Bottlenecks: 1) Grinding 2) Colour Matching 3) Quality Control BERGER PAINTS 42 .Orders Container Div.

So Berger paints has state of the art warehouses that are completely RCC structured as well as some warehouses are equipped with air conditioners. Manufacturing Gujranwala Karachi Central Warehouse Lahore Warehouse Islamabad Warehouse Multan Warehouse Faislabad Warehouse Warehouse Others Warehouses  Quetta BERGER PAINTS 43 .As for plastic emulsion it can be stored at room temperature that should not exceed 27 degree centigrade on the other hand for stoving paint that is particularly for automotives air conditioning is also required.LOGISTICS Warehouse & Distribution As paint is a product that is very sensitive to seasonal conditions that is why warehousing should be according to the specific needs that are required to store particular type of paint .

   Hyderabad Peshawar Rawalpindi They have different warehouses in Pakistan and Karachi warehouse works as a central warehouse through which others warehouses Orders are catered. BERGER PAINTS 44 . Berger Pakistan has its own network of distribution they directly supplies to its retailers through their above 10 warehouses and from retailers it reaches to the final consumers. which is located right besides the manufacturing plant in Karachi.

not expensive in value or distributed generally and openly at ceremonies and a business lunch or dinner shall not come under purview of this Clause.. hospitality or material benefits from any agent/contractors/vendors or other parties with whom the Company has a business relationship. Eid etc. positive. Shareholder Value The Directors and employees of the Company shall be fully committed to enhancing shareholder value and net worth. employees. Those who neglect or willfully breach this Code may be subject to corrective action. Conflict of Interest The Directors and employees shall not participate in the decision making process in respect of any subject matter where there is a conflict of interest between the interest of the Company and the personal interest of such persons. firm or a person in which case such Directors or employees may be deemed to be interested. harmonious and productive work environment. BERGER PAINTS 45 .Company¶s Code Of conduct Standards of Conduct The Company expects all Directors. Participation by employees in general customer meets. Gifts customarily given on special occasions like New Year. Every member of the Board and employees shall take adequate steps and measures that would have been taken by a man of ordinary prudence towards achieving this objective. conferences organized by business partners under an open invitation will also not fall under the purview of this clause. agents and contractors to take steps for furthering safety and welfare of citizens and for ensuring a cooperative. which may include termination. Gifts The Directors and employees shall not accept any gift. Business Opportunity The Directors and employees shall not take advantage of any business opportunity belonging to the Company and known to them to be so belonging. The Directors and employees shall also not participate in taking decisions in respect of any matter or transaction involving an organisation. efficient. seminars.

and will continuously work towards enhancement of the Company's goodwill. microfiche and all other media. microfilm. Quality Directors and employees shall function so as to ensure that the Company preserves its reputation in the market. The Company shall be entitled to take all such steps as may be required to prevent any unauthorised disclosure of information. BERGER PAINTS 46 . Compliance with Laws The Directors and employees shall take steps to ensure that the Company complies with applicable laws. is correct.Time and Attention The whole-time Directors and employees shall devote full time and attention to the affairs of the Company and shall not engage in any other profession or calling which impairs their ability to do so. supplies quality products and valued services to the customers. Company funds must be used only for Company purposes. regulations. CD's. Confidential information will be deemed to be a valuable asset and shall be treated as such by all employees and Directors. rules and regulatory orders. floppy disks. which is made available by the Company to the public. They will also seek such compliance from the Company's contractors and agents. Records Every employee shall take necessary steps to preserve records as may be necessitated by law and the Company's business. Every employee will ensure that he or she and the Company's agents and contractors take all reasonable steps such that the Company receives value for the Company funds and accurate and timely record of each and every expenditure is kept. computer hard disks. email. and is free from ambiguity. Funds Every employee shall be personally responsible for the Company funds over which he or she exercises control. both internal and external. Dissemination of Information Directors and employees shall ensure that all information. Records include written documents. Information related to the Company and not in the public domain will be generally treated as confidential.

religion. Any person aware of violation of the Code may lodge a written complaint with the Compliance Officer. unless specifically allocated for such purpose. colour. 3. BERGER PAINTS 47 . Enforcement 1. 5. All other persons who may become Directors and employees shall be deemed to have accepted the Code from the date when they become Director or employee of the Company. disability or marital status. The Company Secretary shall be the compliance officer for the purpose of this Code. All the present Directors and employees of the Company shall be deemed to have accepted this Code. sex. 2. Utilization of Assets The Directors and employees shall ensure that the assets of the Company are utilised in the best interest of the Company and not for their personal benefit. 4. Directors and employees shall not discriminate on the basis of race. Non-discrimination All other factors being equal. The Company may suomoto undertake internal investigation or enquiry in respect of a suspected breach of the Code. Complaints of sexual harassment will be investigated and action taken against offending persons.All employees shall comply with applicable laws in Pakistan and non-compliance will render them susceptible to action by the Company. Benefits No Director or employee shall derive any undue benefit from the Company which would not be otherwise available to him or her in the course of the Company's business. creed. All Directors and Managers will have to make an annual affirmation of the Code. This Code may be amended by the Board of Directors of the Company. Any form of sexual harassment is prohibited.

SAFETY It's always a good idea to check out the safety information relating to the specific type of paint that you're using. Skin contact: If skin contact occurs. First aid: Eye contact: If contact is made with the eyes. remove any contaminated clothing and wash your skin thoroughly with water BERGER PAINTS 48 . or painting an interior wall or ceiling with an oil based paint. then hold your eyes open and flood them with luke warm water for at least 5 minutes and then immediately consult a doctor. wear a respirator with a combined vapour/particle cartridge. Remember that oil based paint is flammable so make sure you eliminate any potential sources of ignition. When spray painting an oil based paint. prior to commencing your project. ProductSafety Advice: Keep out of reach of children. then try to avoid any prolonged or repeated skin contact as the base is irritating to the skin. such as cigarettes or devices that generate sparks. If swallowed: Do not induce vomiting. Drink plenty of water and seek immediate medical help. ensure you provide adequate ventilation by keeping windows and doors open during use and while drying. If you're using an oil based paint. If you're painting indoors.

We will vigorously promote and safeguard the interests of our employees. We will stay in the forefront of innovation and technological development in the paint industry.MISSION STATEMENT     The company's employees are constantly encouraged to pursue the fulfillment of the Corporate Mission Statement. We will achieve corporate success through an unwavering commitment to provide our customers high quality products to their ultimate satisfaction. our suppliers and all our others business associates. BERGER PAINTS 49 . our shareholders.

BERGER became the first company in Pakistan to modify its formulations to ensure that all its decorative paints are LEADFREE. BERGER's concern extends beyond the commercial or even the aesthetic aspects. VEHICLE FURNISHING/STOVING PAINTS Vehicle Refinishes Division caters to touch-up or complete repainting of automobiles. Roof shield and Tartaruga. The Company remains aware of the Environmental and health impact of its products. BERGER offers three different systems for refinishes designed to enable application without heat treatment. quick drying and exactly matched with OEM colors. durable.DIVISIONAL STRUCTURE 1. 2. Along with finishes. These finishes are high glossed. ancillaries are also included in refinishes range such as BERGER PAINTS 50 . conformance with original color is essential and BERGER's technical experts ensure this in its laboratories. For such types of coatings. DECORATIVE PAINT The Decorative Division brings BERGER in close contact with a large number of people for whom top of the line brands like Robbialac VIP Emulsion. BERGER decorative also includes exclusive products such as Aquasafe for water tanks. Robbialac VIP Super Gloss Enamel and Robbialac VIP Allrounder have become household names.

boilers. bridges.primer. BERGER PAINTS 51 . 3. PROTECTIVE COATS The Protecton Division makes heavy duty protective coatings and anti corrosion paints for specialized structures such as barrages. which is highly demanded across the nation. pipelines. This makes BERGER's products a complete repainting system for vehicles. and a wide range of metal fabrications which are exposed to the hostile environmental elements. putty. all kinds of thinners and COB Lacquer. dams.

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