DISCLAIMER

This note entitled ‘Snapshot: Paints & Coatings Sector in India has been prepared by Madras Consultancy Group (MCG). This
snapshot has been prepared based on secondary research supported by an analysis at MCG. Prior to undertaking any business
or investment decisions, further detailed investigations / studies are recommended. MCG does not accept any direct or indirect
legal liability of any kind. This note remains MCG’s intellectual property and no part may be reproduced or circulated without
the prior permission of Madras Consultancy Group(MCG), 2nd Floor, MN Plaza, 15/16, 3rd Cross Street, Kasturba Nagar,
Adyar, Chennai – 600020, India. For queries or comments, please email admin@mcg.in

Paints & Coatings Sector in India – a snapshot

Introduction
The domestic paints and coatings sector present a significant opportunity backed by growth in real estate
construction and infrastructure development such as airports and metro rails. The decorative paints segment
is also growing rapidly in the rural areas owing to rising disposable income. Significant changes have also
been witnessed in the marketing of paints and coatings. Product portfolios of Indian paint companies have
undergone considerable improvements in the recent years. In order to encourage consumers to be
experimental, companies have launched extensive brand building and promotional activities. The decorative
paint market in India usually witnesses peak demand during the festive months, September to December.
Growth in the manufacturing sectors, primarily automotive and consumer durables, have contributed to the
growth in the industrial paint segment.

The paint sector in India has a well-entrenched set of players with established brands and strong distribution
network. Many multinational players have also entered the domestic market and expanding their presence.

With increased concern about environmental issues, paint companies are investing heavily in research and
development activities in view of producing eco-friendly products. Water based paints are increasingly sought
after especially in urban markets as compared to traditional solvent based products. Demand for lead-free
paints in on increase, which earlier used to be preferred only in the up-market segment due to higher costs.

Product Segmentation
Paints and coatings sector are mainly categorized into decorative paints and industrial coatings. The product
segmentation of paints and coatings sector is provided in the below Exhibit I:

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 Exhibit I : Product segmentation: Paints & Coatings

Exterior & interior wall

Emulsions paints
Decorative paints
Distemper & ancillary
Wood finishes &
products (primers,
enamels
putties, etc.)
Paints
Automotive & marine
Powder coatings
coatings
Industrial coatings
High performance Packaging & other
coatings & protective general industrial
paints coatings

Source: Secondary Research

Industrial coatings are widely used in automobiles, consumer durables, marine equipment and industrial
components.

Industry Structure
• The paints and coatings sector are fairly organised and the large players account for roughly 65% of
the total market
• There are around 2,000 small scale manufacturing units in the unorganized sector that primarily focus
on decorative paint segment
• As compared to the decorative segment, industrial paints segment is technology intensive and hence
largely comprises organized players

Overview
• The Indian paints and coatings market are estimated at 4.5 million tonnes by volume and are valued
at INR 511 billion (US $ 7.3 billion) in 2018-19 and is forecast to reach INR 700 billion by 2021-22.
• Of the total market, decorative paints accounts for around 75%

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 • Demand for paints and coatings increased by 12% in volume terms and 15% in value terms in 2018-
19, over the previous year
• The four leading players such as Asian Paints, Kansai Nerolac, Akzo Nobel India and Berger Paints
together account for over 60% of the total paints and coatings market.
• Other noted players include Jotun Paints, Shalimar Paints, Jenson & Nicholson, Mysore Paints and
Snowcem.
• Asian Paints has an installed capacity to produce 1.73 million KL of decorative paints and 14,000 KL
of industrial paints. Berger Paints has the capacity to produce 720,000 tonnes of decorative paints.

.Paints and Coatings : Market share (%) by Segment 2018-19

Total Market: INR 511 Billion

Industrial
Paints
25%

Decorative
Paints
75%

Source: Secondary Research

Decorative paints
• Decorative paints segment includes exterior wall paints, wood finishes, enamel and ancillary products
such as primers, putties, etc.
• Decorative paint market was valued at INR 383 billion in 2018-19
o Of this, emulsion followed by enamel types account for 38% and 30% respectively
• There has been a significant shift from distempers to emulsions and premium emulsions in the
decorative paint segment, in the recent years

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 Decorative Paints Break up by Segment 2018-19
Total Market: INR 383 billion

20%
38%
12%

30%

Emulsion Enamel Distemper Others

Source: Secondary Research

Asian Paints is the market leader in the decorative paint market accounting for a share of 52% followed by
Berger Paints and Kansai Nerolac. In the recent years, Berger Paints and Kansai Nerolac have taken up
several initiatives to increase their presence in the decorative paint sector.

Some of the factors fueling the demand for decorative paints include :
• Increased urbanization and increasing trends in paints usage in rural areas
• Rise in disposable income and increased preferences for emulsions and enamels
• Aggressive marketing and increased distribution network amongst key players
• Introduction of several innovative products to attract customers
• Fiscal incentives provided by the Government to the housing sector, such as “Pradhan Mantri Awas
Yojana-Urban (PMAY-U)”, and so on
• Apart from housing sector, demand for decorative paints is also increasing from the hospitality sector

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 Decorative paints organised market : Key players and market share (%), 2018-19
Total Market: INR 383 billion

8% 8%

15%
52%

17%

Asian Paints Berger Paints Kansai Nerolac Akzo Nobel Others

Source: Secondary Research

Industrial paints

• Market for industrial paints was valued at around INR 128 billion in 2018-19
• Solvent-based paints account for over 90% of the industrial paints market
• Automobile, shipping, capital goods, white goods and heavy industries are the major end users of
industrial paints
• General industries and auto OEMs are the major users of industrial paints

Industrial paints market: Break-up by segments, %, 2018-19

Total Market: INR 128 billion

Performance coatings &

14
General industrial
32 Auto OEM
12
Auto-refinish

Powder coating
14
Others
28

Source: Secondary Research

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 Industrial paints : Key players
Industrial paints segments Key Players

Performance Coatings & General Industrial Akzo Nobel, Kansai Nerolac, Berger Paints

Auto OEM Kansai Nerolac, Asian Paints, BASF

Auto Refinish Akzo Nobel, BASF

Powder coating Kansai Nerolac, Asian Paints

Source: Secondary Research

• Kansai Nerolac is the market leader in the industrial paints market

• The industrial paints segment is far more technology intensive than the decorative paint market due to
which presence of small players is almost nil
• Indian paint is mostly a B2B market where-in the paint manufacturers work closely with their
customers
• Hence the sales contribution from the dealer channel is low compared to decorative paints

Automotive coatings
• The automotive coatings market is primarily driven by automobiles and two-wheelers, which grew at
5.5% and 16.1% respectively during 2018-19
o Demand for automotive paints is primarily from the OEMs in the automobile and two-wheeler
segment
o Automotive coatings segment is noted for long term contracts between the automobile OEMs
and coating supplier; for instance, Kansai Nerolac is the major supplier for Suzuki while
Nippon Paints is the key supplier for Toyota
o In the automotive paints market, Kansai accounts for a share of 60% followed by PPG Asian
Paints at 20% and BASF at 10%

Auto-finish coatings
• Auto-refinish market is driven by the growth in used car sales, repairs and services
• PPG Asian paints, Kansai Nerolac, Akzo Nobel and BASF are the key players; PPG Asian Paints
became the market leader in this segment on acquisition of ICI’s auto-finish business
• Increasing demand for used cars, growth in auto-insurance and emergence of Multi-shop operator
chains in car service and repairs have contributed to the increasing demand for auto-finish coatings

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Powder coatings
• Major user industries of powder coatings include white goods, auto components, furniture and home
furnishings. Kansai Nerolac is the market leader in the powder coatings market for white goods.
High performance coatings
• Some of the large users of performance coatings include core sectors (power, oil and gas), mining,
infrastructure (bridges, road markings, etc.), marine (ships & vessels), metal (steel, etc)
o Marine paints are used to protect surface of the ocean vessels from corrosion and fouling
from sea water

Key players and manufacturing facilities

With steady increase in demand for paints and coatings, several players are increasing their production
capacity. Some of the recent developments in this area are provided in the table below.

Paints &Coatings : Key players & manufacturing facilities

Total No. of
Company Manufacturing Manufacturing facilities Recent expansion
plants
Decorative : Rohtak (Haryana),
Kasna (UP), Ankleshwar (Gujarat),
Khandala (Maharashtra),
Patancheru (Telangana), Visakhapatnam : 300 Mn. L
Visakhapatnam (Andhra Pradesh), (Scalable to 500 Mn. L)
Asian Paints 10 (domestic)
Mysuru (Karnataka), Sriperumbudur Mysuru : 300 Mn. L (Scalable
(Tamil Nadu) to 600 Mn. L)

Industrial :Sarigam (Gujarat), Taloja

(Maharashtra)
Expanding operations in
Howrah, Rishra, Tezpur, Nallbari,
Hindupur (80,000 tpa to
Berger Paints 12 Hindupur, Jejuri, Majju, Puducherry,
160,000 tpa), UP &
Udyognagar
Maharashtra
Kansai Lote, Bawal, Jaipur, Hosur, Amritsar : 52,800 KL
7
Nerolac Sayakha, Amritsar, Visakhapatnam Visakhapatnam :60,000 KL
Hyderabad, Mohali, New Mumbai,
Akzo Nobel 6 Thane : Power coating facility
Bengaluru, Bhind, Thane
Shalimar Howrah, Nashik, Bulundshahar,
4
Paints Chennai
Source: Secondary Research

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JSW Paints is the recent entrant into the highly competitive paints and coatings market
o The company has invested INR 6 billion in setting up manufacturing facilities at Vasind
(Maharashtra) and Vijayanagara (Karnataka)
o The plant at Vasind has capacity to produce 25,000 KL of coil coating products while
Vijayanagara plant has the capacity to produce 100,000 KL of water-based decorative paints

Industrial Paints : Key players & Collaborations

Company Foreign Collaborations Details

Architectural coatings, Process
Kansai Paint (Japan)
design and quality improvement
Technical assistance for
Kansai Nerolac Oshima Kogyo (Japan) manufacturing heat resistance
coatings
Technical assistance for coating
Cashew (Japan)
products MICRON and their thinners
PPG Asian Paints JV for auto OEM,
refinish, and industrial coatings
Asian Paints PPG Industries
Asian Paints PPG JV for non-auto
industrial and powder coatings
Akzo technology across segments of
Akzo Nobel India Akzo Nobel (Amsterdam)
Decorative and Industrial Paints
Technical license agreement for
DuPont Performance Coatings
Automotive coatings
Berger Becker Coatings JV (49%
Becker Industrifarg (Sweden) Berger stake) for coil coatings
Berger Paints
segment
J.V – BNB Coatings India Ltd for
Nippon Bee Chemicals Co. Ltd
manufacture of coatings for plastic
(Japan)
substrates
Source: Business Standard

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 Paints and Coatings : Key Players & Revenue

Revenue from operations

(INR Billion)
Company
2015-16 2016-17 2017-18 2018-19

Asian Paints 118.3 127.2 141.5 164.0

Berger Paints India Ltd. 43.4 46.6 47.9 54.6

Kansai Nerolac Paints 42.5 45.3 47.4 51.7

Azko Nobel 29.3 31.3 30.4 29.2

Source: Company’s annual report

Recent Developments
• Akzo Nobel has recently introduced several innovative and eco-friendly products in the Indian market.
Some of these include :
o Dulux Testers, in an exclusive tie up with Amazon - first of its kind tool in India
o Next generation of DuluxWeathershield Max with improved anti-fungal, anti-algal properties
o Dulux Professional Weathershield Creation STONETEX ‘as stone like’ finish in premium
exterior/Interior professional segment
o New metallic finishes in Dulux Velvet Touch Trends metallic range
o Premium exterior products “DuluxWeathershieldPowerflexx&Dulux Professional
WeathershieldFlexx’’

• Kansai Nerolac has taken several steps in improving its product category. Some of these include:
o Decorative paints are free of heavy metals and have low VOC (Volatile Organic Compound)
o Similarly, automotive paints are free of heavy metals
o Introduction of ‘impression ultra-fresh’, to address indoor air pollutants
o Low cure coatings for HCV segment, which can be cured at ambient temperature of around
30°C
o Introduction of DTM (Direct to Metal) technology products to eliminate the use of primer
coating on metals

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 • Berger Paints has Technical License Agreement with Nippon Paint Automotive Coatings Co. Ltd.,
Japan. The company is advancing its capacity and some of the recent developments include:
o The colorant manufacturing facility with a capacity of 26,400 KL is being set up at Rishra,
West Bengal. This plant is likely to be operational during 2019
o A new plant to produce water and solvent based decorative and industrial paints & coatings is
being established in Sandila Industrial Estate, UP. The plant is likely to be operational by
2021

Export and import

During the last five year, export of paints and coatings (HS Code 3208 & 3209) has grown at over 19% while
import has grown at over 11%.
Paints & Coatings : Trends in export & import 2013-18 (INR Billion) *

25.0
19.3
20.0
15.9
13.9 14.7
15.0 12.8
11.3

10.0
5.7
3.2 3.8
5.0 2.4 2.3 2.5

-
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Import Export

Source: https://commerce-app.gov.in

* HS Codes :
3208 :Paint Varnshs (InclEnml And Lacqr) Bsd On SynticPlymr/ChmlyMdfdNatrlPlymr,Dsprs Or Dslvd Non
AceusMdumSltn
3209 Paint Varnshs (InclEnml And Lacqr) Bsd On SynthtcPlymr/ChmclyMdfdNatrlPolymrDsprs/Dslvd In Aqueous Medium

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Going Forward
• The Indian paint sector is set to witness steady growth in the coming years owing to several
conducive factors such as :
o Favourable policies in the real estate sector and Government’s initiative in the development of
affordable housing
o Development of 100 smart cities, which includes infrastructure development
o Reduction of GST for paints and coatings from 28% to 18% in 2018
o Increase in high-rise buildings with stringent norms regarding fire-safety, which will drive the
demand for protective coatings
• With heightened awareness on environmental issues, paints and coating manufacturers are expected
to increase lead-free paints in the coming years

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