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Increasing Urbanisation and Young Homeowners Paint Pretty Picture

The consumer has an eye for décor and the money to spend on it, and takes pride in doing up his home as an extension of his personality. The manufacturer-marketer indulges his aesthetic aspirations by offering him a bevy of colours and textures, urges him to touch and smell the wares in the interactive, consumer-friendly store, and promises him an eco-friendly product that will keep a family safe. Since India is not DIY country, the marketer closes the loop by sending the client a team of painters to do the beautifying work for him. Now imagine this scene being replayed time and again across the metros and tier 2-3 cities, and you’ll understand why the paint industry is one of the most vibrant aspects of the Indian economy. The industry is worth `40,600 crore today, up from `26,000 crore in 2011-12. According to industry association Assocham’s recent report, India is the second-largest consumer of paint in Asia (after China). That could explain why the industry is expected to touch `62,000 crore by 2016. That’s a record double-digit compound annual growth rate (CAGR) of 20 per cent But there’s still huge capacity to grow. “Compared to other BRICS countries where the per capita consumption of paint is 10 kg per person, India lags behind at 2 to 5 kg. There is huge scope to grow,” says Anuj Jain, director of decoratives at Kansai Nerolac. He should know. The decorative paint segment is a key driver and accounts for 73 per cent of the overall paint market. This segment broadly consists of emulsion paints, penetrating primer, stucco, stone finishes and textured coatings. “The decorative business registered double-digit growth in the first quarter ended July 31, 2014, with good growth across geographies,” notes KBS Anand, managing director & CEO, Asian Paints. A few weeks ago, the company roped in actor Deepika Padukone to endorse its niche textures and finishes assortment, Royale Play Echoing his sentiment on the promising paint scene is Abhijit Roy, managing director of Berger Paints. “While wall paint is showing very good scope, even protective coating used in infrastructure development is picking up. The auto industry too is showing signs of revival,” he says. Global market research firm Research & Markets recently issued a report stating that the automotive paints market in India was projected to witness a CAGR of 10 per cent till 2019. The Indian automotive market is the third largest in Asia, after Japan and China, and almost all the major automobile manufacturers have their operations in the country.

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Paint industry to establish council to address skills gap

Tndian Paints Association (IPA) has proposed National Skill Development Corporation to establish a ‘Sector Skill Council’ for the coatings industry to address its skill gaps.` Jayakumar Krishnaswamy, President of IPA and MD of Akzo Nobel India, said that the proposal identified 20 skill sets of which 14 relate to the employees working in the paints-manufacturing units. “The balance six relate to individuals working outside the industry (the painters), but who have a tremendous impact on the performance of the coatings manufactured”, he said. The proposed council would act as an enabler for enhancing the delivery mechanism for promoting the skills sets. Some 1.6 million painters are available today for non-industrial coating applications. “With the industry foreseeing a consumption growth of 10 per cent, it could be estimated that 1.5 lakh additional skilled painters would be required every year for applications”, Krishnaswamy added. The Council would also set the standards for imparting skills sets to both the existing and new workforce joining the paint industry. “The existing training institutes including ITI's and other private institutes would be actually imparting the skills training”, he explained. During 2013-14, the overall production of paints in the country was about 3,115 million litres having achieved a growth of around 6 per cent over the previous year. In value terms, its revenue grew 12 per cent to Rs. 31,360 crore last year. The overall per capita consumption of paints is estimated to be 2.6 kgs a year, of which two kgs are the per capita consumption in the decorative paints and the balance is for industrial use. The Governments plan for smart cities and growth as well in realties have made the industry hopeful of improvement in the decorative paints going forward. Growth in automotive industry, which consumes nearly 45 per cent of industrial paints, has the potential to generate demand. A fall in interest rates and stable fuel prices might improve sales, IPA president pointed out. IPA saw opportunity for growth in corrosion resistant paints segment.

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