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By: Nagaraj M
Industry AnalysisCompany Analysis
SWOT Analysis
By: Nagaraj M
Agenda1. Paint Industry Overview2. Asian Paints Company Overview3. SWOT Analysis4. Value Chain Analysis
By: Nagaraj M
Paint Industry Overview
Asia Pacific Eastern Europe Latin America North America Western Europe
5%
6%
8%
3% 3%
Growth Per Year
Source: World Paints and Coating Industry Association
By: Nagaraj M
Paint Industry Overview
8%
11%
5%
Growth Per Year of Major Countries in Asia PacificIndonesia India China
Source: World Paints and Coating Industry Association
CAGR5.2%(Sales
Volume)
CAGR6.4%(Sales Value)
By: Nagaraj M
Paint Industry Overview
Architectural
Industrial
3 Segments
Special Purpose Coatings
51%
28%
21%
Sales Value
51%
28%
21%
Sales Volume
Source: World Paints and Coating Industry Association
Global
Scenario
By: Nagaraj M
Paint Industry Overview
54%
23%
17%6%
Global Consumption of Paint
Asia - PacificEuropeNorth AmericaLatin America
China 60%
India 14%
Global
Scenario
By: Nagaraj M
Paint Industry OverviewDecorative
(70%)
Emulsions Enamel Distemper Cement Paints
Industrial (30%)
Automotive Coating
High Performance
Coating
Powder Coating Coil Coating Marine
Coating
Indian
Scenario
By: Nagaraj M
Paint Industry Overview
S
A B
P
P PAN (Pthalic Anhydride)Titamium Dioxide Imported and 50% of the cost
Pigments
S Acetone Exported from Thailand and Japan
Solvents
E Fungicides, DriersDomestically Procured
Additives
B ResinsDomestically Procured
Around 300 raw materials are used which constitutes 70% of the total cost
50% of them are Crude Oil based
30% of the raw materials has to be imported
Binders
Paint Industry is Raw Material Intensive
Indian
Scenario
By: Nagaraj M
Paint Industry Overview
0 5 10 15 20 25
Per Capita Consumption Per Year
By: Nagaraj M
Paint Industry Overview
Akzo Nobel
PPG Sherwin Williams
RPM Inc Valspar Axalta Diamond Paint
BASF SACAL Nippon02468
1012141618
Top 10 paint companies in the world
Sale
s in
$ Bi
llion
Global
Scenario
By: Nagaraj M
Paint Industry Overview
54%
18%
16%11%
2%
Market share of the organized sector
Asian Berger KNP Akzo Shalimar
Indian
Scenario
Indian paint industry is estimated at Rs.406 Billion
By: Nagaraj M
Company OverviewRevenue Segmentation in %
By: Nagaraj M
Asian Paints Company Overview
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
57.1
60.9
55.3
57.6
59.6
57.6 57
55.3
51.6
% to Net Revenue
Raw
Mat
eria
ls C
ost
By: Nagaraj M
Asian Paints Company Overview
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
375 362
774 775958
10501169
1327
1597
PAT in INR Crores
By: Nagaraj M
Asian Paints Company Overview
FY12 FY13 FY14 FY15 FY16
43.73
50.55
56.6
71.6475.16
R&D Expenditure in INR CRORES
Asian Paints is spending consistently 0.4 to 0.5% of Net Revenue as R&D expenditure
By: Nagaraj M
Asian Paint SWOT Analysis• Strengths:
– Market Leaders with 54% Market Share– It has in house raw material supply and so
it can reduce raw material cost– Good operating and Distribution Network
• Operating in 17 countries• It has 25 Manufacturing facilities in the world• Serving customers in 65 countries• Has 3000 dealers in its network• 50:50 Joint Venture with PPG for Industry
Coating Segment
300 Colour Ideas stores provided more than 2.8 Lakh consultancies to help consumers achieve their dream look for their homes.
By: Nagaraj M
Asian Paint SWOT Analysis• Strengths:
– Presence in Home Improvement BusinessSleek today is the only player in India in the kitchen space that deals in both “Kitchen Components” as well as “Full Kitchen Solutions”.
Expansion and promotion for range of bath fitting offerings in the premium range
By: Nagaraj M
Asian Paint SWOT Analysis• Strengths:
– Achieving disruptive digital transformations in Information Technology
• IT architecture that supports personalized consumer journeys across physical , digital and human touch points through seamless integration of multiple systems.
• Upgraded its core ERP to a highly scalable in-memory S/4 HANA platform.• Constant Investments in Predictive and Data mining
By: Nagaraj M
Asian Paint SWOT Analysis• Strengths
– Best in Working Capital Management
201520142013201220110123456789
Inventory Turn Over Ratio
AP Berger KNP Shalimar
By: Nagaraj M
Asian Paint SWOT Analysis• Weakness
– It has only 15% Market Share in Industrial Coating Segment– Widening product mix puts strain on production distribution,
accounting and administration.
By: Nagaraj M
Asian Paint SWOT Analysis• Opportunities
– Increasing the Market Share in Industrial Segment
– Railway ministry has made a budgetary allocation of Rs1200bn in FY17 as against Rs480bn in FY14, a part of which will flow to improvement in existing stations and maintenance of Rolling stock and assets which will increase demand for paints.
By: Nagaraj M
Asian Paint SWOT Analysis• Opportunities• Road Sector
GOI has announced an allocation of Rs970bn for roads sector in FY16-17 budget. Improvement in ordering, tender pipeline and traffic growth in the Indian Road sector is expected to open up new opportunities for the paint companies by way of – Road marking and central divider, Flyovers, bridges – Side and Centre grills to protect them from corrosion – Beautification of the areas surrounding infrastructure
projects
By: Nagaraj M
Asian Paint SWOT Analysis• Threats
Failure of Monsoon
Weakening of Rupees
Rise in Oil Prices
By: Nagaraj M
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