Disrupting the Decorative Paints Market Birla OPUS

Team Chemical Market

30 Mar 2024

A recent development that could potentially disrupt the present paints market in India is the entry of Aditya Birla Group's flagship company, Grasim Industries, into the decorative paints business. The investment is around Rs 10,000 Crores. The revenue target is Rs 10,000 Crores/ year within  3 years, aiming to achieve profitability. The launch is unprecedented even on a global scale starting with a pan-India operation. Grasim Industries with its well-known product and distribution network in cement, intends to capitalize on its many years of experience in this area.  Their objective is to achieve the second position in India's decorative paints segment.

Present Scenario

Currently, the market is dominated by four major players: Asian Paints, Berger Paints, Kansai Nerolac, and Akzo Nobel collectively holding  75 % of the market share. The estimated market for decorative paints is about Rs 70,000 Crores annually. The final paint capacity to be installed by Grasim Industries is 1332 MLPA (million liters per Annum). Presently 3 of their plants are in operation at Panipat (Haryana), Ludhiana (Punjab), and Cheyyar (Tamil Nadu). Three more plants will be added in the future at Chamrajnagar (Karnataka), Mahad (Maharashtra), and Kharagpur (West Bengal). The company has also established an R&D facility in Maharashtra. New players like JSW and Pidilite have also entered this segment.

Future Prospects

The Indian economy is forecasted to grow at a CAGR of 7 %. The decorative paints primarily driven by the housing sector are expected to witness accelerated growth to reach Rs 1 lakh Crore per year in 5 years.  Thus, increasing urbanization infrastructure development and lifestyle changes will contribute to driving higher consumption.

Please refer to the histogram above. Our present per capita paint consumption of 2.5 Kg is well below the Global average of 10 Kg. Considering the provided data, we could infer that decorative paints are a high-growth market and also a strategic portfolio choice.


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