Critical Success Factors in the Paint Industry:

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Critical Success Factors in the Paint Industry:

1. Cost And Price Drivers:

The paint industry costs and prices are driven by raw material costs which constitutes about 57% of the costs of sales, and government levies which constitutes 38% of the cost of paints. There are more than 300 inputs going into the manufacturing of paints and about 70% of them are based on petroleum.

The petroleum prices are therefore one of the most important cost drivers. The paint industry includes the extent of concentration in the paint industry which is very high. This lead to very low margin at each level with the final retailer as little as 4-5%.


2. Working Capital management:

The industry has high raw material content; the number of finished product is also large with varying pack sizes. Sales in decorative paint are seasonal with more than half of sales coming in September – November festival season. Debtor levels also rend to be high in this industry.

• Distribution:

Marketing of decorative paint requires extensive dealer networks, especially in the urban and the semi-urban markets.

• Plant Location:

Plant location helps service distribution network and bulk consumers.

• Technology:

Paint is highly raw material intensive commodity, which have protective functions in addition to decorative one. An average range of trade sale, industrial, automotive and maintenance coating employs well over 900 raw materials.

This posses a constant challenge for research and development efforts in formulating and reformulating products for better performance, cost reduction, new application, shade development and exploitation of new materials.

As the environment in which paint is used, keeps on changing with expanding problem of industrialization and attendant pollution, the expectation of paint performance keeps on changing , demanding evolution in paint technology.


At a time the Indian paint industry was dominated by foreign paint companies of mostly British origin, Asian paint started operation as a wholly Indian company in small way with its own in house technology.

Over the years, based upon its R&D efforts, the company has made tremendous progress and achieved leadership position in the country, which it has consistently maintained for over the years.

Asian paint has one of India’s largest paint research laboratories, recognized by the department of science &technology, Government of India. The R&D group is structured to provide separate focus to industrial paint technology and decorative paint technology.

Our ‘firsts’ in the paint industry include specialized chemical resistant coating, computerized colour matching, thermosetting acrylic finishes and economic plastic emulsion paint.

Naturally the company has always placed very high emphasis on its in house R&Dand built both, manpower resources and facilities commensurate with its requirements.

The dependence on his R&D efforts has paid rich dividends, as the company was able to meet the market challenges with expansion of available market and penetration of new markets segments with the new product
 
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