ASIAN PAINTS LIMITED

The Indian paint industry is growing at impressive rate but still has a good potential to grow
The Indian paint industry is divided into the organised and unorganised sector. The organised
sector comprises 25 units registered with the DGTD, which constitutes more than half of the
industry sales. The total paint industry consist of only six large firms in the organised sector
which comprises about three fourth of the organised sectors production. The paint industry is
divided into five segments. Decorative paints which consists of 50% of the total paint market.
Industrial paint consists of 30% of the paint industry. Marine paint, heavy duty paints and can
coating these three segments consist of the remaining 20% paint industry.
Asian paints ltd was started in in 1942 as a small scale partnership firm. It was converted into
private limited company in 1945 and later on into public limited company in 1973. The
company has continuously broadened and diversified its product range and geographical
spread over the years to become the largest company.
APL concentrates on price sensitive decorative paints market. APL has 85% of its total sales
from decorative paints and has also spread its geographical market. The company has
expanded in product range, attained technology and widened its distribution network, to
become the market leader in the market.
Raw material is the most critical component of the total cost in a paint company. And the
availability of these raw materials remains uncertain in India. APL so has implemented
projects to manufacture the vital raw material like phthalic anhydride and penta erythritol to
ensure supply of these two vital raw materials. APL has collaborated with Nippon Paints of
japan, Deveoe marine of USA. To acquire the latest technology and to avail the technical
know-how. APL has the largest R&D laboratory among the paint manufactures in India, its
reliance on its own R&D efforts together with acquisition of technology from abroad has
helped it to maintain the market leadership
APL sales increased to Rs 470 crore in 1992 from Rs 79 crore in 1983. Its ROE was about
14% in 1992, the share price was Rs 918 in 1992. APL maintains a low debt equity ratio and
pays about half of its earnings as dividends. APL is first company in paint industry to have
backward integration, when the government put a ban on importing certain raw material, so
the company had to go for backward integration. APL expenditure on advertisement has been
increasing over the years. The popular mascot GATTU, created a brand image of the
company by which it was easily identified its brand in rural India. With various strategies the
companies had been able to grow sustainably in the Indian paint market.