The Hindu Business Line : `Paint industry must educate consumers'

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Kolkata Jan. 21 The issue of `commoditisation' of paints, which leads the industry into price wars that erode profitability, the responsibility of the trade towards environment and consumer preference for safer products, are viewed by the paints industry as the key challenges to be faced in the immediate term.

Elaborating on the theme `New Coatings for Global India", at the 23rd biennial Indian Paint Conference here, Mr Manu Ahuja, President of Indian Paints Association, said the industry needs to lift the consumers from the current status by educating them and increase investments in creating and sustaining brands that will command a premium.

The industry, according to him, would also need to look at creating a `protracted model' that will outlive the construction boom and other such extraneous factors that have been driving industry growth, and help to deliver exceptional growth year on year.

Industry, he felt, will have to mount efforts to reduce seasonality within the industry and help increase paint buying frequency. He said the need of the hour was innovation, products designed in tandem with consumer insights and elevating painting activity into a high involvement category.

Describing the growing consumer awareness towards safer products as another major challenge, Mr Ahuja said this would mean a re-look at the formulations and associated production processes. There is now a marked shift towards solvent-free, non-toxic and non-polluting paints, and fulfilling these requirements would definitely put pressure on the bottomlines of paint companies, he pointed out.

Role of SMEs

Mr Ahuja said as the paints market matures, players in the SME sector are likely to get increasingly squeezed. The process, he felt, would be catalysed by a cut in excise duty, which has considerably shrunk the price differential between big and small players. "Thus, there is every reason for the Government to delete Mineral Turpentine Oil (MTO) from the Solvent Order 2000 list, as this will give immense relief to the SMEs."

He suggested that the true emerging challenge was the working together, symbiotically, of the organised and unorganised sectors rather than engage in a price war.

According to Mr Ahuja, innovation would be the key driver for the small sector, as they have already realised that this is the only thing that will sustain them in the long run. The Indian paints market will only get more competitive with new entrants Nippon Paints, Jotun, Akzo Nobel and others making big plans for India.

Kolkata,

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