Notwithstanding large conglomerates and cement companies showing keen interest in paint business, adhesive and home improvement company Pidilite Industries has ventured into the decorative paint segment with a soft launch, ‘Haisha’.
Pidilite’s entry into the segment comes at a time the cement and paint companies are launching waterproofing products and adhesives, targeting the entire home-building space as one category. The company’s venture into decorative paint business was largely driven by dealers who were requesting to complete the product range, said Bharat Puri, Managing Director.
“Right now, I would term the decorative paint venture as a range completion exercise, and will gauge the response for 3-6 months before we take a call on the next move,” he said at an analysts’ call.
Pidilite has the advantage of having overall distribution network and customers’ familiarity with the company’s products. Puri himself is no stranger to the paints business, having spent 16 years at Asian Paints. Under his leadership, the paint company had broken ground in new categories, in both interior and exterior paints.
Incidentally, Pidilite’s entry into decorative paints comes in close heels of Grasim Industries and JK Cement entering the segment. It will also be competing with exiting players — JSW Paints, Nippon, Kamdhenu, Shalimar, Indigo and other paint companies — who are scrambling to gain market share from industry leaders Asian Paints and Berger Paints.
With the competition intensifying, the leaders in the business are also expanding to protect their market share. The ₹70,000-crore paint industry in India is expected to add 2.5 million kilolitres of capacity, at an investment of ₹20,000 crore over the next three years. The planned expansion will be about 20 per cent of the existing capacity.
Aditya Birla Group’s Grasim alone will invest 50 per cent or ₹10,000 crore of planned capex, followed by Asian Paints at ₹8,000 crore. Other companies are also investing ₹2,000 crore for expanding their respective capacities.
Berger Paints seems unperturbed by the growing competition. Abhijit Roy, MD of the company, said the basics of the industry are the same for anyone seeking to establish a presence and carve out a market share. The challenges for the new entrants will be to build a brand from scratch in the shortest possible time without burning up too much cash and to establish a reasonably wide distribution network in the shortest possible time, he added.