Paint Industry Analysis

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  • Topic: Sri Lanka, Paint, Cost accounting
  • Pages : 35 (2190 words )
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  • Published : February 12, 2013
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Sri Lankan Paint Industry
By Roshan Attanayake

Industry Overview
Size of Sri Lankan paint market,
- Rs. 15 billion in value
- 30-35 million liters in volume.
Comprises of 60 manufacturers.
06 big players controlling 97% of the market.
CIC
Lankem

- Dulux / Akzo / Glidden
- Robbialac

Asian Paints

- Royale / Permoglaze

Causeway
Silicon Coatings
Macsons Lanka

- Luxury / Kenlux
- Nippolac
- Multilac
1

Industry Overview
Decorative and industrial paint segments contribute 85% and
15% respectively to the total volume.
Western province generates 50% revenue.
Seasonal trend,
Seasonal sales turn up on December & March.
Volumes get doubled compared to an average month.
Industry is growing in-line with the GDP growth rate unless
special developments occur (eg: construction boom).
Average price level has shown a 8%-10% year on year growth.
99% dependence on imported raw materials.

2

Industry Overview
In 2007,
41 establishments
# 1343 persons involved in the industry
# Only 5 establishments had more that 25 employees

generated an output of Rs. 7,092,199,787
# 0.35 % of total manufacturing sector output (Rs. 2,046,816,469,680) # 5 major players accounted for 99% (Rs. 7,021,504,787)

with a value addition of Rs. 2,711,060,603.
# 0.34 % of total manufacturing sector value addition (Rs. 793,818,688,939) # 5 major players accounted for 98% (Rs. 2,655,812,453)
Source - Department of Census & Statistics

3

Products & Services
Interior

Decorative

Exterior

Interior
Premier emulsion - for interior walls
Enamel & wood finishes
Primers & wall fillers
Exterior
Weather shield -for exterior walls
Roofing paints

Coatings
Industrial

Industrial paints
Automotive paints
Epoxy – for industrial floors

Ancillaries

Ancillaries - thinner, turpentine
After sales services – eg: 5 year warranty
for weather shield
4

Target Market
House owners
Other building owners
Architects
Building contractors
Professional / non professional painters
Engineers

5

Market Shares of Major Players
Others
3%

Causeway
15%

Dulux
34%
Multilac
10%

Nippolac
14%
Asian Paints
10%

Robbialac
14%

6

Popular Brands
Emulsion

Enamel & Automotive

7

Demand Drivers of Paint
Quality
- durability, final finish
Price
- affordability
Colour range
Free of hassle - ease of application
Distribution - availability
Services including after sales services
Quality value perception (equilibrium between quality & price) is the utmost factor driving the demand for a particular brand. Seasonal impact is a critical demand driver for the industry as a whole.

8

Market Segmentation
Geographical Basis – based on hardware density
Based on income / buying power,
Top tier – high income earners.
generates a revenue of 40%.
Mid tier – middle level income earners.
accounts for highest volume & 40% revenue.
Low tier– low income earners.
generates 20% revenue.
9

Recent Drawback
In 2008 and 2009 volumes dropped by 32% and 18%
respectively due to,
- economic downturn
- then ongoing war
- oil price escalation.
Petroleum price,
- directly affects the price of raw materials
- indirectly affects other costs
(fuel for machinery, transportation).

10

Oil Price Vs Paint Price
100

700

90

600
500

70
60

400

50
300

40
30

200

20
100

10
0

0
2004

2005

2006

2007

2008

11

2009

2010

Rs. / Paint ltr.

$/Oil barrel

80

Oil
Paint

Construction Index
Average Producer Prices 2000 – 2009
Building
Materials
1,000
Bricks

2000
(Rs.)

2001
(Rs.)

2002
(Rs.)

2003
(Rs.)

2004
(Rs.)

2005
(Rs.)

2006
(Rs.)

2007
(Rs.)

2008
(Rs.)

2009
(Rs.)

1,736 

1,815 

1,921 

1,995 

2,297 

2,999 

3,462 

4,183 

4,922 

5,320 

600 

708 

843 

945 

1,282 

1,938 

2,475 

3,168 

3,633 

3,682 

2,648 

2,741 ...
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