Who Knew The Paint Industry Could Be This Exciting

Back in 1942, World State of war Two laid a temporary ban on the import of paints in Republic of india. At the fourth dimension, just a few strange paint companies and an established Indian player, Shalimar paints were bachelor in the market.

During such intense times, it was extremely challenging to launch a new paint company and compete with the prevailing players, yet a 26-year-old visionary entrepreneur - Champaklal Choksey saw this as an opportunity to make an entry in the market place along with three of his friends: Chimanlal Choksi, Suryakant Dani, and Arvind Vakil. All of them initially worked in a small garage at Bombay and finally launchedAsian Paints.

By 1952, Asian Paints had already made an annual turnover of ₹23 Cr, and by 1967, they became Bharat'southward leading paint manufacturing visitor - a position it still holds today.

Asian Paints has become a make that has connected to all Indians, established as India'due south outset-largest and Asia'due south third-largest company in the paints Manufacture.

Creating a Massive Business Empire

The journeying of starting from a small garage to launching their own pigment company wasn't easy; at that place were a lot of subconscious struggles. Back in the time, the new entrant on the block, Asian Paints, could not convince the big distributors of Mumbai.

Therefore, instead of focussing on volumes in big cities like Bombay, Asian Paints chose to serve a neglected market which was the Indian rural areas. They opened their first direct dealer at Sangli, Satara in Maharashtra. Gradually, subsequently Asian Paints seemed to be winning the market in rural areas, the large distributors of Bombay started contacting them and began stocking up on Asian Paints.

Currently, the market size of the paint industry is shut to Rs threescore,000 crore, out of which the organized paint companies accept a share of around 70%. Asian Paints, the market leader, has a market share of more than 50%, which is higher than the combined marketplace share of its three closest competitors - Akzo Nobel, Berger Paints, Kansai Nerolac and Shalimar paints. Asian Paints has been the but company to deliver a CAGR of +xx% for six decades in the entire world.

This has all been achieved due to the visitor's unstoppable focus on creating a potent brand, marketing, and a technology-driven, highly efficient supply chain. Asian Paints has successfully differentiated its products over 75 years in India. It created a remarkable position in the paint manufacture, just as the brand Colgate created in the toothpaste manufacture in India.

The overall paint industry has likewise matured largely due to the credit of the company in developing a differentiated marketing strategy. Every bit a result, the company tin charge a premium of five-10% for most of its products and at the aforementioned time, become a toll leader in the decorative paints segment.

At present, let's take a wait at its massive business beyond the world.

Asian Paints & International Collaborations

As of today, the Asian Paints group operates in 15 countries beyond the world. It is fundamentally operating beyond 4 regions, namely Aisa, Heart East, Due south Pacific, and Africa through the eight corporate brands: Asian Paints, Asian Paints Berger, SCIB Paints, Apco Coatings, and Taubmans, Causeway Paints, and Kadisco.

The company's 8 manufacturing plants across dissimilar locations countrywide, with a combined capacity of 1.73 million KL per annum of decorative paint products, characteristic state of the art technology. Its journey is identified by a steady growth, which is furthered past a perception shift equally a premium brand driving innovations.

The launch of many new products, backed by enquiry, and aimed at fulfilling consumer expectations, adds to this achievement. The exponential increase in its make equity is helping its global expansion efforts.

As of today, Asian Paints has:

26 manufacturing plants across the earth and servicing consumers in over 65 countries.
It currently operates in 17 countries, including the United states, Australia, Sri Lanka, and many more.
Information technology is servicing 150,000+ retailers in India.
Information technology is established as the 9th largest paint visitor in the world and has been the market place leader in India for the past 50 years.
It is Asia's 3rd-largest pigment company and has operations in 22 countries worldwide.

Till today, it has done a lot of international collaborations and has maintained its number 1 position in the Paint Industry in India.

Market Share of Asian Paints and other Players

The supply concatenation of Asian Paints, coupled with a stiff brand recall is truly one of its biggest competitive advantages over its competitors.

Business organisation Model & Growth

Asian Paints' robustness has been credited to identifying consumption trends and patterns early and later constructing strategies around them. Information technology targeted the correct section of people with the correct production and correct strategy because of which today, information technology has a market cap of Rs. two,54,125.07 crores.

Successful advertising remains the crux of the company's marketing strategy. Back in 1954, when the company introduced its mascot- Gattu, the mischievous kid holding a paintbrush in his hands, it appealed to center-grade Indian consumers.

Subsequently, the turning point for the company was in the 1970s, when information technology spent Rs 8cr to buy a mainframe calculator; the 1st private company in India to always buy a computer which was used for demand forecasting with the help of data analytics and improving service levels across the supply chain in comparing to other few companies which later used computers for only payroll and administration work.

Asian Paints was always one step ahead in the business, and this was the start of consistent investment and improvement of supply chain efficiency - which remains every bit the single largest driver of competitive advantage for Asian Paints fifty-fifty today.

Going forward, the IPO proceeds in 1982 were used to expand capacity and launch new products. This helped Asian Paints to constitute the best-in-form supply concatenation practices in the paint manufacture in Republic of india. Asian Paints' sole focus was on the consumer side of the paint industry. This is why it managed to build a strong mother brand and sub-brands similar Ultima, Royale, and more.

The company so scaled up its operations and focussed on improving factories & machines, expansion of capacities, and investment in It.

In today's fourth dimension, Asian Paints has now expanded its presence in Bath Fittings, Kitchen and in services similar Waterproofing Solutions, Color Consultancy, Painting Services, and Interior Designing.

Business concern Innovations

Home Improvement Business

The visitor initiated this project 6 years ago with the aim of offering complete decor solutions and has been stepping up its products consistently to aid its customers build their dream houses. It currently operates in the two classes of kitchen and bath fittings comprising a series of modular kitchens and sanitaryware.

Asian Paints has recently ventured into the cupboard and wardrobe business organization. This segment is a focus area for its future growth, every bit Bharat'due south real estate marketplace is expected to grow, backed by the ascension affordable homes segment drive in the country.

Kitchen Solutions

Asian Paints has entered the kitchen solutions space with the acquisition of Sleek International Pvt Ltd. The paint major has invested Rs 120 crore in picking upwards a 51 per cent stake. Sleek International'south promoters will own the rest.

The Mumbai-based business concern is engaged in manufacturing, selling, and distributing kitchen and kitchen components, including wire baskets, cabinets, appliances, and accessories. Information technology has a retail network of over xxx outlets and 250 dealers.

According to industry experts, the Indian modular kitchen market will continue to tape pregnant growth due to increased housing projects, ascent incomes, lifestyle changes, and the emergence of nuclear families.

Sleek is a subsidiary of Asian Paints and provides consummate kitchen and wardrobe solutions. It is India's largest modular kitchens brand. Its work is famous for innovative and efficient designs, world-form quality, and excellent craftsmanship, built with the state of the art facilities, engineering, and innovations.

Financial & Stock Performance

Stock Performance

In January of 2000, Asian Paints' stock was trading at Rs xvi, and today, the stock price is more Rs 1600, giving 100x returns (excluding dividends).

Since 1991, the share cost of Asian Paints has increased by xx-25% CAGR. For example, an investment worth Rs 1 lac then, is worth around Rs 3 cr today.

Over the concluding 1 year, Asian Paints' share price has moved upwards from Rs 1,802 to Rs ii,601, registering a Gain of Rs 799.6 or around 44.4%.

Overall, the S&P BSE Sensex is upwards xiii.vi% over the year.

Financials

Annual	Mar'xx	Mar'19	Mar'18	Mar'17	Mar'16	Mar'xv
Sales (Cr)	20211	19341	16824	15061	14271	14182
Net Turn a profit (Cr)	2728	2171	1981	1940	1769	1427
Reserves & Surplus (Cr)	10034	9423	8314	7507	6429	4646
ROCE (%)	31.thirty	34.85	36.65	39.33	44.35	44.85

Reserves for Asian Paints take more doubled in v years to 10034 cr, despite the visitor being in a article business operating at a ROCE of > 35 %.

Looking at the fiscal functioning of the visitor, it's evident that the management has done great work in allocating uppercase, identifying gaps in the market, edifice and sustaining potent supply concatenation efficiency.

Endmost Idea

The success of Asian Paints can be credited to the following:

The growth and success of the company tin can exist credited to the fact of creating a successful and strong mother brand, delivered with its strong focus on supply chain management.
Coming upward with new strategies of working right from the early days; from choosing to fix up its showtime dealer in a small town in Sangli, Maharashtra to launching new products andadvertising with the assist of a mascot which emotionally connected to the Indian customers.
Investment in Information technology correct from the 1970s helped the company to gain a big competitive advantage over its competitors in thesupply concatenation.

Fifty-fifty in 2020, large investments indigital technologies past Asian Paints are done to go along its supply chain efficient, tomaintain cost leadership, and however charge a premium for its products.

With growing demand, the company has kept launching new products, attracting existing as well as new customers with the assistance of constructive advertisements, technology innovation, and strong direction. All these factors together created a success story for Asian Paints.

All in all, it is astonishing to think that a small company that began in a garage would go India'due south largest paint company, maintaining its number 1 position in the marketplace for more than l years and creating a paradigm of wealth creation!

Source: https://blog.finology.in/success-stories/asian-paints-story

Posted by: sandersoundes.blogspot.com