DEMAND-SUPPLY SCENARIO of the Paint Industry
Paint demand is intrinsically related to economic development. The demand for decorative paint in India mainly arises from two segments viz construction of new building and retail demand for refurbishment.
While the demand for industrial paint comes from industries like automobile, consumer durable, shipping engineering etc. the demand for paint has grown at 10% for last five years. After the sluggish growth in late 80’s and early 90’s, industry grew at rapid pace of more than 12% from 1992-96.
High excise duties and lack luster industrial growth resulted in low growth of 2-4% during 1987-92. After 1992, the industry picked up aided by improving economic condition and rationalization of excise structure. Almost the entire growth can be attributed to volume increase as price realization has increase at less than 5%p.a. over the last two years demand slows down due to economic slow down.
According to Indian Paint Association, demand will rise from current 0.6mn tones per annum to 1mn tpa by 2003.demand from decorative paint will be led by the household construction industry which is expected to grow almost 8% over the next five years considering the extreme shortage of housing and the government thrust on encouraging the housing activity are also likely to shift more towards rural areas.
The industrial segment will grow faster due to the lower base and fast growth in major users like consumer durable and automobile.
Paint demand is intrinsically related to economic development. The demand for decorative paint in India mainly arises from two segments viz construction of new building and retail demand for refurbishment.
While the demand for industrial paint comes from industries like automobile, consumer durable, shipping engineering etc. the demand for paint has grown at 10% for last five years. After the sluggish growth in late 80’s and early 90’s, industry grew at rapid pace of more than 12% from 1992-96.
High excise duties and lack luster industrial growth resulted in low growth of 2-4% during 1987-92. After 1992, the industry picked up aided by improving economic condition and rationalization of excise structure. Almost the entire growth can be attributed to volume increase as price realization has increase at less than 5%p.a. over the last two years demand slows down due to economic slow down.
According to Indian Paint Association, demand will rise from current 0.6mn tones per annum to 1mn tpa by 2003.demand from decorative paint will be led by the household construction industry which is expected to grow almost 8% over the next five years considering the extreme shortage of housing and the government thrust on encouraging the housing activity are also likely to shift more towards rural areas.
The industrial segment will grow faster due to the lower base and fast growth in major users like consumer durable and automobile.