Coating industry is moving from 'digitization' to 'digitalization.'

Water borne coatings are going to be the future as the whole world is moving towards sustainable solutions.

S Mahesh Anand, President,  Indian Paint Association (IPA) and President - Nippon Paint (India) Private Limited (Decorative Division)

Could you give us an insight into the decorative coatings market - the size, value, current and expected CAGR, and also the growth drivers?

Indian paint industry size is 50,000 crore out of which decorative paint constitutes 75% (37,500 cr) by value. The decorative segment is growing at a CAGR of 8.5% and expected to grow at the same rate if not for disruptions like Covid-19. Growth drivers include rapid urbanisation, infrastructure development, high disposable income and government initiatives like housing for all, 100 Smart cities etc. 

What is the overall impact of the pandemic on the paint industry?

Covid-19 pandemic has completely halted the paint business to stand still for almost 50 days. 95% of decorative paints are consumed domestically and hence the lockdown abruptly halted the decorative paint industry's production and consumption. This has affected Nippon's business like any other company's in this industry.

What is your take on the shift towards water-borne coatings and what are the factors leading to this shift?

Water borne coatings are going to be the future as the whole world is moving towards sustainable solutions. Every responsible enterprise in this world is committed to the Sustainable Development Goals (SDG) which leads paint industry towards water borne coating solutions. Nippon Paint's DNA is 'Green' and we are completely driven by the green philosophy. In India we are the only paint company where our manufacturing process is green and the products that come out of the factory are also Green. We are Green Co Gold rated and we have GreenPro certified paint products.

To what extent digitization in the coatings industry has become a critical factor influencing growth of the decorative coatings market? 

Coating industry is moving from 'digitization' to 'digitalization' across all departments. Robots are installed in shop floors. State of the art tools are used to for planning and distribution. Point of sales colour matching machines is deployed at all dealer counters to give the customer any share just in time. Colour combinations are offered to customer as virtual visualization of their homes before they actually paint their homes. Dealers are connected on real time basis the depots of customers. Painter purchases are tracked in real time though Nippon Paint's mobile app. We have leveraged all these developments and some developments like the painter loyalty app was pioneered by Nippon Paint.

What is the appreciation level for such coatings from different end-user segments?

While green coatings are slowly gaining acceptance from home painting consumers, UV curable coatings are mostly used in the industrial segment. This would take bit longer to reach the customers of home paints.

Globally, there is increasing traction for implementation of nanotechnology in the decorative coatings sector. What does the Indian scenario look like? 

Nanotechnology is largely used in paint industry as the shift is already on way towards premium functional products. Today paint has moved way away from just a decorative product to a more functional product without losing the decorative imprint. With R&D labs across all 18 odd countries and 2 innovation centres, China & Japan, Nippon Paint is constantly working on solutions for the future.

Both construction and realty sectors have been under pressure due to many reasons. What was the impact of this on Nippon?

Decorative paint industry can further be divided into new painting (30%) & repainting (70%). New painting is primarily the construction and realty sector. Repainting is the replacement market wherein painting happens for festivals, functions, occasions etc., Nippon Paint's business is dependent more on repainting and hence the downturn in these sectors haven't impacted us much as others.

How does the industrial coating market look like now?

Industrial paint market is growing at a much lower CAGR of 4% to 5%. Market is still in solvent borne back bone. Slowing shifting to high performance Direct to Metal (DTM) water borne solutions.

What are the major challenges the coating industry is facing and how those can be ironed out?

Volatile crude price trends, depreciation of rupee are major challenges to the coating industry. Frequent government regulations and policy changes are also some of the challenges this industry has to overcome. Constant engagement with the government machinery is the solution to resolve the challenges.

Please also give us your assessment on the future of the coating industry and Nippon road map to sustain the leadership position.

Post Covid-19 customers would look for wellness products across all categories and so do in paints. We have a wide range of Wellness Series which are promoted as 'Sanitize your Walls' campaign. To cater to the safety requirement, Nippon Paint has curated Health and Wellness range of wall paints. The range consists of Nippon Paint odourless aircare, Nippon Paint Kidz, Nippon Paint Satin Glo+ and Nippon Paint Satin Glo prime. These paints cater to the various wellness needs of a family. We foresee this trend would continue in medium to long term in India and Nippon would lead the pack with its heritage and exposure.

What makes Nippon so successful in most of the segments it has entered?

Whatever success we have attained so far is in the segment of premium functional products. We were the pioneers to launch paints with functional properties - anti bacterial emulsion, odourless emulsion, air purifying emulsion, heat resisting emulsion, anti-stain emulsion, multipurpose emulsion etc., we have never deviated from our vision and we constantly keep innovating and introduce technologically superior products in Indian market with the same commitment of being green always. We are truly Hi Tech and International Quality.

What determines a buyer's purchase decision

• Reference from friends, relatives and word of mouth
• Painters suggestions
• Dealer's recommendation
• Recommendations from Architects and Interior designers
• Differentiated and effective consumer communication
• Heightened brand engagement and awareness

Initiatives to sustain the pressure and readiness in the post-covid scenario

We were ready for production after cleaning, sanitizing and fumigating our plant from 5th May'20 onwards when the government allowed the phased relaxation. All our warehouses and depots were cleaned and sanitized. The entire downstream supply chain was made to follow hygienic practices. Every paint box and cans carried 'Sanitized for your safety' stickers to give complete confidence to our customers who buy Nippon products post the Covid-19 lockdown. During lockdown we constantly engaged with our internal and external stakeholders with useful interactions on how to reboot and restart post lockdown. All our employees were instructed on proper Govt guidelines to be followed post lockdown.

We further prepared guidelines for our Channel partners and dealers on how to restart their business operations. We arranged sanitization for our key dealers through approved applicators. Painters are an important stakeholder in the value chain who forms part of the informal sector of our economy. We also provided them with financial support during the lockdown and distributed essential groceries and household items.

We have introduced 'ProSafety' painter certification where the painter can confidently get back to his work. All our painters were given health insurance for Covid-19 as a mark of respect for their contribution to our business. Considering that painters are most exposed to risks associated with Covid-19 exposure, Nippon Paint recently announced its foray into the health and wellness segment with the launch of 'MEDIFRESH' - a range of PPE (Personal Protective Equipments) products including hand sanitizer, facial masks, and hand gloves. We are further providing them with sanitizer sachets for easy use and to encourage safe painting practices. These sachets will be given for free while purchasing paint. This will aid in ensuring the safety of the painters and reassure customers that the painters are following proper safety protocol.

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