THE 51st Annual General Meeting of the Indian Paint Association was held in Kolkata on the 8th September 2014. Mr Firhad Hakim, Minister-in-Charge, Department of Municipal Affairs and Urban Development, Government of West Bengal was the chief guest and Prof. Binay K Dutta, Chairman West Bengal Pollution Control Board was the Guest of Honour on the occasion.
Welcoming the members and invitees Mr. Jayakumar Krishnaswamy, President, IPA spoke about the current scenario in the Indian Paint Industry and the present opportunities for growth for paint industry. He also delved on the history of IPA and its achievements in the year gone by. The following is the gist of his speech:
“India: The new momentum of growth: Ever since the economic reforms were set in 1991, the Indian economy had grown at a steady pace in comparison to some of the other developing economies around the world. These reforms have had a broad impact on the economy, as manifested by the government's investor-friendly policies and the contribution of the private sector. Today, India has developed into a trillion-dollar economy on the back of a self-sufficient agricultural sector, a broad industrial base and a stable financial and services sector. The overall growth of India's real GDP was 4.78% during 2013-14 compared to 4.5% during 2012-13. According to the Economic Survey 2012-13, the country's GDP had posted a CAGR of 7.9% for the 10-year period ending 2012–13. India has the second fastest growing services sector with a CAGR pegged at 9%. Also, India was ranked 12th in terms of services GDP in 2012 among the world's top 15 countries. According to data released by the Reserve Bank of India, India's foreign exchange reserves and foreign currency assets have grown significantly. During 2013-14, the country had registered a fiscal deficit of 4.5% of GDP, while the current account deficit had moderated to 1.7% of GDP from 4.7% of GDP during 2012-13 after a crackdown on gold imports. The Index of Industrial Production (IIP) had rallied to grow from (-) 2.5% in May 2013 to 4.7% during May 2014.
Mr. Jalad Dani, Mr. Binay Dutta, Mr. Firhad Hakim, Mr. Jayakumar Krishnaswamy & Mr. Saugat Mukherjee
“The demographics of India is quite young with around 65% of the population in the age group of 15–64 years with the median age being 26.7 years, which is lower than many countries in the world. India benefits from the burgeoning domestic demand created by this young demographic whose consumption is driving the middle class. Urbanization and innovation plays an important role in driving the consumption pattern of the populace. It is estimated that by 2025, the country would become the world's fifth-largest consumer market with immense opportunities and challenges as well. Between 1990 and 2010 the urban population in the country had increased from 25.5% to 30.9%. Going forward the urban population is expected to touch 38.9% by 2030. These characteristics make India an attractive destination for foreign direct investment. UNCTAD's World Investment Prospects Survey 2012–14 projects India to be the third most attractive global destination for FDI. Not surprisingly FDI in India was reported to have increased by 8% (Y-on- Y) in FY 2014 as per data released by the Department of Industrial Policy and Promotion. A relatively stable government, a strong democratic set-up and a reliable judiciary system have attracted several renowned global corporate giants who are leaders in their respective fields. According to the Global Competitiveness Report 2013–14 which covered 148 countries, India stands at a respectable 60th position. The country does even better on key parameters such as innovation (41st) and market size (3rd).
Mr. Jayakumar Krishnaswamy
The Indian Paint Industry: Current Scenario
“The contribution of the Indian Paint Industry in the overall economic growth and development of the country has been significant. We have seen that historically the paint industry almost always grew at least 1.5 times the GDP growth. During 2013-14, the overall production of paints in the country was estimated to be about 3115 million litres having achieved a growth of around 6% over the previous year. In value terms the industry estimated at Rs. 31,360 crores grew by about 12% during 2013-14. The overall per capita consumption of paints is estimated to be 2.6kgs per anum, with 2 kgs per annum being the per capita consumption in the decorative segment and the balance in the industrial segment. The contribution of the decorative and industrial paint segments during 2013-14 was estimated to be in the ratio of 73:27. The CAGR for the paint industry over the previous four years has moderated from 13.1% to 12.8% during 2013-14.
Smart Cities & Infrastructure: Opportunities for growth for paint industry
“The Central Government has allocated Rs. 7060 crores in the current fiscal for developing 100 smart cities in the country to solve significant problems in the areas of population, housing, transportation et al. Creating world class cities would take the load off the existing metros which are plagued with day-to- day hindrances like safety, security, roads, sewerage etc. The smart cities, assuming a population of two lakh in each city, would generate a demand for 5 million new homes. The fast expanding middle class population, predicted to grow to 600 million by 2025, with increasing disposable income and aspiring for quality products and services along with the government's mission to provide home to all within 2022 is expected to drive the demand for decorative paints. FDI in the housing segment, estimated to grow to USD 25 billion over the next decade, compounded by the rapidly developing Tier II and Tier III cities would unfold enormous opportunities for the growth of the decorative paints segment in the near future. In fact during 2013-14, we have seen that increasing demand from the Tier II & Tier III cities had significantly contributed to the overall growth of the paint industry.
“The growth in the industrial paints segment is largely driven by the demand from the automotive sector. Nearly 45% of industrial paints produced in the country today are used in the automotive industry. The auto industry accounts for nearly 22% of the country's manufacturing GDP and is currently the seventh-largest in the world. The Indian auto market has the potential to dominate the global auto industry and an enabling environment with special focus on exports can potentially double the automotive sectors contribution to the GDP. During 2013-14 the automotive industry has grown by about 10.35%. A fall in interest rates and stable fuel prices are expected to create an environment conducive for growth in this industry.
“Industrial infrastructure is another area which promotes growth of industrial paints. Development of infrastructural assets accelerates the economic growth of a nation. We have seen how lack of upkeep, particularly from corrosion can erode the infrastructural assets resulting in incalculable loss to the exchequer. The paint industry has come a long way in manufacturing and promoting innovative corrosion resistant paints. However, the Association is of the view that the government should provide necessary incentives to the industry for promotion of anticorrosive paints. Augmentation of capacities in the defence, roadways, power plants and railways sectors and encouraging private- public participation in these sector scan unfold immense opportunities for promotion of specialized coatings
IPA: History, Legacy & Role
“The Indian Paint Association, affiliated to CII is the largest representative body consisting of the paint and raw material manufacturers and suppliers. IPA was established in 1961 with the objective of promoting and protecting the interest of the industries engaged in the manufacture of paints, enamels, lacquers, varnishes and all other materials associated with the production and sale of those commodities by establishing a code of conduct and fair practices for the betterment of the industry and the public. Nearly 80% of the entire production of paints in the country is contributed to by the members of IPA. The Association represents not only the large players but also the micro, small and medium enterprises that operate in the fragmented paint industry. Apart from representing the interests of the industry to the Government, the Association has taken initiatives to diffuse technical, industrial and commercial knowledge regarding the manufacture and marketing of paints, lacquers, varnishes and dry colours and their allied products including the import and export of raw materials and finished products. The small scale players are constantly challenged in terms of affordability of raw materials, technology, manpower availability and realizations. Since the small scale enterprises in the paint industry provide employment to a significantly large workforce we would appeal to the Government to address the issues and concerns of the SME segment for creating a favourable environment for their growth and development.
View of the audience
IPA: Achievements of the year gone by
“Environmental protection is a subject of utmost importance for the paint industry. Our Association had in the past submitted a proposal to the government for voluntary withdrawal of lead from select specifications of paints used in architectural home segment. We understand that Bureau of Indian Standards is working on the proposal and the new specifications could be expected soon. During the year our Association had also engaged with Quality Council of India on “Lead safe paint scheme”. Over the last several decades the industry has phenomenally graduated by adopting superior technology to manufacture innovative paint products conforming to global norms and best practices. Manufacturers have also started experimenting with cross-utilize technologies to create better paints in terms of performance, durability and environmental compliances. In fact with newer technologies available today, paint manufacturers are producing water based paints with zero discharge in the environment. Unfortunately, despite all the technological advancements that the industry has imbibed and continues to do so, the industry is still classified in the red category as a harmful and polluting industry. With the demand for paints increasing, the industry is facing daunting challenges to augment their existing capacities and also in setting up new production facilities. Our association has approached the Central Pollution Control Board with a request to kindly review the long pending demand for the reclassification of the paint industry to the orange & green categories. We are happy to know that a Committee has been set up under the Chairman, West Bengal Pollution Control Board to review the classification of red category industries and we humbly appeal that the reclassification of the paint industry may kindly be looked into by this expert Committee.
“A growing economy like India requires a large number of skilled manpower. Lack of quality trainers and training institutes has created roadblocks for growth in every sector of the economy. To address the skill gaps in the paint industry, our Association had approached National Skill Development Corporation to establish the Sector Skill Council for the coatings industry with the objective of creating an enabling eco-system for skills development. The Sector Skill Council proposed by the Association would identify the various skill requirements of the industry across the entire value chain and act as an enabler for enhancing the delivery mechanism for promoting the skills sets required by the industry. The paint consumption in the country is estimated to be 24 lakh tons per annum which is equivalent to 16 lakh kilolitres. Hence it can be safely deduced that 1.6 million painters would be actually available today for painting applications which excludes painters required for industrial applications. With the industry foreseeing a consumption growth of 10%, it could be estimated that 1.5 lakh additional skilled painters would be required every year for applications. The Sector Skill Council would set the standards for imparting skills sets to both the existing and new workforce joining the paint industry across the entire value chain, while the existing training institutes including ITIs and other private institutes would be actually imparting the skills training. The proposal, submitted by the Association, has identified 20 skills of which 14 skills relate to the employees working in the paint manufacturing units while the balance 6 skills relate to individuals working outside the industry, but who have a tremendous impact on the p e r f o r m a n c e o f t h e c o a t i n g s manufactured. IPA had engaged with the stakeholders across all regions to understand the expectations of the industry.
“The Regional Committees during the year had organized various presentations and workshops that have benefited the members. The Association had represented to the government for reduction of customs duty on imports of Titanium Dioxide, one of the major raw materials used in paint manufacturing. Unfortunately, the industry plea was not favourably considered by the government in the budget of 2014-15.
“Our Association is organizing 27th edition of the Indian Paint Conference during 9th- 11th January 2015 at Hotel ITC Sonar, Kolkata. Mr. Man Mohan Kedia, Convener for the Conference, with the support of the Organizing Committee is working tirelessly for the success of the Conference. This flagship event would see participation from national and international paint companies and raw material suppliers deliberating on the theme “Innovate to Succeed- New Markets, New Technology, New Skills”. We request one and all to come forward and extend wholehearted support and participation for the success of the Conference.”
Inaugurating the meet, the chief guest and West Bengal Minister Mr Firhad Hakim, said that Bengal's 'Smart cities would be painted with blue-and-white scheme for buildings. The state government has decided to amend the Kolkatta Municipal Corporation laws to provide tax breaks to those in Kolkata who paint their houses in blue-and- white. "Smart cities should look smart and buildings need to be painted regularly due to climatic conditions of this part of the region.", added Mr Hakim. He also said that the money spent in beutification of the buildings is for longevity purpose and for the protection of the buildings from the harsh weather conditions.
Prof. Binay K Dutta, Chairman WB Pollution Control Board also spoke on the occasion.
The meeting ended with a vote of thanks by Mr Jalaj Dani, vice president IPA.
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