Company Products Established Founder Distribution Production plants

Similar documents
Company Products Established Founder Distribution Production plants

BUY. Asian Paints Limited. Introduction. Investment Rationale. Valuations. 15 April, 2008

Fortis to acquire strategic stake in Parkway Holdings, Singapore

Paints Industry. October 27, 2017 I Industry Research

In a challenging environment, GE businesses are poised to perform with rigor and to capture new growth. Technology Infrastructure, Energy

ble of Contents This is a licensed product of Ken Research and should not be copied

Mr. Thachat Viswanath Narendran

5A titlepage.pdf 3/14/12 4:01:02 PM C M Y CM MY CY CMY K SAMPLE

Annual Press Conference Bilfinger Berger SE, Mannheim March 21, 2012 Roland Koch, Chairman of the Executive Board

World Coins and Blanks

Paints. Paints. WEBSITE

THE STARS GROUP 2017 ANNUAL AND SPECIAL MEETING MANAGEMENT PRESENTATION MAY 10, 2018, TORONTO, 11:30 (ET)

Report on Operations 1999

Guidelines to Promote National Integrated Circuit Industry Development : Unofficial Translation

PRIVATE EQUITY INVESTMENT IN INDIA WITH SPECIAL REFERENCE TO EDUCATION SECTOR

Weathering the Storm The Case of Abu Dhabi

Recent marquee transactions

SuStainability R e p o R t

Friday, 22 December, 2017

Asian Paints Wood Finishes

Helping People Worldwide Build their Financial Security

Confirms 2013 Financial Guidance

DBS GROUP HOLDINGS LTD. 15 th Annual General Meeting & Extraordinary General Meeting. 28 April 2014

Joint Venture Announcement. 27 August 2018

Globalisation increasingly affects how companies in OECD countries

Nasir, Dao PKM Abdul Partner PwC Legal (Vietnam) Co., Ltd

KKR & Co. Inc. Goldman Sachs U.S. Financial Services Conference December 4, 2018

Textron Reports First Quarter 2016 Income from Continuing Operations of $0.55 per Share, up 19.6%; Reaffirms 2016 Financial Outlook

Asian Paints Painting Guide

Lupin Limited Annual Results FY12. Investor Presentation May being

Measurement for Generation and Dissemination of Knowledge a case study for India, by Mr. Ashish Kumar, former DG of CSO of Government of India

QANTM Intellectual Property Limited (ASX: QIP)

A: Jeff Immelt, GE chairman of the board and chief executive officer:

Investcorp growth continues with net income rising to $125 million

Textron Reports Second Quarter 2014 Income from Continuing Operations of $0.51 per Share, up 27.5%; Revenues up 23.5%

Advisors. Firm Overview

Kasen International Holdings Limited. (Stock Code: 496)

4 November The Manager Company Announcements Australia Securities Exchange Limited Level 4, Bridge Street SYDNEY NSW 2000

Reports of Woo Wing Thye s talk on the implications of China s emergence as an major economic power on the Malaysian economy, Institute of Strategic

Rovio Entertainment Corporation Annual General Meeting April 9, 2019 CEO REVIEW Kati Levoranta

Textron Reports Third Quarter 2014 Income from Continuing Operations of $0.57 per Share, up 62.9%; Revenues up 18.1%

HSBC Iberian Banking Conference

Sheet metalworking. Shaping up. the

Under the Patronage of His Highness Sayyid Faisal bin Ali Al Said Minister for National Heritage and Culture

TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY: THE MALAYSIAN EXPERIENCE

Pierre Brondeau Vice President, Business Group Executive Electronic Materials Regional Director - Europe Lehman Brothers Conference Call November

Understanding Asia s conglomerates

Transition PPT Template. J.P. Morgan. June 2015 V 3.0. Energy Equity Conference June 27, 2017

ASEAN: A Growth Centre in the Global Economy

Ministry of Industry. Indonesia s 4 th Industrial Revolution. Making Indonesia 4.0. Benchmarking Implementasi Industri 4.0 A.T.

Capcom Co., Ltd. (Tokyo and Osaka Exchanges, First Section, 9697) Results of Operations and Strategies First half of fiscal year ending March 31, 2013

Capcom Co., Ltd. (Tokyo Exchanges, First Section, 9697) Results of Operations and Strategies First half of fiscal year ending March 31, 2014

UNITED INTERNET. Business Applications Strategic Partnership with Warburg Pincus. November 8, Investor Presentation November 8, 2016

First Generation Entreprenur: A Case Study of Modest Infrastructure Pvt Ltd.

Murugappa Group. An Overview

Interim Report. 1 January 30 September Sales declined by 6 percent and reached 9,692 MSEK (10,317) Sales were up 2 percent in local currencies

Capcom Co., Ltd. (Tokyo Stock Exchange, First Section, 9697) 3rd Quarter Report Fiscal year ending March 31, 2018

ANALYZING START-UP AND INVESTMENT TRENDS IN THE MOBILITY ECOSYSTEM

Nihon M&A Center Inc. Corporate Profile

4 th Quarter Earnings Conference Call

Commercialization of Intellectual Property (IP) for Small and Medium Enterprisers (SMEs) in India

IHH HEALTHCARE BREAKS GROUND FOR GLENEAGLES SHANGHAI AS PART OF RMB8 BILLION PUSH INTO GREATER CHINA

PRESS KIT 2018 BARENTZ INTERNATIONAL BV

Introduction to Istithmar World Capital. October 2008

The resulting net sales were 87,170 million yen (up 13.2% from the previous fiscal year).

SEMICONDUCTOR INDUSTRY ASSOCIATION FACTBOOK

Pacific Star Development s CEO named 2017 Malaysia Real Estate Personality of the Year

LUPIN LIMITED Q3FY17 Investor Presentation February 09, 2017

IDEO PROJECT. Venture Capital & Private Equity LATVIA

Yatra Capital Limited announces its fourth investment in Real Estate in India

For personal use only

MAYBANK INVESTMENT BANK AFFIRMS LEADERSHIP POSITION BY GARNERING SEVERAL MORE PRESTIGIOUS AWARDS

PwC Deals $42B. Global Pharma & Life Sciences Deals Insights Q Update

For personal use only

Capcom Co., Ltd. (Tokyo and Osaka Exchanges, First Section, 9697) 1st Quarter Report Fiscal year ending March 31, 2013

Global Online Jewelry Market Focus on the U.S., China and India: Trends & Opportunities ( )

WIPO REGIONAL SEMINAR ON SUPPORT SERVICES FOR INVENTORS, VALUATION AND COMMERCIALIZATION OF INVENTIONS AND RESEARCH RESULTS

Investor Presentation. November 2018

The Internationalization of R&D in India: Opportunities and Challenges. Rajeev Anantaram National Interest Project March 2009

NEWS RELEASE FOR WIRE TRANSMISSION: 8:30 A.M. EDT, FRIDAY, APRIL 17, William Zeile: (202) BEA 09-14

7-8-9 June, Exploring Unknowing Facts of Nonwoven Technologies and Usage. Bombay Exhibition Centre, Mumbai, India

Bringing More to the Table

Capcom Co., Ltd. (Tokyo Exchanges, First Section, 9697) 3rd Quarter Report Fiscal year ending March 31, 2016

Software Production in Kyrgyzstan: Potential Source of Economic Growth

Innovating the future with InnoValues

ASX Announcement. 20 November AGM Presentations

UTILIZING COMPREHENSIVE ADVANTAGES TO EXPAND PPP AND INFRASTRUCTURE FINANCING IN ASIA PACIFIC

ALANCO TECHNOLOGIES INC

Gaming. Everyone s a. Gamer!

HOTELS, TOURISM & LEISURE. Hotels, Tourism & Leisure

AC*. Alliance For Capital Access

2Q 2017 Results. 11 Aug 2017 MERMAID MARITIME PUBLIC COMPANY LIMITED

April By Type of Approach- Transfemoral and Transapical. By Region- North America, Europe, APAC and RoW

RAZER INC. CORPORATE PRESENTATION

Chapter 5. Forms of Business Ownership and Organization

ISRAEL FROM ORANGES TO APPLE

HY2015. Disciplined performance management. Redefining the future for people and places 1. Attractive growth fundamentals & opportunities

4 th Quarter Earnings Conference Call

IR Presentation. March 2014

Strategic alliances. and their role in the management of technology. dr. Krzysztof Klincewicz Graduate School of Innovation Management

Transcription:

ASIAN PAINTS LIMITED Asian paints is the largest paints company in India and one among the top ten decorative paint companies in the world. Background Asian Paints Limited was established in 1942 as a partnership firm by four friends Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R.Vakil to manufacture paints in a garage in Mumbai (Bombay). From its humble beginnings, the company has moved on to become the largest paints company in India with a market share of 30 per cent.the company with a turnover of US$ 535 million on standalone basis and US$ 640 million on consolidated basis (including turnover of all its subsidiaries) is one of the top ten decorative paints companies in the world. Its reach and dominance in the Indian market can be gauged from the fact that it is more than twice the size of its nearest competitor in India and it has been the market leader in paints industry in India since 1968. The company operates in 22 countries and has 29 paint manufacturing plants in the world which service consumers in over 65 countries.the company operates around the world on its own and also through its three subsidiaries Berger International Limited, Apco Coatings and SCIB Chemicals.The company aims to become one of the top five decorative paint companies in the world and has embarked on an aggressive strategy of expanding its global operations. The promoters hold the majority stake in the company (46.8 per cent of the equity stake). The next largest shareholders are the foreign institutional investors (19.5 per cent stake), followed by Indian public (16.5 per cent stake). Domestic banks, financial Institutions, mutual funds and insurance companies hold 13.4 per cent stake. Corporate bodies and non-resident Indians hold the remaining stake. Products and brands Asian Paints has a wide range of products, which cover almost all the requirements of the decorative paint and industrial coating segments. Decorative paints include interior and exterior wall paints, wood and metal paints, wood finishes and ancillary products.the company is the market leader in India in interior wall paints and has a wide range of products for this segment ranging from premium emulsion brands like Royale Luxury Emulsion to economy distemper brands like Utsav Acrylic Distemper. In the exterior wall paints Company Products Established Founder Distribution Production plants Asian Paints Decorative 1942 C.H. Choksey, 65 countries globally 29 plants in 22 Paints, Industrial C. N. Choksi, countries Coating segments S. C. Dani, Arvind R.Vakil 21

22 segment the company has been the principal driver of growth ever since it launched its two winning brands, Apex and Ace. In wood and metal paints segment the company again offers products across all price points including Apco Premium Gloss Enamel in the luxury segment, Apcolite in the middle segment and Gattu Synthetic Enamel in the economy segment. The company similarly has many products and brands for the wood finishes as well as ancillary uses like putty. Its main brands in wood finishes are PU Wood Finish Exterior, Melamyne and Touch Wood. In the industrial coating segment, the company directly operates in the protective coatings subsegment. It has a presence in the other two subsegments i.e. automotive coating and powder coating, through Asian PPG Industries (a 50:50 Joint Venture with PPG of USA) and Asian Paints Industrial Coatings Ltd. (a 100 per cent subsidiary of Asian Paints) respectively. Asian PPG Industries services the conventional end of the market i.e. the original equipment segment of the automotive industrial coatings segment with its brands ASPA and APCA, while Deltron and Bilux serve the high end of the market. Some of the brands in the powder coating segment include Apcoshield and Hawcoplast. Other industrial coating offerings by the company include Metacare range of industrial coatings and Apcofloor range of floor coatings and coatings for road markings. The company is also a manufacturer of chemicals phthalic anhydride and pentaerythritol, which are raw materials for the paint industry. Financial Analysis Asian Paints has shown very strong financial performance in the last five years. Its gross sales have witnessed a CAGR of 14 per cent during the period 2001 to 2005, with gross sales reaching US$ 535 million in 2005.The company also earned US$ 105 million in 2005 from its international operations spread over 22 countries. Profit after tax has grown at a higher CAGR of 14.8 per cent in the same time period. The company s return on net worth and return on capital employed have both increased substantially over the years because of better control on raw material costs, overheads and reduction in financial expenses.the financial expenses have gone down from 1.5 per cent of gross sales in 2001 to 0.12 per cent of gross sales in 2005 primarily because of reduction in long term borrowings. Asian Paints contribution in making Made in India global Asian Paints is one of the most globally diversified companies of India.The company operates in 22 countries with 29 manufacturing facilities and services consumers in 65 countries across the world.the company operates in five regions all over the world through its own operations and its three subsidiary companies. To increase its global market presence, the company has focused on setting up overseas ventures rather than exporting paint and coating from India. In order to achieve its aim of becoming one of the top five decorative paint companies in the world, the company has been following a strategy of entering fast emerging markets where market penetration is relatively low and expected growth rates are high. The company started its global operations in 1977 when it entered Fiji through a joint venture. Thereafter, Asian Paints (South Pacific) Ltd. was formed in 1979 in Fiji and this company went on to become the largest paints company in Fiji.This was soon followed with five more joint ventures one

each in Tonga, Nepal, Solomon Islands,Vanuatu and Australia. The company s joint ventures in Mauritius and Oman commenced operations in 2000.These two ventures were formed to act as hubs for increasing the market presence of the company in Africa and Middle East. However, the company exited Mauritius recently, as the paints market in this market was stagnant for many years and it did not fit into the strategic plan of the company to be present in fast growing markets. The company has also focused on acquisitions to add to its basket of markets. In 1999, it acquired a controlling stake of 76 per cent in Delmege Forsyth & Co, which was Sri Lanka's second largest paint company at that time.this was the first overseas acquisition by Asian Paints in its history. This was soon followed by acquisition of the entire paints business of Pacific Paints Company Pty Limited, Australia in 2000. In its pursuit towards globalisation of its operations, the company made two significant overseas acquisitions in 2002. It first acquired 50.1 per cent stake in Berger International Limited and then went on to acquire 60 per cent stake in SCIB Chemical, Egypt, the fifth largest paints company in Egypt at the time of its acquisition.the acquisition of Berger International gave Asian Paints an entry in South East Asia and this helped the company to increase its geographic reach in 11 more countries including China, Singapore,Thailand, Malaysia, Myanmar, United Arab Emirates, Jamaica, Barbados and Trinidad & Tobago. SCIB Chemical fitted well within the company s plans to expand its operations in the emerging markets and serve the consumers in the growing Egyptian market and other promising markets in Africa. To take its plans forward, the company set up a manufacturing unit in Bangladesh in 2002 mainly to cater to the opportunities available in Bangladesh. The Bangladesh plant is a 71:29 joint venture between Asian Paints and Confidence Cement Ltd., one of the largest cement producers in Bangladesh.This venture has helped the company to consolidate its position in the South Asian market. The company through its subsidiary in Fiji,Asian Paints (South Pacific) Ltd. also acquired Fiji s fourth largest paints company Taubmans Paints (Fiji) Ltd., to consolidate its leadership position in the country.this acquisition also included Taubmans paints business in the neighbouring Samoa Islands. Regions Countries Operating company South Pacific Australia, Fiji, Solomon Islands, Asian Paints and its subsidiaries Samoa,Tonga,Vanuatu South-east Asia China, Malaysia, Myanmar, Singapore,Thailand Berger International and its subsidiaries South Asia India, Bangladesh, Nepal, Sri Lanka Asian Paints and its subsidiaries Middle East Bahrain, UAE Berger International and its subsidiaries Oman Asian Paints and its subsidiaries Egypt SCIB Chemical Caribbean Barbados, Jamaica,Trinidad & Tobago Berger International and its subsidiaries 23

The company has set forth for itself a global vision Think Global, Synergise Regional and Act Local. In this regard, the company has embarked on its biggest international initiative called E-Strides, an ERP initiative that would involve all its international operations. Under E-Strides, the company is reviewing its current business processes to improve them in the context of changing business scenarios. This involves a host of activities like benchmarking processes with best practices, standardising them to leverage global knowledge and providing adequate controls. Factors fuelling Asian Paints global initiatives Many factors, which have made Asian Paints a household name in India, have also contributed immensely in its global expansion.the company is an innovator and has introduced thousands of colour shades for customers to choose from. Apart from this, it has been a market creator like in the case of exterior paints at a time when exterior paints used to be mostly cement paints. It has been following an aggressive marketing strategy in India and this has helped it in entering and competing with multinational companies in global markets. The company has diligently followed its vision - Think Global, Synergise Regional and Act Local to drive its performance. In 1999, the company embarked on an ambitious plan to emerge as one of the top 10 decorative paint companies in the world. Once this goal was achieved, the company set for itself a much higher target, to become one of the top five decorative paint companies in the world. Simultaneously, the company explored opportunities of building long term value in the Industrial coatings business through alliances with established global partners. All the strategies and policies of the company have been structured to achieve these goals. To capture the global markets, it has been following the strategy of entering fast growing markets with robust demand and low per capita consumption of paints. Asian Paints has targeted companies in emerging markets of Africa, South-east Asia and South Asia, Middle East and Pacific region. In order to increase the pace of globalisation, the company has also focussed on acquiring international companies with widespread presence in the global markets like the acquisition Berger International. In order to capture the maximum market share and to create new markets, the company manufactures a wide range of paints, from acrylic emulsions to synthetic enamels and from automotive paints to industrial paints. Enabled by vertical integration, it has also diversified into specialty products such as Pentaerythritol and Phthalic Anhydride. Future Plans The company plans to consolidate its dominant position in India by launching new products in line with the market developments in both decorative paint and industrial coating segments. In order to realise its aim of becoming a top five decorative paints company in the world, the company plans to constantly look for both organic and inorganic growth opportunities in existing and new markets. The company shall further explore opportunities of building long term value in the Industrial coatings business through alliances. The company is focusing on further improving the operations of all of its subsidiaries in India and abroad and has already launched E-Strides, an ERP initiative through which all the overseas ventures 24

are being covered for sharing of global knowledge, best practices and better control on operations. The company s objective is to be among the top three players in each market where it is currently operating or plans to operate in the future. Globalisation at a glance Ranked amongst the top ten decorative paints companies globally, with a presence in more than 75 countries Manufacturing facilities in 22 countries across Asia Pacific, Middle East and the Caribbean Historically has focussed on acquisitions for global expansion Delmege Forsyth (Sri Lanka), Pacific Paints (Australia), Berger International, SCIB Chemical (Egypt),Taubmans Paints (Fiji) Company strongly driven by its global vision Think Global, Synergise Regional and Act Local www.apaints.com 25