Not perturbed by conglomerates entering paints business; not an easy sector to crack: Asian Paints CEO

Amit Syngle MD CEO Asian Paints at the Neo Bharat Latex Paint launch

New entrants in the paint sector are unlikely to replicate the extensive distribution network and market penetration achieved by Asian Paints over many years, the company's managing director and chief executive officer Amit Syngle told Moneycontrol in an exclusive interview. He underscored the company's confidence in maintaining its competitive edge, even in the face of the potential challenges posed by Grasim's entry into the paints business.

"We feel that even if newer players come in and ... look at opening a network..., there is no way they can match this kind of distribution progress in terms of what we have, and the kind of penetration we have across cities," Syngle said on the sidelines of the launch of Neo Bharat Latex Paint, its first product in a new category of paints.

The company's entry into the new category, which is touted to be an affordable alternative to distemper, aims to democratise the decorative paints sector. It comes more than a month after the Aditya Birla Group-owned Grasim's entry into the paints sector. Grasim's entry, with a Rs 10,000 crore investment, caused brokerages to issue a cautious outlook for Asian Paints amid concerns over increased competition. Grasim aims to achieve a Rs 10,000 crore gross revenue within three years of starting full-scale operations.

Asked about the new entrant, Syngle  said, "We believe that our strategies are very strong. There have always been new players in the market for the last two decades. There have been international players like Sherwin Williams,  which have kind of come into the market with huge investment muscle. So, we feel that it's not a market that is easy to crack, in terms of going forward."

The sector, which was initially dominated by a few key players, is now seeing more new entrants backed by conglomerates, reflecting the optimism in India's growth story.

Syngle added, "So we feel that the overall market is pretty big ... and it will continue to grow and give space to newer players."

So far,  the potential in the sector has prompted non-paint players such as Birla group's Grasim, JSW Group, JK Cement,  Pidilite, and  pipes and fittings manufacturer Astral to venture into the business.

Currently, Asian Paints leads the market with over 50 percent market share, followed by  Berger Paints with 18%, Kansai Nerolac Paints with 15%, and AkzoNobel (Dulux) with 7%.

Big bet on rural demand

Asian Paints announced its entry into a new category of paints, an alternative to distemper, on April 15, eyeing growth in the rural markets.

Distemper is a preferred option in rural households mainly due to affordability and the traditional preference over emulsion paints. With  the launch of Neo Bharat Latex Paint, Asian Paints is looking to democratise the decorative paints market with lucrative pricing.

"So, this price point is less than Rs 1,000 for a 20 kg pack....it therefore offers a very smart upgrade to the consumer and also a vast range of colors to freely choose from," Syngle  said.