MANAGERIAL ECONOMICS

…KYUNKI HAR GHAR KUCH KEHTA HAI…

asian paints

Asian Paints- A flashback.

Presentation Structure

Industry analysis Introduction to the company Company profile Competitors/International operations Growth cycle of the company Mergers & Acquisitions Marketing, sales & distribution Supply chain management Financial analysis Human resource management Corporate social responsibility Future of the company

Paint IndustryPaint industry estimated at Rs. 135bn.

Unorganized sector accounts to 35% of paint market.

Volume growth estimated at 15%.

India’s share in the world paint market is 0.6%.

Per capita consumption of paint in India is 1.2kg/annum.

Introduction to Asian Paints

Started in 1942 by four entrepreneurs: Champaklal choksey, Chimanlal choksey, Suryakant Dani and Arvind Vakil as “ASIAN OIL & PAINTS COMPANY.”

Within three years, their turnover reached 3.5 lacs.

In 1967, Asian paints became the 10th largest paint company in the world.

Vision

“Asian Paints aims to become one of the top 5 Decorative Coatings companies

worldwide by leveraging its expertise in the higher growth emerging markets.

Simultaneously, the company intends to build long term value in the Industrial

coatings business through alliances with established global partners.”

MISSION

TO BE THE LARGEST DECORATIVE PAINT

CO. WORLDWIDE AND TO BE THE 5TH

LARGEST PAINT MANUFACTURING CO.

WORLDWIDE.

Asian Paints- Today

Company Profile

Product Profile

•INTERIOR PAINTS.

•EXTERIOR PAINTS.

•WOOD FURNISHES.

•WOOD & METAL FURNISHES.

Competitors

Asian paints

37%

Good

lass

Nerolac 1

5.9

%

Shalimar

4%

Berge

r Pa

ints

13.8

%Market Share in India

International Operations

Caribbean Islands

Barbados, Jamaica,

Trinidad & Tobago.

South Pacific

Fiji, Tonga, Vanuatu,

Solomon & Samoa Islands.

South Asia

Bangladesh, Nepal & Sri

Lanka.

South East Asia

China, Malaysia, Singapore &

Thailand.

Middle East

Bahrain, Egypt,Oman &

United Arab Emirates.

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase

c)1982-1986 The years of Excellence

d)1987-1997 Moving Closer to the Consumer

e)1997-1999 Changing rules of the game

f)1999- The new Asian Paints

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase

c)1982-1986 The years of Excellence

d)1987-1997 Moving Closer to the Consumer

e)1997-1999 Changing rules of the game

f)1999- The new Asian Paints

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase

c)1982-1986 The years of Excellence

d)1987-1997 Moving Closer to the Consumer

e)1997-1999 Changing rules of the game

f)1999- The new Asian Paints

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase

c)1982-1986 The years of Excellence

d)1987-1997 Moving Closer to the Consumer

e)1997-1999 Changing rules of the game

f)1999- The new Asian Paints

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase

c)1982-1986 The years of Excellence

d)1987-1997 Moving Closer to the Consumer

e)1997-1999 Changing rules of the game

f)1999- The new Asian Paints

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase

c)1982-1986 The years of Excellence

d)1987-1997 Moving Closer to the Consumer

e)1997-1999 Changing rules of the game

f)1999- The new Asian Paints

Growth Cycle of the company

a)1942-1967 Evolution Phase

b)1967-1982 Extension and Consolidation Phase

c)1982-1986 The years of Excellence

d)1987-1997 Moving Closer to the Consumer

e)1997-1999 Changing rules of the game

f)1999- The new Asian Paints

Mergers & Acquisitions

Buys Taubmans Paints (Fiji) In September 2003.

Acquires ICI India’s Unit (February 2007).

Sells stake in Australian Unit (June 2007).

Marketing, Sales & Distribution

Rural Marketing Initiatives since 1960.

Distribution is one of the main strategy of Asian Paints.

Advertising & Promotional Expenditure started in 1980s.

Advertising Methods- Radio, TVCs, Print, Internet, OOH, POP, Retail Outlets, Seminars, Workshops.

Advertisements

•Promotional Expenditure grew from 15% in 2003 to 21% in 2008.

Supply Chain Management

i2 Supply Chain Management to meet changing demands.

ASHWIN DANI, VICE-CHAIRMAN AND MANAGING DIRECTOR, ASIAN PAINTS (INDIA) LTD, HAS BEEN PRESENTED WITH THE HIGHEST RECOGNITION IN SUPPLY CHAIN MANAGEMENT — THE CHEMINOR AWARD FOR 2002 — BY INDIAN INSTITUTE OF MATERIALS MANAGEMENT (IIMM).

Diagrammatic Representation of Supply Chain Management

Supply Chain Cycle

350 raw material &

intermediary good suppliers

2 chemical plants & 18 processing

centers

140 packaging & material vendors

6 Regional Distribution

Centers & depots

Majority of employees are hired from premium management institutes.

Recreational facilities are provided to the employees.

Human Resources

Human Resources

Human Resources

Performance Appraisal:360 Degree Appraisal.Development Centre.ECA(Essential Competency Acquisition)

Other Initiatives:Taking care of the Employees.Employee Portal- EGLOO

Financial Analysis

Net Sales

Profit after tax

Earnings Per Share

(In Rs.)

Return On Capital Employed

Market Capitalisation

Dividend Payout Ratio

Debt- Equity Ratio

CORPORATE SOCIAL RESPONSIBILITY

Water Conservation-Total Water

Management Center.

Age Care.

Education.

Other Initiatives.

Future of the Company

Asian Paints is planning to increase the capacity by setting up a plant at Rohtak, Haryana.

No other company is planning to increase its capacity in the near future, this will give Asian Paints a competitive advantage in terms of pricing.

GDP growth slowdown in the growth rate of two important activities i.e. repaint activity and construction activity will have direct impact on the volume of APL, thus effecting its profitability and margins.

Rural markets have considerable potential. Companies that can establish a dealer network in these markets are likely to get the edge in positing above par growth rates over the next few years.

As setting up distribution infrastructure is expensive, it would mean that the competition is limited to the top players.

Due to substantial hike in raw material prices, Asian Paints has raised the prices of solvent based paints, thus demand would be affected to some extent.

PAINTERS (alphabetically)

Ashish Kapoor (08016)Jeet Thakkar (08051)Jimish Dedhia (08052)Kamal Vora (08053)Kamlesh Dhakad (08054)Kapil Jagasia (08055)