The rising raw material cost is still the biggest challenge: Ashok Gupta

In an exclusive conversation with Ashok Gupta, Vice Chairman, Shalimar Paints Limited sheds light on the growth strategy of the company.
“The rising raw material cost is still the biggest challenge”: Ashok Gupta

Being a leading manufacturer of home decorative paints, what is your assessment about market? Kindly state few numbers to quantify the same.

Paint industry inIndia is largely dominated by organized players accounting for 65% of the market while the unorganized players accounting for the rest 35%. With the increase of per capita paint consumption,Indian paint market is expected to reach Rs 709 bn by 2019-20. The industry is divided into two categories- decorative and industrial. Demand of Decorative Paints that hold 75% of the market is significant during the festive season that arises from household painting and other display purposes.

Kindly shed light on your current distribution in the online as well as offline space. Do you also sell by your exclusive retail outlets (or experience zone)or plan to? Going forward, what are the plans to scale up the distribution?

Shalimar has a pan-India sales and distribution network. With 32 sales depots and 3 Regional Distribution centersthe company services more than 5300+ dealersacross the country. The online presence is not lined up at the moment and we are not even planning it in near future. We have a strong presence in both industrial and decorative paints businesses. Further, we are planning to increase our distributors in the near future.

 What are the biggest operational challenges as far as decorative paint industry is concerned?

The external factors have affected the decorative paint industry in the recent past. Though the decision of the GST Council to cut down the tax rates has boosted the demand, the rising raw material cost is still the biggest challenge.As oil prices have witnessed a sharp rise in the past one year, inflationary cost pressures will continue to weigh on margins.

What are the latest consumption trends in this segment?

With an increasing disposable income, the percentage of middle class is expected to expand to 69 percent by 2020.Along with this, the popularity of quality paints and increasing income in tier-1 and tier-2 cities is adding in the growth of the premium market of decorative paint industry.

Who do you see as your biggest competition in this space?

The competition does not lie just within the paint industry. Any brand, be it into decoration or furniture, in which a consumer is ready to spend money to decorate his home is our competitor.

Kindly shed light on your manufacturing facility?

Shalimar Paints currently has two operational units- Chennai (Tamil Nadu) that was set up to serve the south market in 2017 and Sikandarabad (Uttar Pradesh) set up in 2002 with the total capacity of 33,000 KL per annum. Recently we have laid the foundation of Nashik unit, the factory partially gutted in 2016. It is expected to have an annual capacity of 25,000 kilolitres and will be operational by April-May 2019. Howrah unit’s operations remains suspended after fire broke out in 2014. The company will resume the work post clearance from the West Bengal government.

At last, kindly highlight your growth plans?

With core competence of the brand that highlights the legacy, performance and quality of the paints, we are trying to build our brand strong in both decorative and industrial paints with major focus on decorative paints. We are putting our efforts in strong dealer relationships and building a strong and wide distribution channels to reach masses.

 

Ashok Gupta
 
 
 
 
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