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Japanese paint manufacturer, Nippon Paints is focusing on the automotive refinishing segment after other categories were affected by the general slowdown in consumption. The company is setting up a new plant in Bawal, India to produce automotive refinishing paints.
According to Ramakanth Akula, President, Decorative, Nippon Paints India, the decorative paint segment, which was growing by 20% between 2001 and 2011, slowed to 12% last year and is expected to further dip to 8-9% this year. "The general slowdown has affected paints also as people cut their spending on non-essential categories,” he said. In the industrial segment, the dip in auto sales has slowed down the consumption of automotive coatings by original equipment manufacturers.
On the other hand, the automotive refinishing paints segment has been rather resilient. The Rs1200 crore market is still growing by 20%. "The repair works of automobiles is not something that can be postponed due to economic worries,” he said. ExxonMobil, PPG and DuPont are some of the leading brands in the auto refinishing space.
Nippon entered the segment last year and posted sales revenue of Rs40 crore. The company wants to double the sales this year. "We target 15% market share in the segment in five years,” he said.
In order to augment the sales, it is setting up a factory at Bawal in Haryana. The unit has a capacity to produce 4000kl/yr of paint initially and it can be scaled up over a few years, said Akula. Nippon has been earlier importing 60% of its auto refinish paints and getting 40% produced domestically by contract manufacturers.