Small Paint Cans

The paint industry has been non-union trouble maintaining a firm footing in the market, given the fierce competition that exists due to the presence of large players. For more than a year, the smaller players in this sector have sought to answer all the technological improvements needed and storage requirements. In addition, the current recession has put further strain on these players.

In 2008, the rising price of crude oil, mineral turpentine oil (MTO) and other petroleum-based solvents has led to nearly 2,000 units closing. Rising input costs, it was difficult for those responsible for painting small to maintain their production. Thus, a number of these players has registered a negative growth considerably in the last fiscal year.

Paint small units affected by the sustained drop in demand

Last year, the sector to fight the spiraling rise in prices of raw materials. However, today the sector is experiencing weaker demand due to economic recession.

"The lull in activity in sectors like real estate and construction, the main consumer markets, has adversely affected units of paint on a small scale. Reducing demand is indisputable that these units to reduce their production. This resulted in the use of lower capacity, "said D Sivaram, President of the Indian Association of small paintings (ISSPA).

The steady decline in demand has forced many small units of paint to reduce their capacity by 20% to 25% in recent months. Overwhelmed by the low capacity utilization, profit margins of most units of paint have fallen significantly in the recent past.

Increasing barriers

In addition to the contraction of current demand, the paint industry is also rapidly losing little competitive advantage in the market.

"With prices of raw materials and packaging and transportation costs skyrocketing since last year, the paint companies were finding it increasingly difficult to price their products competitively in the market. The price difference present between the paintings brand produced by major players and finished products of small enterprises has reduced to a meager 10% -15%. Therefore, most buyers opt for paints brand, "said Gupta P, owner a paint company in Hyderabad, Sri Stocky coating.

In addition to falling demand, the lack of tax incentives and subsidies has also affected units paint small. paint manufacturers have also been small losers of major players in terms of financial capacity, distribution network, product range and access to improved technologies.

Despite growing concerns, ISSPA provides that the unorganized sector of the oil painting is on the current crisis and the testimony of a steady recovery in the second half of the year.

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