Paints major Kansai Nerolac said that demand for decorative paints has been fast recovering in rural India and with the upcoming festive season, the company can recover much of the sales lost due to the lockdown and get close to last year’s volume.
However, urban demand is yet to recover from the impact of the coronavirus pandemic, the company’s managing director HM Bharuka told ET. There was also a shortage of painters in urban areas due to the reverse migration of workers after movement restrictions were put in place in March.
The demand for industrial paints, in which the company is the market leader, will take longer to recover, Bharuka said. Demand for paint from automotive companies, which account for a large share of industrial paints, has been slow due to low auto sales. The demand for vehicles is expected to increase sharply ahead of the festive season and that will also help boost sales for Kansai Nerolac, he said.
Going ahead, the 100-year-old company is betting big on adjacent sectors like adhesives, waterproofing, and powder coating. The company wants between 3-5% market share in these sectors in the next three years and wants them to become significant revenue contributors in the future.
However, the paint maker will not diversify in other non-core areas unlike some of its competitors. For example, Asian Paints, the country’s largest decorative paint maker, has diversified into modular kitchen designing and making hand sanitisers.
“The company has been successful for a hundred years, so we must be doing something right,” Bharuka said. “If you diversify into new areas, you lose focus on non-core areas. We want to focus on our strengths.”
News Source: Economic Times