Demand helping paint industry surging

 Indian Paint & Coating Association (IPCA) is an amalgam of paint, ink and powder coating manufacturers, raw material manufacturers and traders, machinery manufacturers and allied industries. The association represents about 1,000 members of both the organised and unorganised sector in the paint and coating industry. In an exclusive interview with ACE Update, Sanjeev Gupta talks about the future of paints and coating industry and how IPCA is playing its role to promote the industry.
Is the paints and coatings market growing, stagnant or in the declining phase?In spite of the slowdown in the economy, we can say that the paint industry is definitely growing. In context of small- and medium-scale segments, we can say that they are not growing as the scale of demand is growing because the main segments of the market has been captured by larger units owing to their policies regarding pricing and other factors. So the paint industry is definitely growing because the demand is growing. There is more demand in the economy in terms of industrial production and domestic consumption, but the medium- and small-scale units have to devise strategies to beat slowdown and increase their market share.
What are the key growing segments in this industry, and where does the architectural products segment stand?The key growing segments are both industrial and domestic. And the architectural products segment is directly related to the real estate as well as the growth in the manufacturing industry. Because these two sectors had slowed down considerably over a period of time, that segment isn’t growing fast but has got a lot of potential and scope. We believe that with the growth of manufacturing sector and the demand in housing and real estate, the architectural products segment is bound to go up.
What are the key drivers and restraints prevailing currently? How will they dictate industry structure in coming years?The key driver for any industry is obviously demand, and the demand comes when the whole economy is in a growing stage. Though India is a developing country, because of the policy paralysis of the past 10-12 years, it has not been growing at the pace that it should have grown. That, coupled with the tremendous amount of corruption and scams, has definitely derailed our economy. Those are the kind of restraints that we are talking about and the fact that the tax structure and the policies of the government is not industry friendly. If some key initiatives are taken in terms of tax reforms, labour reforms and general the impediments towards the growth of industry or the clearances removed, we definitely believe that the way forward is growth only.
In order to strengthen the paint and coating industry, what kind of policy reform do you expect from the new government?The current government is working actively to bring the GST — a new form of indirect taxation which promises to revolutionise the whole tax structure of the country. India can become one market; presently it is very fragmented. Different states have different rate of taxes for different products. There are lot of barriers when you send one material form one state to another. There is a lot of red tape involved. When GST comes it will be one tax for the whole country which would be administered by the central and state governments together, and the rates of taxation would also be similar everywhere. It would be a big push for the industry.

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