Berger Paints, the second largest decorative paint company in the country, may hike the price of its decorative paints once again in December. It may be recalled here that the company had hiked its prices in October by average 2.2%. The company is planning one more hike in the beginning of next month and it may not be more than 1.5%.
Ever increasing raw material prices have forced the paint makers to increase the price of their end products to pass on the inflationary effect to consumers. However, there is some good news for the paint industry as the crude oil price is coming down (it has gone below $60/barrel). Most of the raw materials required for the industry are derived from the crude oil. Also, rupee is appreciating vis-à-vis dollar which is again a good news for the industry. Also, industry experts expect softening titanium dioxide prices in the coming months due to planned capacity addition in China. Titanium dioxide is the main raw material of the paint industry.
According to some dealers, other paint manufacturers too may resort to price hike in the coming days, unless there is drastic fall in crude oil price and sharp appreciation in rupee value.
Despite the lull in the real estate market, Indian paint industry is showing decent growth in recent years. Currently, the size of Indian Paints industry is estimated to be around Rs 56,000 crore and is expected to touch 72,000 crores by 2020. Between, 2005-15, the industry saw a robust growth of 17% p.a. However, thereafter the growth has slowed down slightly due to slowdown in real estate sector. Despite that the industry has been able to maintain double digit growth between 2015-2017. Asian Paints, Berger Paints and Kansai Nerolac are the leading players in the industry.