July-Sept. should be good: Nippon Paint India executive
The decorative division of Nippon Paint India is looking forward to the festive season for business to return to pre-COVID-19 levels, saysthe division’s president Mahesh Anand in a telephonic interview. Excerpts:
How did you tackle the lockdown situation?
On March 24, 2020 when the complete lockdown was announced, at that point, nobody was prepared for anything, but somehow, over the next two months, people had realised that this is going to be the way of life.
Paint companies started introducing products such as sanitisers. We also launched sanitisers, masks and gloves.
We educated the painters and supported 3,500 painters through digital mode, paid for their daily needs, supplied groceries and extended some COVID insurance for about 3,000 of them. Simultaneously, we also educated dealers.
Therefore, in the first wave, if you see in March, 10 days sales were not there and in April, there was a complete washout.
In May, there was a recovery of about 30% and from June onwards, it started increasing by 60% to 70%. Overall, 2020 was actually a flat year for the paint industry.
Did sales rise during the festive season?
The normal festive season sales from October to December, especially in the North and the West, was very good. But sales was affected during January to March 2021 due to the second wave. The southern States were the first to get affected. Even though it was not a complete lockdown, business was disrupted from the last week of April. May 2021 was again a disruption with only about 30% of sales.
From June, we are looking at a slight recovery.
I wouldn’t say that the situation is back to normal but it’s about 80% back to normal as far as industry is concerned.
During the first wave, manufacturing was stopped for almost 30 days. Industries were asked to close down.
But during the second wave, they allowed continuous manufacturing [industries] with 30% occupancy.
That helped us to continue our factory [operations] without any lockdown and the supply chain didn’t get disrupted.
Dealer shops were closed during the second wave.
We are looking at a good July-to-September period and then, as usual, we are expecting the festive season to come back like the last time and we should be back to pre-COVID-19 levels by October to December.
When compared with industry standards, are you above the curve?
Yeah, when compared with industry standards, we are above the curve.
It’s a challenging task, still we are above the curve. About 70% of Nippon Paint’s sales comes from the southern States. During both the waves, southern States were the worst affected. However, since our focus and resources are more deployed, we are able to float above the curve in the South also.
What is the current production capacity?
We have three plants altogether: one each for decorative, industrial and automotive refinish. The decorative plant at Sriperumbudur is operating at 50% efficiency.
Any capex plans?
When we open a new dealership, we invest in some automation in the plant. Besides, we gift each dealer a Point of Sales tinting machine. My plant is currently semi-automated. We will be investing in silos. Silos is one of the automations, which we will be doing and that is a major investment. Another one is an effluent treatment plant that we need to invest in. When production capacity rises, it will automatically lead to an increase in effluent [discharge]. These are the investments we will be doing in the next few years.
What is your company’s current market share?
We have a sizeable market share in Tamil Nadu. Now, we will be better in South than West and the North.
How many products do you have?
Coming to our products- in interiors we have eight products and eight in exterior. We are getting into non-paint products like water proofing, construction chemicals, adhesives and fillers. Other players are already into it. Nippon is getting into this business as part of its global strategy.
About four years back you introduced KIDZ brand of paints. How is the brand doing now? how is it going?
It is doing excellent, especially in Tamil Nadu, because we are doing a lot of below- the-line marketing campaigns for that. There are front kiosks in certain stores explaining to buyers the use of the product and it has been doing very well. During the pandemic in 2020, we launched economy and mid-economy products — Breeze Star and Atom Fibra — which are doing very well now. It’s been close to 10 months since we launched them and they haveit has been doing very well.
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