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Welcome

FAM 05

Goodlass Nerolac Paints Ltd


Analyst Meet
3rd May 2005

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Company Snapshot
Head Office

Lower Parel, Mumbai

Founded in

1920

No. of Branches

66

Manufacturing
Locations

Lote, Chennai, Ahm., Jainpur, &


Bawal (Commissioned on 18/3)

Customer Base

Over 11500

Employees

1959 (Including Group Cos.)

FY 05 Group
Revenue

1163 Cr
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Group Companies
Goodlass Nerolac Paints
Ltd. Mumbai

Industrial, Automotive &


Architectural Coatings

Nipa Chemicals Ltd.


Chennai

Pre-Treatment Chemicals

Chemguard Coatings Ltd.


Chennai

High Performance Coatings

Polycoat Powders Ltd.


Mumbai

Powder Coatings

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Presentation Sequence

Performance
Financials
Road Ahead

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Performance

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Paint Industry

Growth expected to be 14% with


Industry size of Rs7750Cr.
Organized sector doing better with 15%
growth and market size of Rs5400Cr.
Architectural business benefited by high
growth in housing sector
Industrial business riding high on
growth in Automobile business
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Revenue Growth-GNP
1200
1000
800

1069
925
684

708

2000-01

2001-02

791

600
400
200
0
2002-03

2003-04

2004-05

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Industrial Business Initiatives

Acrylic CED lines


Export of Acrylic CED
New Business
Value Engineering
Color Centre
Marketing Cell
Focus on Job Coating Business for PC
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Decorative Business Initiatives

Project Disha- Strategy building exercise

Focus on Key Segments

Brand building

House Hold
Auto Refinishes
Wood Finishes
Large Commercial

New Advertising films

Consumer scheme-HDD
Contractors CRM program
Making channel responsive
Profitable Mix/ New products

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Manufacturing Excellence

Started in August 2003 at Lote & extended to Jainpur &


Chennai in 2004 to set in process of continual
improvement in:

Using Tools like Six Sigma & TPM

Manufacturing standards
Employee involvement
Skill sets of employees
Resulting into reduction in Factory level losses

6000 New ideas implemented


OEE (Overall Equipment Efficiency) introduced to
measure asset utilization led to:

Reduction in breakdowns by 25%


Improvement in OEE by 33%
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Manufacturing Capacity
Location
STATE

Lote
MAH

Products

Decorative
Industrial

Annual
Capacity

31000
MT

Certification

QS- 9000
ISO- 14000
OHSAS18001

Total Installed Capacity

Jainpur
UP

Vatva
GUJ

Chennai
TN

Bawal
HARY

Industrial

Decorative
Industrial

Industrial
PC, PTC

61000
MT

9000
MT

17000
MT

20400
MT

QS- 9000
ISO- 14000
OHSAS18001

QS9000

ISO9002

Decorative
Industrial

138400 MT

Capacity utilization 03-04

65%

Capacity utilization 05-06

56%( 65% without Bawal)


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Awards & Recognitions


Award

Location

Area

Greentech Foundation Award- Gold/ Silver

Jainpur/ Lote

Safety

NITIE Lakshay 2004- Bronze

Supply Chain

SCM

DSIR National Award

R&D

ACED

Best Vendor Awards from:


Gabriel, MUL, HMSI, Eicher Motors

Industrial
Marketing

Consumables

Toyota Motors

Nipa Chemicals/
GNP

Quality & Cost

Association of Business Communicators of India


(ABCI)

Web Site &


Environment
Report

Certificate of Merit/
Commendation

Desh Bandh Paper (Maya Ram Surjan Trust)

Best Visual Impact

Goody Vision
Internal Magazine

Indias Best Managed CompanyBusiness Today/ A.T. Kearney

Corporate

Best Managed
Company
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Financials

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Highlights

Turnover of over Rs1069Cr., up by 16%


PBT at Rs. 137Cr., up by 55%
Net Profit at Rs. 92Cr, through improved
performance in all businesses (59%)
EBIDT of 14.9%, up by 42%
EPS high at Rs36.05, up by 59% (Effective
increase after Bonus)
Market Cap of Rs.1350, almost doubled
Dividend rate 115%
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Market Cap
1350

1400
1200
1000
800

678

600
400
200
0

138

'00-01

184

'01-02

237

'02-03

(Fig. In Rs. Crores)

'03-04

'04-05

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Demonstrated Impressive Position


(Creating Value for Stakeholders)
Customers

Technologically superior coatings


Service
Value Engineering

Employees

Individual Development- DC/ Trg.


Creating a positive climate

Shareholders

Following standards of CG
Consistent returns

Society

CSR activities in select areas


CSR & Environment Reports

Suppliers

Joint development/ Research


Reliability Program

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Road Ahead

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Road Ahead

En cash on housing growth


Retain leadership in Industrial & PC
Enhance Brand visibility

Reach to Media
Reach to Analysts
Reach to customers

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Growth Drivers

New Products in Architectural coatings


Wood finishes business
Alternate channel for rural marketing
Brand building
Influencers management & Demand generation activities
Increase Service Efforts in Industrial business
Technology leadership
Ride on ancillary export business
New lines
Powder coating business in white goods industry
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Concerns

Volatile Growth pattern of Automobile


business
Rising pressures on pricing from Industrial
customers
Rising Raw Material prices
Inflation affecting interest rates

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Outlook

Industry growth of 10-11%


Inflationary trends in raw material
prices (R/M)

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Decorative Paints
Walls
Interior
Exterior

Woods

Industrial Paints
Automotive Coatings
General Industrial
Coatings
High Performance
Coatings
Powder Coating

Metals
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Nerolac Paints comes to your doorstep


through Nerolac Home Stylers. With
Nerolac Home Stylers you can rest
assured that the painting of your home
will be a hassle free experience.
Nerolac Home Stylers provides
professional help in providing product
consultancy and color consultancy. It
delivers a high quality job through its
trained and experienced painters under
the supervision of Nerolac supervisors.
Also Home Stylers gives a 1 year
warranty on the job executed by us.

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How Does it Work:

Contact Nerolac Home Stylers by


calling at toll free number

He will guide you on the available product range and also suggest a product suiting
your requirements.
He will be equipped with professional color tool that will help you make a correct
color choice.
He will suggest the correct painting system to ensure durability of paint.
He will give you an estimate for the entire painting job and also indicate the
timelines for completing the job.
He will get the trained and experienced painters to execute the job.
He will supervise the job from time to time to ensure quality service.
On completion of the job he will hand over the warranty certificate to you
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Future Prospects.

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Case Facts :

The Indian Paints industry Rs. 6600


crores.
Asian Paints Market Leader( 44%
Share)
Wood Finishes market Rs. 300 crores
1. Solvent-based and Water-based
2. Matt and Gloss
3. Spray-on and Brushable

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Types of Wood Finishes and


their Market Share in India
Wood Finish Market in India
PU
10%
Melamine

48%

30%

12%

Alkyd

Lacquers &
Speciality
Products

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Water Based PU Wood


Finishes
Advantages :
Environmentally safe
Brushable
Extra training not
essential
No odour (associated
with Solvent )
Not hazardous to health
Does not yellow over
time

Disadvantages :
Not as durable as
Solvent
More Expensive
Less protection from
moisture

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Current and Potential


Competition

Current Competition:
Sheenlac ,Pidilite , Sirca , Linea
Coats, ICA, MRF Tyres

Potential Competition:
Goodlass Nerolac, ICI Paints, Berger
Paints

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Pricing:
Type of Wood Finish

1) French polish

Cost to the customer


(Labour+Material)
Rs. 10 per square feet

2) Alkyd

Rs. 15 per square feet

3) Melamine

Rs. 30-40 per square feet

4) PU (solvent based)

Rs. 80-120 per square feet

5) PU (water based)

Rs. 120-150 per square


feet
Rs. 200 per square feet

6) Polyester

FAM 05

Thank You

FAM 05

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