Birla Opus, the latest entrant in the Rs 70,000-crore domestic decorative paints market, has increased its distribution within six months of launch, covering over 300 towns with a population in excess of 100,000, industry sources have told FE.
The company, which began operations in the north in markets such as Punjab, Haryana, Rajasthan and Delhi, is now present in Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh and Telangana. They have expanded to these states using a combination of trade expos, offering free paint tinting machines/ dispensers to dealers and pricing its products 15-20% lower than market leader Asian Paints, the sources said.
The company’s plan is to rake in Rs 10,000 crore in revenue and turn profitable within three years of launch. Asian Paints, which has a share of over 50% in the domestic decorative paints market, closed FY24 with consolidated net sales of Rs 35,382 crore and net profit of Rs 5,460 crore, a growth of 3% and 33% each over the previous year.
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The step-up in distribution by Birla Opus has been timed with an increase in manufacturing. Three new plants — one each at Chamarajanagar in Karnataka, Mahad in Maharashtra, and Kharagpur in West Bengal — are expected to begin operations by the second, third and fourth quarters of FY25, Rakshit Hargave, CEO, Birla Opus, Aditya Birla Group, said, when contacted.
“Our plan is to open franchisees in 300 towns and expand our presence in 6,000 towns by the end of the year (FY25),” he said. The company’s new advertising campaign, ‘Make Life Beautiful’, that began in June has received a “positive response” from consumers and the trade fraternity, according to Hargave.
Birla Opus began operations in February, with three plants at Panipat in Haryana, Ludhiana in Punjab and Cheyyar in Tamil Nadu. The total investment going into these plants is Rs 10,000 crore, the company had indicated.
In the last one year, players such as JK Cement, Astral Pipes, online B2B platform Infra.Market and Pidilite Industries have forayed into the domestic paints market to capitalise on the growth momentum in the sector. JSW Group, which forayed into paints in 2019, has touched a revenue of Rs 2,000 crore in FY24 and turned profitable, according to industry executives.
“There is a huge infrastructure, housing and home improvement push happening in the country,” says Deven Choksey, managing director of Mumbai-based brokerage KR Choksey Holdings. “Most of the new entrants operate in the building materials space. Paints is an adjacency that allows them to drive synergies and leverage a common distribution network.”
In February, Aditya Birla Group had said its paints foray was a natural extension of its white cement business. The paints venture would enable it to produce emulsions for water-based paints and resins for solvent-based paints in-house.
From: financialexpress
Financial News
