In a media interaction, Berger Paints Managing Director & CEO Abhijit Roy said that, the industry of painting has introduced few targets which are, "highly improbable" by new entrants in the sector. He further mentioned that, in the industry like painting industry few careful and incremental steps need to be taken and also he highlighted that, growth will not come in the way, unless any of the competitors will do mistakes.
He said, "In my opinion, therefore, it will be a slow grinding process, it will not be as fast as possibly anticipated. It might be lesser than what the projections have been given. I don't think it is impossible to achieve those targets, but it is highly improbable that the targets will be hit."
Roy did not take any name of the competitors but recently, Aditya Birla Group has entered in this segment by launching "Birla Opus." It has set targets of Rs.10,000 crore revenue and achieving profitability in the next three years. Birla Opus is offering dealer discounts, along with its limited period promotional offer of a 10% volume discount across all water-based paint products.
Roy mentioned that, pricing does not necessarily impact consumer sentiment. He also added, "The problem is that the customers want the best quality product. They don't want a 5-10% price off in terms of pricing. They are interested in getting a good quality product, apply it properly and available at the right place." Roy also said that, the company will not participate in the game of price cuts. He said, "I don't see us reacting in that manner," and informed that, company will react when it will require.
Roy highlighted the example of four cities in Uttar Pradesh that are very close to each other - Ayodhya, Lucknow, Kanpur and Allahabad. Berger is the leader in two of these cities, while Asian Paints leads in the other two. In both cases, both Berger and industry leader Asian Paints have a 40% to 50% market share.
He further added, "Asian Paints do not lack product quality or advertisement muscle power or for that matter knowledge of the paint industry and have excellent quality people all around," said Roy and further added that changes in the paints industry are slow and incremental. "It is not like you bomb and you flatten the surface and then you become the leader suddenly. It is one-on-one fight at every place, which is time taking and that's why we are of course cautious, but we're not worried (about rising competition)."
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