million, registering a growth of 18.7 per cent over its FY05 revenue of US$ 438 million.
The consolidated revenue for the group increased from US$ 577 million in FY05 to US$ 677 million in FY06, with international operations accounting for 18.2 per cent of its total revenues.
Asian Paints in the Arab World
Asian Paints marks its presence in the Arab World through its subsidiaries in Oman, Bahrain, Dubai (UAE) and Egypt. In the Middle East region, its revenues from paint sales increased in FY06 by 24 per cent to US$ 45 million, thereby accounting for 37 per cent of its revenues generated from international operations.
The following pie-chart depicts the break-up of the group's international business sales:
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Company Background
Asian Paints, headquartered in Mumbai in India, is the largest paint company in India and the third largest in Asia. It manufactures industrial and decorative paints and coatings. Its product portfolio includes interior wall paints, exterior wall paints, door and window paints, furniture paints, metal paints, and ancillaries.The company has also
diversified into products, such as Phthalic Anhydride and Pentaerythritol, in order to achieve backward integration. In addition to its product portfolio, the company also extends value-added services, such as the painting services and helpline services, to its customers.
The Asian Paints Group, with its subsidiaries Asian Paints, Apco Coatings, Berger International, Taubmans and SCIB Paints, operates in
21 countries across Asia, the Middle East, Australia, the Caribbean, Europe and North America. It has 29 paint manufacturing facilities across 21 countries. It currently employs nearly 4700 personnel.
Asian Paints was ranked among the 200 Best Small Companies in the world for the years 2002 and 2003 by the Forbes global magazine, the only paint company in the world to have received this distinction. Forbes has also listed Asian Paints among the 'Top 200 Best under a Billion Firms' of Asia in 2005 and 2006.
In the financial year ending 31 March, 2006 (FY06), Asian Paints recorded total revenue of US$ 520
ASIAN PAINTS LIMITED
International Sales Break-up of Asian Paints: 2005-06
25%
17% 12%
9%
Source: Company Annual Report 2005-06
Caribbean Middle East South Pacific South East Asia South Asia
37%
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The Asian Paints Group is present in UAE through its subsidiary Berger Emirates Limited.
The company established its new factory in UAE in March 1996.The company has been leveraging this production facility to augment its market share in UAE and to increase its exports to Saudi Arabia, Oman, Qatar, Iran and East Africa.
Asian Paints in Egypt
Asian Paints forayed into the Egyptian market in August 2002 with the acquisition of SCIB Paints, one of the top-five paint companies based in Egypt.
It richly complemented the product portfolio of Asian Paints.
Asian Paints in Bahrain
Asian Paints operates in Bahrain through its subsidiary, Berger Bahrain W.L.L., which holds nearly 50 per cent of the market share in the country.The company has won several government contracts for supplying its products to schools, office buildings, and housing development and infrastructure projects.
Asian Paints in Oman
Asian Paints became the first Indian company to set up a manufacturing facility in Oman in March 2000. It operates in Oman through its Middle East subsidiary, Asian Paints (Middle East) LLC.The company serves the entire Gulf market through this subsidiary. Asian Paints (Middle East) LLC is a registered paint supplier to the Diwan of Oman’s Royal Court, the Ministry of Housing and Electricity and Water, the Ministry of Education, the Ministry of Defense and many other government organisations.
Factors for Success
Strategic Acquisitions
Asian Paints has extended its reach in the Arab world by acquiring Berger Paints and SCIB Paints.
The presence of Berger Paints subsidiaries in the UAE and Bahrain has enabled the company to cater not only to the UAE and Bahrain but also to neighbouring nations such as Saudi Arabia, Oman and Qatar.The company has also gained a strong foothold in Egypt with the acquisition of SCIB Paints, one of the leading paint companies in Egypt.
Research and Development
R&D activities have helped the company to develop new products and attain cost
competitiveness over its competitors. In addition, the company's continuous research programmes have reduced the cost of its products through value re-engineering of formulations.The company's R&D team provides technological support to its international operations, and develops products that meet consumer tastes in the diverse geographies of its operation.
In the recent years, the company has started focussing on developing new exterior finishes, economy emulsions and distempers.
Customer-Centric Approach
The retail strategies of Asian Paints revolves around a concept - ‘going where the customer is’.
In addition to its product portfolio, the company also provides value-added services to its
customers. A few years ago, it introduced Asian Paints Helpline, a toll-free service to assist its customers in their paint-related queries. It also launched a new service - Asian Paints Home Solutions - wherein it provides painting services to its customers.The company has forayed into Kids World, offering paint designs for kids' rooms and kids' corners.The company's growth has thus been innovation led, with a focus primarily towards its customers.
Future Plans
Streamlining its International Operations Asian Paints is planning to restructure its international operations with its focus primarily on the most profitable regions for the company.
The Middle East is the best performing region for the company. In FY06, it accounted for nearly 37 per cent of the total revenues generated by the company from its international operations, thus registering a growth of 30 per cent. Asian Paints expects the Middle East region to continue this growth, and therefore a major chunk of its infrastructure investment is likely to be attracted by this region.
Focus on Improved Communication Platform
Asian Paints is the only company in India to have Enterprise Resource Planning (ERP) solution from SAP, and an integrated Supply Chain Management (SCM) solution from i2 Technologies.The company now looks forward to integrating all the
components in its supply chain, such as suppliers and employees, to end customers. It is focussing on improving the internal communication by reinforcing its transaction systems and messaging platforms. It has already started the implementation of a portal platform for enhanced information dissemination across all the geographies in which it operates.
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