Aiming for the number one spot in the paint industry within the next three years, according to JSW Paints Managing Director Parth Jindal.
JSW Paints, a leading Indian paints company, has announced ambitious plans to become the third-largest paint manufacturer in India following its acquisition of AkzoNobel India's decorative paints business.
The combined retailer base of JSW and AkzoNobel is estimated to be about 26,000 to 27,000 retailers, with an overlap of approximately 10%. This expansive network will be leveraged to grow JSW Paints' business, particularly in the premium and urban segments, where it previously struggled to gain a foothold.
One of the key strategies for JSW Paints is the leveraging of the iconic Dulux brand, which commands a strong 20% share in the premium decorative paint segment. Dulux's established presence in metros and Tier I and II cities will help JSW penetrate this market.
In addition, JSW Paints plans to operate through two complementary brands. Dulux will target the premium and urban segments, while JSW Paints’ own brand will focus on the mass market and value segments where it already has a strong foothold. This "hybrid growth engine" approach allows targeting of a full spectrum of customers across rural and urban India.
The combined capacity of five AkzoNobel India plants, plus JSW Paints’ existing two (soon three) manufacturing facilities, is sufficient to support substantial growth without the need for new plants. Minor upgrades and backward integration in resin production will optimize costs and improve margins.
JSW Paints also intends to significantly increase advertising and marketing investments for both Dulux and its own brand to build strong brand equity and drive faster growth in the decorative segment.
The near ₹13,000 crore acquisition deal is funded through a mix of internal funds, financial institutions, and private equity. This robust financial base supports JSW's aggressive growth and market share expansion plans.
JSW Paints sees potential future consolidation in the paint sector and aims to leverage strategic partnerships such as AkzoNobel’s ongoing role as a technology provider in industrial paints. This partnership and market maneuvering are expected to help JSW accelerate its rise to the top three.
The company aims to double its revenue from ₹6,000 crore to ₹12,000 crore and move quickly from being the fourth-largest to the third-largest player in India’s highly competitive paint market.
AkzoNobel will remain the technology partner to JSW across all its coating segments, for which JSW will pay a royalty fee of 4.5% of sales. AkzoNobel will retain the powder coatings business in India and its international R&D center after exiting the decorative paints business.
JSW Paints may continue with the current management of AkzoNobel India, subject to necessary approvals and completion of the transaction. For the remaining 30% of the funds, JSW Paints is looking to partner with private equity firms.
JSW Paints intends to keep Akzo Nobel India as a listed entity and not increase the stake beyond 75%. The company hopes to complete the transaction, including the open offer, by the end of the current calendar year.
In the industrial paints segment, JSW Paints plans to become the leading player by leveraging its collaboration with AkzoNobel as a technology partner and the strengths of both brands, Dulux and JSW. The combined entity of JSW-AkzoNobel is expected to have a top line of approximately Rs 6,000 crore by FY25.
In summary, JSW Paints’ strategy combines acquiring a strong premium brand, dual-brand market segmentation, efficient capacity utilization, enhanced marketing, solid financial backing, and leveraging partnerships to rapidly climb the ranks in India's paint industry within three years.
- The acquisition of AkzoNobel India's decorative paints business by JSW Paints is estimated to significantly expand their retailer base, giving them a stronger presence in the premium and urban segments.
- JSW Paints plans to operate through two complementary brands, with Dulux targeting the premium and urban segments, and their own brand focusing on the mass market and value segments.
- The robust financial base supporting JSW's growth plans is a mix of internal funds, financial institutions, and private equity, allowing them to invest heavily in advertising and marketing for both Dulux and their own brand.
- In the industrial paints segment, JSW Paints aims to become the leading player by leveraging their collaboration with AkzoNobel as a technology partner and the strengths of both brands, Dulux and JSW, and expects the combined entity to have a top line of approximately Rs 6,000 crore by FY25.
