The domestic paint industry is expected to touch Rs 50,000 crore mark in the next three years on the back of rising urbanisation and economic revival, according to the Indian Paint Association (IPA).
"Though the paint industry witnessed some slowdown in the last few years due to global economic uncertainties and growing urbanisation, we expect a good growth over the next three years. We estimate the industry to touch around Rs 49,545 crore by FY16," IPA President Ramakanth Akula told reporters here.
In FY12, the paint industry stood at Rs 26,040 crore, out of which the decorative segment contributed nearly 71 per cent at Rs 18,490 crore, while the remaining Rs 7,550 crore was contributed by the industrial segment.
In terms of volume, the industry stood at 3.11 million tonnes, of which decorative segment accounted for nearly 77 per cent share.
"We expect the 70:30 trend of decorative and industrial segments to continue even in future, mainly because of the growing urbanisation and increase in disposable income," he said.
The IPA President expects to see considerable growth in the real estate sector in the coming years, which will drive demand. "Also, we expect the economy to rebound. All this put together, we feel the decorative segment will continue to dominate," he said.
In the industrial segment, the auto sector will continue to push demand, Akula added.
When asked whether the input costs will continue to be a cause of concern for the industry, Asian Paints managing\ director KBS Anand said, "We do not expect the input prices to come down even though there are signs of crude oil prices stabilising. But the concerns over rupee depreciation and inflation will continue to keep the input costs high."
The industry is also expecting increase in paint prices in the coming years, he said.
"Over the last three years we witnessed almost 30 per cent increase in prices. If the current situation prevails for some more time, increasing prices is inevitable," Anand added.