Aditya Birla Group launched its new paint brand, Birla Opus, in 2023. They aim to be a major player in the Indian paints sector, which is expected to reach ₹1 lakh crore in the next five years. It has committed a total capital expenditure of ₹10,000 crore towards its Birla Opus paints business.
Grasim Industries FY24Q4 Paints: Capex spent for Q4FY24 ₹1,067 Cr., total capex since inception at ₹7,063 Cr. (~70% of planned capital outlay)
Birla Opus Paints business of Grasim has started production with its 3 plants, which are Ludhiana (Punjab), Cheyyar(Tamil Nadu) and Panipat (Haryana). Currently, the 3 factories under trial cumulatively have about 630 million liters of capacity.
Three additional plants are scheduled to be commissioned in Chamarajanagar (Karnataka), Mahad (Maharashtra), and Kharagpur (West Bengal) in phases throughout FY25. The capacity of the 6 manufacturing locations is about 1,332 million liters.
Distribution: The company has launched in the south and north, focusing on entering pan India cities with 1 lakh population. The company has already started Advertisement in south India, Chennai, Bangalore, Tamil Nadu, Karnataka.
Indigo FY22Q2 - paint company sell directly to the retailer with no kind of wholesaler in between to build a network of 20,000 to 30,000 dealers takes often lot of time because more than half of these dealers are in very small towns and rural areas. So, it is not easy to do it overnight to extend your reach to let us say 7,000 small towns in India.
Indigo FY22Q2 - it has taken 21 years for us to reach a dealer network of about 14,000 or 15,000 and to reach 6,500 of tinting machines.
The company has set up enough capacity to serve the pan-India market. Currently, it is aggressive in driving its distribution, building its brand, and acquiring dealers.
FY25 Target
Set up 150 operating depots
Get 50,000 dealers onboarded with 90% of them having tinting machines.
Indigo FY22Q2 - biggest problem is on tinting machines. We have a problem of space that the dealer counter. All dealer counters are reasonably saturated with more than two tinting machines in most cases, and they do not have the space to install a new tinting machine.
Birla Opus tinting machines (40% smaller in size vs currently prevailing machines) will be provided for free and digitally linked to the control hub.
Birla Opus will also offer financing options to dealers via Aditya Birla Capital.
Berger Paints FY24Q4 - If you're giving free machines to people, they will keep their free machine. How does it matter to them? So it depends on where you are placing most of our bigger dealers or meaningful dealers. just getting a machine in means nothing. So you will have to ensure that the sales happen.
Disrupt:
The company market share hypothesis is firstly based on excellent product quality, excellent market working with influencers which are contractors which is a very attractive program for them, excellent distribution buildup, being able to supply and we are building up our range
It is committed to redefining the paradigm for institutional contractors and painters, who are this industry’s backbone. It has enrolled.
300k+ painters and contractors before the launch.
It will launch a painter partnership program ‘Udaan’ to showcase work and attract new business and a loyalty program with instant redemption. It will also offer unmatched rewards for all products.
Delight: Several initiatives are planned to delight the customer
Grasim Industries FY24Q4: There is a certain benefit that the dealers get in terms of price. Then there is a certain benefit which the contractor community gets in terms of the rewards. And then we have this offer for the end consumer which gives them 10% free volume on emergent purchases
GRASIM will be opening Birla Opus paint studios in 11 major cities and Birla Opus paint galleries across 300 towns.
Its track-and-trace system (QR-based) will enable end-to-end box traceability from production to application.
an additional one-year warranty will be offered on most water-based products and a first-time product warranty on enamels and wood-based products.
value offer: An extra 10% quantity will be offered on most water-based paint products during the promotion period.
The company launched a painting service offering under the name “PaintCraft” across eight major Indian cities. It has launched an Italian wood finishes range. “Allwood” and field validation is in progress.
Asian paint FY24Q4 We have had so many competitors who have come, who have priced themselves 10%, 15%, 20% lower. But I think the customer is very clear when they are buying into a brand
Conclusion
Birla Opus leveraging their experience in other industries and the Aditya Birla Group's strong distribution network to help them achieve this goal. They have shown large capital as commitment and audacious targets to see as real competitors in the market.
Mold-Tek Packaging FY24Q4 - May, we are almost about 200, 250 tons of sale we could achieve with them. So, if the same trend goes or improves, we may be able to reach 3,000 to 4,000 tons of sales to Aditya Birla Group in the current financial year
Birla Opus plans to become a profitable No. 2 player in the paint sector within the next few years. There is very minimum that we can talk about its strategy other than bold confidence of execution which other players have not done to date.
Indigo FY22Q2 - you cannot expect any company no matter how strong it is to do it overnight and that is because of certain entry barriers which can only surmounted with time. Money power can accelerate it marginally, but not in a very significant way.
Companies in the market have built over the years with deep product expertization and brand loyalty over the years. They enjoy the scale and a well-run system that understands the market very well.
Indigo FY22Q2 - four large established players in the market who had existed on for more than 75 years have spent so much in building their brands over the last 50 years, 60 years that even if you were to outspend them for one or two years, I do not think you will reach that same level of brand equity.
Kansai Nerolac Paints FY24Q4 As more dealers come in there could be undercutting price as dealers level.
The market is already fortifying its sales machine by running record-level discounts, elevating marketing spending, and sales team to push sales. With this, I don’t see Birla Opus having an easy market. Till now it was planned but now they are in the market let number talk.
I will watch Birla Pivot (B2B E-commerce Platform focused on building materials) which company has very high aspirations of achieving $1 billion in revenue in the next 3 years. If this also gets executed and supports paint, it will be interesting to watch.
I will keep a watch to understand more
How are the numbers for Birla Opus.
Any strategic shift or aggression from the market leaders to protect market share.