In the annual VSKD Nadar Memorial Workshop organised in Chennai under the auspices of the Indian Paint Association, chairman DG Rajan (southern region) said that the small industries would have to address foreseeable problems and opportunities if they wished to live long in the next millennium.

``Even though the paint industry was having a growth rate of 10 per cent, this did not seem to rub off into southern India,'' he said. While differential sales taxes in the southern states prove a hindrance to growth in some states, small companies would have to look at becoming contract manufacturers for larger players or enter into strategic alliances with technology savvy companies in order tosurvive, he said.

However Subramanian felt that small companies in the decorative segment had a strong brand presence in regional markets with the advantages of lowered overheads and better prices.``It would be impossible for any MNC or large company to weed them out,'' he said.

According to statistics, SSIs contributed to 44 per cent of the paint industry turnover, the remaining coming from national level players. With the small- scale having good presence in primers, distempers, exterior paints, thinners, all perceived as growth areas, they had a good future, according to Subramanian.

The rural markets offered very high opportunities with 83 per cent of the population having access to only 20 per cent sales. The manufacturer who cashed in the rural markets big or small would have the competitive advantage according to him. The future growth areas would be in distempers, emulsions, wood finishes and economy enamels. The distemper market for 2002-2003 is estimated to grow to 108,000 tonnes (currently75,000 tonnes), emulsions to 35,000 kl (currently 13,000 kl).

While quality enamels will witness a growth of 8 to 9 per cent, economy brands will witness higher growth. Industrial paints will have even better growth, 12 to 13 per cent in volume and 15 to 16 per cent in value, Subramanian said.