1. International Scenario & Implications for the Indian Paint Industry Amit Jain, Akzo Nobel The Indian Paint Association, Jan 29 th 2011

3. Global Coatings Industry increasingly consolidated Top global coatings companies based on 2009 sales ($bn) Source : AkzoNobel Internal Estimate Top Decorative coatings companies based on 2009 sales ($bn) Approximately 50% of the total market by value held by top 10 players Regional Players despite challenges, enjoy market shares

4. Increasing Shift of Global players towards developing economies & Segments SHERWIN WILLIAMS KANSAI PAINTS ASIAN PAINTS AKZO NOBEL NIPPON PAINTS PPG JOTUN PAINTS

6. Multiple Drivers for strong growth in Asia . Construction & Infrastructure Development - China, India, Thailand, Vietnam,& Malaysia Automotive Industry Development - China, India, Korea and Thailand. Global Construction Spending by Region Index of Housing Activity (2004, 2009) Regional Distribution of Vehicle Production (2009) North Europe Asia Latin ROW America Pacific America

7. Ample growth opportunity in developing countries 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Australia UK US NL China Hong Kong India Indonesia Japan Korea Malaysia Singapore Taiwan Sri Lanka Pakistan Vietnam Thailand GDP per capita (USD) Paint usage per capita (litres) Bubble Size = Market volume (ML)

9. 70 % of Indian market potential in 2014 will be Deco S Decorative Per Capita Litre However, the growth story faces some challenges 0 Wood Finishes &Adhesives Powder Industrial Car Refinishes Marine & Protec-tive Decorative 20000 Rs.Cr. Performance coating Decorative paints

11. Watch list 2 - Monomers Monomers have increased 120-200% in 18 months Decorative Paints | Price Increase Announcements - October 2010 Source : ICIS - Average of Mid Range Spot Price Supply/Demand pressure producing dramatic impact……!

12. Raw Material Precursors – Feedstock increases are massive! Decorative Paints | Price Increase Announcements - October 2010 Source : ICIS - Average of Mid Range Contract Price. Euros. 83% increase 116% increase 291% increase 79% increase

13. SQUEEZE Contractor Painter Energy & Feedstock Costs Increasing Chemical Polymer & Paint Producer Market

14. Macro Trends & Implications for Indian Paints Industry

15. How global megatrends affect our industry

16. Exponential growth of the world population, from 6.5 billion to 9 billion Business Unit | Title

17. Over 2.5 billion people will achieve middle income segment and spend accordingly

18. Resulting in significant growth opportunities

19. Global urbanization facts

20. This leads to significant challenges

21. Today 1.4 Earth carrying capacity (ECC) The Earth cannot cope with our current levels of consumption and waste We need 2 earths by 2050!!! The Earth cannot cope with our current levels of consumption and waste

22. Sustainability is the essential element in the period of new growth

23. Addressing some of the challenges ahead

24. Urbanization leading to increased demand for sustainable housing

25. Coatings Industry needs to deliver the products for a changing world

26. Transition driven by Environmental regulations & Customer preference Decorative Coatings Volume by Coatings Type (2009, 2014f) Source: Orr & Boss, Inc. estimates Where is the market going? 2009 2014f Water – Borne 81% 84% Conventional Solvent – Borne 14% 7% High Solids Solvent – Borne 5% 9%

28. The Key: Working upstream for True Sustainability Add arrows 68% 27% 5% customer Cradle to gate Lifecycle: Cradle to grave Carbon intensity in our own scope is low…but the pictures changes when we take supply chain view

29. Sustainability requires a holistic approach AkzoNobel uses the 5 Pillar Framework effectively to retain a No.2 position on the Dow Jones Sustainability Index.

30. Customer Trends

31. Customers demanding Transparency & Accountability Industry will need to be increasingly transparent about their activities, environmental impact, and performance Should we label our packages for harmful contents ?

32. Convenience & Smart Solution Driven World Lives & Work Complex and Time-pressured, Convenience and Efficiency valued Solutions to make spaces efficient, increase functionality, decrease energy need Should we be considering DIY solutions for India ?

33. Rapidly Advancing Technologies Nano technology, Memory Polymers – stretching the possibilities of what coatings can do Mono functional to Multi functional RM Should we opt for renewable RMs?

34. Changing Retail Environment Experiential Inspirational Targeted Use of augmented reality Should we invest in Retail evolution?

35. ‘ Professional’ consumer Demanding, Discerning, Knowledgeable, Aware Empowered by democratization of information through internet Expects more from the ‘experts’ & brands Should we be selling solutions instead of products?

36. Sustainability - a must, not a choice anymore Legislations / NGOs will become stricter Should we adopt International Standards? Our Suppliers contribute 68% of the Paint Industry Carbon foot-print Should we invest in upgrading our vendors? Should IPA invest in R&D of alternative RMs? Corporate Transparency & Accountability Should we adopt voluntary package labeling? Should IPA take the lead on industry image? Consolidation will continue. Likely to be an increase in M&A activity over the next couple of years Should we be exploring collaborative partnerships? Implications & some choices before us

37. This is an exciting industry Colour Growth Innovation Exciting Opportunity Collaboration Room for all of us to grow