On the divestment in Indonesia - in international markets, Sri Lanka has been challenging in FY25 and Africa, Egypt etc. have been challenging for many quarters. Similarly in Home Decor, you have listed 9 verticals and you have taken impairment losses this quarter and earlier quarters also in some of those. Are you evaluating more such divestment in international markets? And even in Home Decor would you now evaluate whether you need to exist in all those 9 verticals?
From a global perspective, right now we are looking at more at consolidation of what we want to do because some of these units are not of a small size except for South Pacific operation which is a small operation. Our presence in Middle East is now big. Similarly, when you look at Bangladesh and Sri Lanka, the investments are big. We have made the entire foray to ensure that we are amongst the top two players in those countries. From a Home Decor perspective - as part of our corporate positioning we are the only paint player possibly who are into the whole area of home very strongly. If you are part of the Decor life cycle of the customer, then whether it is a rented home, or a first home, or a renovation, or a second home or even a kids home you're part of the Decor life cycle of the customer very strongly. There also we are looking at consolidation. We want to say that in all the brand spaces, if you are not one or two looking at the businesses, we should not exist there going forward at this stage. The other foray is to offer a complete solution to the consumer so that we are able to say it is truly decor under one roof. Everywhere the endeavor is that if you have to exist, you have to look at number 1 or number 2 position being there.
One year ago, most of us would have expected Asian Paints to defend market share better when the new entrant came in. And we would not have expected the consolidated EBITDA margin to drop below 18%. So at the end of the year with hindsight benefit, we feel that this entire thesis has not played out - maybe number two, number three players have defended market share better. What do you think has played out this year?
The factors which have been played are multiple. First, given that the overall market has not played up to that extent, we did not anticipate possibly the kind of competitive intensity which would have come up given the fact that demand was not there and everyone was fighting for the same share. Given the fact that you have a certain share, you were possibly coming under glare from all the competition. It's not about one competition, it is about everyone really fighting for the same pie. Second, when you look at the price elasticity and fighting the competition on a certain pricing level, you would be very clear that you would go to a certain level which is sustainable, and you will not go to a level which is unsustainable. I don't think so it is a year's game. It is a game of looking properly at the next three years as well in how it pans out because some of those performances can be just a flash in the pan. Sustainability is more important. We could have guarded the share much better by spending some more money and so on. But one thing is very clear is that you are looking at possibly an area of sustainability.
A fear - we have been losing a lot of front-end mid-level management teams. Is it a perception that somewhere we are defaulting in execution and that is also creating a challenge for us? Does it worry you?
For any organization, it is important to keep on looking at saying whether your strategy and execution skills are syncing together in the right way. As we are looking at in the market today, there are definitely areas which we are trying to strengthen, whether it is distribution or servicing or even from looking at how we want to build capabilities into our people going forward. What we are very clear is that given that we know the market, we know our dealer relationships are strong, to that extent we are looking at bringing in more technology. We've got a Salesforce.com which we've implemented as part of our technology so that we are able to service the market better. At the same time, have an internal productivity what we can look at. Similarly, looking at dealer coverage, dealer opening, dealer servicing in a certain period. We are re-looking at some of those full areas in terms of execution so that we don't lag in those areas as we go ahead.
In the new product contribution or innovation, you gave a number of 14% of sales. Three-part question: (1) entry/mid/economy/premium split in volume value? (2) Is this overall mix 14% - what is the deviation if our gross margin is 42% on average, what percentage of business is below that? (3) Is it really a conscious strategy to develop volume? At some point do we take a call that this new product has to come in Rs 300 plus or Rs 400 plus or Rs 2000 plus per litre segment?
The innovation in terms of new products happens across the economy, premium and the luxury space. If you look at it, the larger plethora of products - about 60% of the products will come in the premium to the luxury space what we will introduce. Even from a point of view of contributing to the gross margins, that would be similarly that same range. From a division point of view, today like last year also we have looked at launching a plethora of luxury products because there is a constant kind of foray in looking at premiumization. But at the same time, we introduced product called the Neo Bharat last year, which was more at the bottom of the pyramid level. The larger contribution definitely comes from premium to luxury. It's just that last year we have seen a little bit of a down trading which has been happening, and that is why the mix has not been so great. As we keep on going, innovation comes from identifying the consumer gaps - it's not that I will just pre decide that I'm going to launch a product at an X rupees per litre. You map how the market gaps from a consumer kind of buyout pan out and then you expand the price point.
You talked about the distribution reach of 169,000 for us. As we go ahead, where I'm coming from is FMCG company says that the total reach possible is 12 million - with respect to paint sector what is the maximum potential we can get to? And earlier you have talked about expanding into markets like J&K. Are we going for smaller dealers now versus what we have been doing in the past?
We must remember that today the Indian market is expanding very fast. The consumption levels today is across the length and the breadth. The kind of infrastructure which has come in Northeast - suddenly the whole market has exploded with newer touch points, there could be about thousand touch points which have come in. Similarly in Jammu and Kashmir the moment the normalcy comes in, there are more touch points. The suburbs of metro towns keep on developing. Kerala is now like one city. Then there are these whole smart cities which are coming out today. Every year there are new touch points which are coming up - we look at towns with a certain population where the representation is not there. A larger number of dealers which we are opening are smaller dealers given the fact that they are in smaller towns, smaller cities or in the suburbs. We possibly even look at counters who have never dealt with paint earlier - it could be just a cement counter for example, there might be 1,00,000 touch points of cement counters who have not even expanded or never sold paint. So the potential today is immense. Will it stop at 2.5 lakh? No it will not.
It's been about nine months since we've seen very low volume growth in the industry or decor. How should one think about volumes going forward? Should one expect double-digit volume growth to come back - supported by lower base? Or is there still high inventory in the channel or new stocks from other players that can limit possibility of double-digit volume growth in the coming year?
As I said, currently given the overall environment, I think we should be more practical in looking at what is the reality in the market today. Today we are hearing across brands that demand conditions continue to be sluggish. We don't see really acceleration in the demand and particularly when we see the overall home, home construction segment, we are not seeing that a crazy demand is coming. It might be towards the infrastructure side, as I mentioned, we would see a more flurry of overall demand and consumption. From that point in view today, I don't think we should just say that we are gunning for double digit or something like that. We should really be watchful and look at what is achievable and what you are targeting aligned to your strategies. From that point of view I would still say that at this stage, single digit value growth would be a more good stronger imperative.
On crude, has corrected quite a bit - what are your thoughts on the possibility of price cuts or making paints more affordable? Would that be a factor that can drive up volumes, or do you think higher dealer margins can lead to better volumes for you?
You're right today if you look at from the point of view of crude, the prices have come down and trading at one of the lower levels. Similarly, we have seen the rupee dollar parity which had basically gone to a certain level and now starting to come down. I think the whole volatility in the environment is very high now. At this moment I don't think it would be really appropriate to take stances in looking at either decreasing or looking at prices in very different ways. I think we need to have patience. We don't know what the second salvo of tariffs is which are going to come after 90 days of this reprieve which is going to happen. And we don't know how the geopolitical conditions will pan out. At the same time, there is also the talk of some anti dumping duties which are going to come in for some of the raw materials. So we'll have to wait and watch and see how these things pan out - it's too early to say that you could take up price decrease going forward.
Five years ago if you were told that there will be sharp revival in urban housing and the K shaped recovery favoring urban consumers and on top of that under your leadership our extra focus on participating in B2B business - we would have thought a very strong scenario for Asian Paints in the next 5, 20 to 25 years. All the macro indicators are very strong, but somewhere the paint industries have decoupled from some of those macro indicators?
It's not only the paint industry right now, if you take the entire home industry, everyone is affected. It's not just paint - you've seen today it's also the cement business that's resizing. We see steel where it is going. Overall if you see components from construction categories to in home categories, we are not seeing any big amount of inflation. For example Bath - all the current players, Cera, Parry, all the other players are not looking at any big growth. It is pan home categories and construction categories which have not grown the way possibly we had anticipated. A lot of stuff which has gone into the infrastructure - the number of airports which have come in, the consumption at railways, defense, some of these sectors - is something which we are looking at rather than just looking at the home segment. The Awas Yojana for affordable housing and from the point of view of mid to luxury housing are some of those avenues which are going to come around as I see it from a cyclicity point of view.
Have we done at our level or industry level, any studies where we compare per litre pricing of paint versus per capita income of some of the developed markets versus us in terms of index? Optically as an analyst, I can see that collectively the industry has improved margins in last 10 years, but have we somewhere made the affordability quotient which has actually led to compromising the industry growth?
If you look at the per capita consumption of paint in India is much lower as compared to any of the Western geographies. So there is potential in looking at increasing that consumption. Which means that if you can get more households to either consume paint or even if you look at increasing the frequency of painting, both will improve the per capita consumption of paint. As a leader, we have been looking at some of those imperatives. For example, we have looked at various avenues where you can ask the consumer to repaint his house at a higher frequency - it could be just two walls, another room, or other avenues so that per capita consumption can go up. That is still a big opportunity for us in India.
As a 60% market share player, anybody who is 60% market share intimidates competition and potential new entrants. From the perspective of perhaps the strategy or the board, to what extent are we willing to go to retain market share? Maybe it could mean that you cut your margins to much lower levels for a year or two just to defend market share and scare competition. Or we are okay with ceding market share and maintaining the margin?
I don't know the number which you're quoting is your calculation. But what I see is very clear is that from the correlation between market share and margin, we should look at something which is really sustainable going ahead. There is no point looking at artificially trying to do something in the market which possibly finds that after about a year, year and a half you're not able to sustain. The approach which we are following is very clear - if you play to your strengths, you play to building the brand, if you offer the customer the best value proposition, and if these actions give you the best retention of share or even gain of share, possibly that would be the best route to take. Just irrationally going after saying that I want to prevent the share at any cost whatsoever might not be a good approach.
On the warranty discussed in the presentation - is there a cost escalation because of this from a raw material perspective and from a claim perspective? Earlier it was a three-year warranty, now four years and on some products 25 year warranty. How important is this from a consumer decision perspective given the competitive scenario, and the new player was more on foreplay - how will it help in FY26?
When we have looked at seeing our warranties, we have looked at our formulations and the formulations have been done in such a manner that the overall margins which we derive out of the product, we don't have an impact from a cost perspective. So, it's more a chemistry marvel what we have put, looking at innovation which comes in the formulation. Second, warranty becomes a de facto correlation to the quality of the product. It's not necessary that every customer will look at five years or ten years or fifteen years of repainting. But it becomes definitely a strong correlation with respect to how you perceive the quality of the product. It gives you an assurance that if this product is going to be talking of this kind of a warranty, it's looking at possibly giving me this kind of durability over a period of time. The relationship of the customer with the warranty is very strong. In fact, Asian Paints were the first one to introduce warranties about 20 years back when we started looking at all these warranties coming into picture. So one cost neutrality and second from a point of view of looking at these warranties becoming a very strong signature of your trust on durability and performance.
On advertising - the new player which entered few quarters back is talking about why continue with the legacy brand and trying to connect with the Gen Z and the new age customer. I understand the warranty bit helps from a quality perspective, but how are you addressing this aspect?
See overall, today when a customer is buying, customer is today relating to a lot of new stuff in terms of what we are doing. For example, we recently launched what is called Chromacosm which is the world's largest colour system, which offers more than 5,300 shades. This is today the world's best colour system what we have launched. Today we offer more than 1000 shops across the country which offers the best colour consultancy, which is what possibly any Gen Z or a millennial customer would really look at. The most important part is the visualization. The work we do on digital, whether it is with apps or whether it is on our website is absolutely led through artificial intelligence and looking at all the latest stuff. As we know it today, possibly we invoke the latest and the best technology - one technology signified by innovation (e.g. a product which can last on a terrace waterproofing for 25 years is a sign of innovation which connects with a modern age customer); secondly, the work around colour consultancy. So we believe that as a brand which has been there for so many decades, we don't have to go on the rooftop and shout that what we are not doing or what we are not changing. We believe we are bringing the customer the latest.
If we look at the current financial year gone by, it is by far one of the worst financial years we've had in a long time. How much of this would you attribute to new competition and how much to the broader economy?
If you look at over the last two decades and this is something which I had commented on last quarter as well, we have not seen possibly demand conditions like this in the paint industry ever. If you look at the overall organized paint growth, especially in the decorative sector, it is negative this year. If you trace back for the last full 2 decades, there's not a single year where you have got a negative growth for the paint industry. So I would say that one would largely attribute it to the slowing down of the market - demand conditions being very challenging both from new construction, second from the repainting, and third while the B2B business is good, it is not compared to what we have seen in the last five years. While we have always seen competition in the market - newer players like JSW and Indigo and so on which have come into the market - this year we've seen about 3-4 new other players which have come in the market. I would say that possibly to some extent in a market which is already slow, the intensity of competitive action has been much more as well. It is a double whammy in combination of the market slowing down plus increased competition coming from both the existing and then new players.
Given the increasing competitive intensity, what is our strategy going to be to defend market share, to defend profitability? How do we plan to come out of this competitive environment in a positive way?
Our stand is very clear that we would look at playing to our strengths. The whole area of Asian Paints, bringing a certain quality, certain kind of loyalty, certain value to the consumer is very important because we believe if your value proposition is strong, the customer will buy into it. It's not the question of just discounting. It's not a question of offering something very cheap. It's the value which counts. Therefore, we would continuously play on the value proposition very strongly - whether it's economy, premium or luxury. We also believe that we have a very strong network. I spoke about 1.69 lakh distribution points. The moment the demand conditions are back, we would see a much better performance ahead. From a competitive intensity, some of it will continue, but it has to be countered only to an extent possibly that it doesn't go beyond a certain value in what we are able to offer to the consumer.
Extending from the previous comment that competitive intensity is going to stay high - do you see a downside to this 18 to 20% margin guidance considering there is more need to spend in the market, whether in increasing brand loyalty, visibility, improving the value proposition further, probably investing more in the market?
There is no two ways about it that possibly you will have to spend more in the market very clearly - whether from building the brand or seeing that you are present across the country, distribution spends, or looking at elasticity of your pricing vis-a-vis any other competition. Therefore, we are still very confident that today as we are going ahead, there are series of things as an organization which we have taken up. One is the very big area of backward integration which we have built in - we saw it coming earlier what was going to happen in terms of competitive intensity and we invested earlier. We have already unleashed three backward integration initiatives which are in operation right now; two more will kick in now and next year. That is going to bring us a very strong cushion for some of the spend which we are going to make in the market. Second, we are constantly working around looking at sourcing purchasing efficiencies given the fact that you are able to buy materials at scale. Third, these times call for very strong cost efficiency measures - we've already kicked in an exercise to look at what we can do in that space. The last area is that we've seen a deflation in the last quarter; we see in the current quarter also there would be a deflation of about 0.5% to 1%. All these are good arsenals to give us good spending power in the market at the same time maintaining the guidance which we have and are going to maintain.
On demand, you gave 3 reasons why FY25 was soft for the category - new construction not being as much, renovation/repainting intensity, and B2B. As you look through FY26 or as you exited the March quarter, which of these three you sense is going to pick up first? And where could the category land in FY26 because FY25 was a negative year?
When we look at FY26, there are some good areas which are occurring. First, what we are seeing from the last third and the fourth quarter is the government spending is coming back which was disrupted in the first half because of elections or otherwise. As Asian Paints, we are looking at any other airport, tunnels, bridges - we feel that is going to give us a good gain from our whole B2B business. Second, we also see that the mid-to-luxury housing is going to flare up as we go ahead - we are already seeing second homes coming up in a very big way, which basically gives flip to the premium and the luxury products. Third T3-T4 is a good indication while looking at some of the rural demand coming back. Given the last year was a good monsoon and we are looking at a predictability of a good monsoon further - that is another big bright spot. Given these factors, unless there is a geopolitical event which really looks at spoiling this trajectory, we think FY26 should definitely be much better. But obviously there is a caution till the time we really see demand really picking up. The idea is to aim for single digit value growths for the year FY26.
On CapEx - you mentioned Rs 3000 odd crore on the futuristic emulsion plant. Between FY26 and FY27, any colour on standalone and consolidated CapEx for FY26 and FY27 for Asian Paints?
Already about a year and a half back we had announced our overall consolidated CapEx which was about Rs9000 crores in what we were spending. If you look at it today, we have been able to spend a considerable portion out of that till FY25. As we look at FY26, our overall CapEx will be complete from a white cement perspective. It's only part of the VAM VAE plant CapEx which is going to go till FY27 which would be left out of Rs 3000 crores. (Parag Rane: We are expecting about Rs 700 to 800 crores outflow this year and probably a similar number next year.)
Was there a conscious decision to improve gross margin in this quarter because the sequential improvement is fairly impressive, and on the other side your underperformance versus market has also increased? Do you think you may have lost some market share because of this gross margin focus?
The gross margin improvement came at two levels. One was the deflation which happened in the market and second, the raw material efficiencies which have been built in with the work we have done. So the improvement came from looking at cost from a raw material perspective which basically jacked up. The bonus came from the point of deflation in the market, which gave us the overall gross margin improvement. From an overall share in the market - we will have to wait for all the results which would come in for Q4. But given that the market being negative, there could be the possibility of some loss which could have happened to some of the other existing players or some part to the new competition as well.
Just clarification - single digit value growth for FY26, is that your outlook for the category overall industry or for Asian Paints? And do you still maintain 18 to 20% consolidated EBITDA margin guidance?
For Asian Paints. (On EBITDA guidance:) That's right.
And this strategy will continue even going forward that you will not want to respond on pricing or because we are getting into a deflationary environment?
It's not that we are looking at saying that we have not responded on either on the pricing or in terms of the product innovation. As I said, we are focusing very clearly on looking at the value proposition. It will not be singularly only on the price. What is the price which the customer is willing to pay for a certain quality and for a certain brand which they have in mind. That is something which we are playing the card because there is a certain inherent strength in the brand. We also want to spend a lot of money with respect to building the brand further - from consideration to buy or from a share of search. Therefore, it will not be that you are not reacting, but you're reacting not in possibly a more predictable way what the market expects.
This 14%, how much percentage was interior or exterior?
Largely it would come from interiors about 65% would be interiors roughly.
How do we decide the number of 5000 or 10,000 dealers in a year? Is it a function of incremental growth we get from them? How do we arrive at a number of how many dealers to add in a year?
We do a scientific cluster analysis in seeing a representation in terms of the reach to a particular consumer. We look at the minimum counters we would really need to cater to a certain population of a customer in a certain cluster - because today's world when people don't want to travel, convenience at footstep becomes a very big area. The newer towns are full opportunity areas where there is possibly no counter. We would like to open a counter so that we can give access to that town. Consumer reach is something we take as a very finite parameter. We would not also like to say that we keep on offering or improving the counters only in one cluster, otherwise it will only distribute the sales, not increase the sales going forward.
You talked about the organized sector not doing well, in fact negative growth for the organized paint industry. What in your estimate is the size of the decorative paint market - if we include waterproofing, putty, everything - and what would be the share of organized and unorganized?
Roughly the overall paint market size if we take waterproofing and putty everything would be about Rs 80,000 crores what we see in overall size. From a value share today 75 to 78% is organized.
What's the whole idea behind Nilaya Anthology?
If you look at the whole germination of the paint industry, largely the presence has been more from a point of view of economy to mass premium to premium. Today if you look at luxury homes, if you look at possibly the top 500 HNI families in India, they would really look at getting a lot of things from outside India by either travelling to Italy or Germany or looking at really purchasing a lot of stuff from there or seeking something which is exclusive, which is bespoke, which is limited collection - really in the arena of super luxury. Similarly, if you look at from an architect interior design community, if you look at the top 300 to 500 architects' designers today, they look at something which is very different, which is unusual, which is again limited. With that intention we have looked at basically making it as international design destination for global luxury. I talk of confluence and design. We have the best of the Indian decor items that we have put - kitchen, furnishing range, wallpaper range, texture, artifact. And from the best of the world - this space harnesses the best from say, Denmark to Portugal to Japan to Italy. Right from texture to furnishing to mosaics to kitchen to furniture to bath to Sabyasachi, everything is under one roof. This is the first time in the world someone has created an infrastructure like this.
On the competitive intensity - while a lot of attention has been towards the newest entrant, would you say other players like Jotun Paints, Nippon have seen competitive intensity step up from them as well, or would you attribute most of it to the newest entrant?
When you look at the players you just named, I think we are seeing definitely that they have been affected the most by the newer players. In fact, there was a time when they were possibly following the same route as some of the newer competition is following now. As I said that path is sometimes not very sustainable. And after five to ten years of existence, they've realized that the path of just spending money and buying sales is not a great path. That is how now they are really facing the crunch in terms of possibly not being able to grow the market to that extent. In fact, we have seen possibly in some of those brands the maximum battering down has happened this year. So it is a combination of existing players and some of the new players who have come in, which are adding to the competitive intensity, not these two.
You also mentioned down trading earlier. Would you attribute it more to customer shifting preferences from premium to economy or shifting brands completely?
How we are seeing is that there are some consumption trends which are changing in the market - people are now differentially spending money, whether on travel, food and so on. There are much larger spends in some categories like hospitality. There has been a liquidity crunch especially when it comes to renovation businesses in Home Decor and the painting business. Given the bit of a crunch, there is a postponement which is happening. This year on the repainting there has been a bit of a postponement. Given that if some people are constrained to do it because there is event at home, there is some amount of down trading happening - from saying that if not luxury I'll take into premium, or if not premium I'll buy into a good super economy product. That is what we are seeing as a little bit of a down trading which is happening across.
On the industrial business on a full year basis, we've been able to maintain margins in the automotive segment, but we've lost some margins on the non auto side. Recent strategy briefing by Nerolac spoke about structurally improving their industrial margins in the India business. Where do you see margins standing for both of our PPG JVs and the overall mix of industrial going forward?
Today the auto and the refinishes margins are the maximum of what we garner. We cater to a lot many customers across. Our margins are very strong in both the auto and the refinishes. The margins basically come under some pressure when you look at categories like powder and protective paints or even a Road marking paint. Some of those categories are more prone to possibly lower margins as compared to auto and auto refinishes.
The difference between volume and value has increased from 8% versus 5% that we had seen in earlier years. Should one take this as a new normal until the high value paint category comes back?
I had commented last time also that we are aiming that this should not be more than 6%, as we see it this time it is between 7 to 7.5%. The endeavor is very clearly, as we look at our product mix very strongly and the intention would be to get it within that band of 6%.
When we compare per capita consumption with developed markets, the ratio is actually reverse than us in terms of industrial being 70-75% versus ours actually 75% deco. So in deco we are not as much under indexed as the overall number shows. Is that understanding correct?
The industrial markets across the international geographies, especially the West, is much more developed. The ratio there is 70% is industrial and 30% is Decor, whereas in India the ratio is the reverse. We believe that with the rate of industrialization, the way government spends are in infrastructure and other things, today we are seeing that trend in industrial contribution seems to be going up. We have seen for the last two years the industrial growth being very strong. Possibly we are inching towards the industrial contribution going up, but I think very far away from where the Western world operates in.
When I look at the overall performance, let's say +2% volume, revenue decline of 5%, gross margin higher - is it only to do with COGS or is there any other up or down elevators here?
It is only COGS. (Parag Rane: In this quarter, we had some benefit of past price increases which has flown through. So that's marginal benefit also in this quarter.)
Clarification on volume versus value - I understand the philosophy of volume which is largely tonnage. After a point in time it becomes meaningless. When you have such a huge divergence, there is a globally accepted metric called underlying volume growth where you could debase or rebase to have mix included. Is there a reason why we don't follow that and just stick to the tonnage bit?
This question gets asked often, but I think in our business tonnage still makes sense is how we see it on a like to like basis, not really comparable with other FMCG industries which do underlying volume growth. And to be fair, I think most of the other players also do not disclose any volume numbers as well. So to that extent, I think what we disclose is apt.
When you were discussing the white cement plant launch in June, you said this is the first foray into cement. Is there any desire that longer term, just the way cement companies have come into paints, you would have some desire of it - in terms of being open to it?
It was just to amplify the fact that it was, I didn't say first and only - I said first foray into cement. We would like to first see how this goes because white cement is very different - it goes into repairs, putty, into a lot many other segments like sanitary and so on. So we would really want to see that first we get this thing going and then examine if possibly there is any other desire to get into any other cement in future.
In VAE you are among the four companies to have that capability in March of this year, and you have discussed the differentiated products which is possible once you have that. Will that be essentially in the top end? What exactly is the untapped or white space left in terms of your product portfolio? How can it help?
From where the emulsion comes in, it's the versatility of that emulsion which can be used from economy to premium to luxury. The versatility it offers is very good because one, it is essentially environment friendly, low VOC, no smell. The other thing is that it can offer paint properties which can be very different at a cost which is unbelievable. The opportunities it opens is pretty high. People import it - it is not something which is available in India. People import it from outside. But the whole equation changes once you are making it because you are making the monomer and you are making the emulsion as well here. So the whole cost efficiencies change drastically. And not only that, today there is no paint company making it across the world. Once the paint company starts making it, then you can tailor that requirement to your need so that you can possibly align it to a certain property to what you want.