INDIAN PAPER INDUSTRYB2B MARKETING

Group 1:Hardik Mishra

Manoj IyerSaurav Jalan

Sumanta SamantarayTarun Daga

Uma Balakrishnan

AGENDA

• Industry Overview• Paper-Making Process• Application in Industries• Growth Drivers in Paper Industry

– Developmental Challenges– Issues & Concerns

• Effects due to the performances of GDP and Retail Sector• New Technology Breakthrough• Packaging Industry• Printing Industry• Tissue & Hygiene Industry

INDUSTRY OVERVIEW

• India is the fifteenth largest producer of paper in the world

• Indian paper industry accounts for 1.6% of the world’s production of

paper and paperboard

• Industry is dominated by small and medium players and less than 25 have

capacity of more than 50000 tons p.a.

• Consumes 7 mmt or 3% or total wood consumed in India

• Estimated industry turnover is Rs. 25,000 crore & operating capacity

stands at 9.3 mn tons

• Overall consumption is 8.86 mn tonnes and per capita consumption is at

8.3 kgs

INDUSTRY OVERVIEW

• Provides employment to more than 12 lac people directly &34 lac people indirectly

• Growth from 2002 to 2007– Newsprint-13%– Writing & Printing-5%– Containerboard- 11%– Cartonboard-9%– Others- 1%

• Production is likely to grow at a CAGR of 8.4% while paper consumption will grow at a CAGR of 9% till 2012-13

• Industry works in tandem with economic fluctuations

PAPER-MAKING PROCESS

RAW MATERIALS USED

WOOD-BASED MATERIALS• Wood• Sugarcane (Bagasse)• Bamboo• Flax (Cigarette)• Cotton & Linen Rags

(Letterheads, Currency)

NON-WOOD MATERIALS• Domestic refuse• Industrial refuse• Office, trade & roads refuse• Rayon pulp• Bleaches• Dyes, chalk clay etc• Titanium oxide

•60.8% of production is based on non-wood raw material•39.2% is from wood-based material

APPLICATION IN INDUSTRIES

OTHERS

ART

CLEANING

PACKAGING

VALUE

PRINTING & Writing

Notebooks, Diaries, Newspapers, Books, Magazines etc.

Paper Currency, Chequess, Vouchers, Tickets etc.

Corrugated Boxes, Paper Bags, Envelopes etc.

Toilet Paper, Facial Tissue, Paper Napkins etc.

Quilling, Origami, etc.

Sand paper, Blotting Paper, Litmus Paper, Electrical Insulation Paper etc.

GROWTH DRIVERS IN PAPER INDUSTRY

• Economic Growth• Higher literacy rate• More government spending on education• Population growth• Changing demographics

– Urbanization– Higher proportion of young adults

• Better living standards• Increase in use of advertisement and direct mailers• Increased use of multi color printing

– Production of better quality paper

DEVELOPMENTAL CHALLENGES

ISSUES & CONCERNS• Limited wood supply

– Increases costs– Absence of government policies favoring plantation

• Begasse/Straw– May not sustain future growth– Used by mills for co-generation of power limits access

• Low recovery rate of recycled paper– Currently 20% of waste is recovered vis-à-vis 65% globally– Utilization of recovered paper is 47%– Heavy dependence on expensive imports

• High energy costs– Loss of core sector status– Imported coal is costly and prices escalate greatly

EFFECT ON PAPER INDUSTRY DUE TO GDP AND RETAIL SECTOR PERFORMANCES

1 2 3 4 5 6 7 8 9

GDP 7.39 4.03 5.22 3.77 8.37 8.3 9.33 9.67 9.06

PAPER AND PAPER PRODUCTS 14.35 -5.02 2.41 5.84 6.05 4.26 1.59 4.14 2.61-2.5

2.5

7.5

12.5

17.5

22.5

CORELATION BETWEEN PAPER INDUSTRY AND GDP GROWTH%

GRO

WTH

YEA

R O

N Y

EAR

BASI

S

SOURCE:CMIE

1 2 3 4 5 6 7 8 9

-60

-40

-20

0

20

40

60

YOY GROWTH OF 3 INDUSTRIES

RETAILBOXES/CARTONSPAPER AND PAPER PRODUCTS

%GR

OW

TH O

F TH

E SE

CTO

RS

SOURCE:CMIE

1 2 3 4 5 6 7 8 9

-40

-20

0

20

40

60

80

GDP PAPER AND PAPER PRODUCTS BOXES/CARTONS RETAIL

SOURCE:CMIE

NEW TECHNOLOGY BREAKTHROUGH

• Laser guaranteed paper for laser printing

• Introduction of compostable disposable cups

• Launch of hypoallergenic, latex and fragrance free natural diapers

• Use of banana trees as source of input for paper production

• Pulp waste is used as input in cement industry

• Nowadays heat transfer paper has been introduced

APPLICATION AREAS STUDIED

Packaging Industry

Printing industry

Tissue & Hygiene Industry

PACKAGING INDUSTRY

PACKAGING INDUSTRY

• Packaging of consumer products and durables

• Cartons and packages could be of various packaging levels:– Primary package– Lot-wise package– Cartons containing lots as per transport requirements

DERIVED DEMAND FOR PACKAGING

The demand for these products may fluctuate due to• Economic instability

– Alters purchasing power of consumers– Manufacturers may change the SKU and hence packaging

• Change in consumption habits– Changes in culture & generations

• Change in client’s strategies– Short-term schemes– Diversification into other products

• Substitute packing materials– Innovative methods adopted by companies– Polythene, jute etc.– Not usable for delicate products or perishables

PRINTING INDUSTRY

Applications:

• Copier and desktop printing

• Wedding cards and invitations

• Greeting cards

• Publication industry

PRINTING INDUSTRY

Factors affecting the industry:• Conscious reduced usage of paper

• Communicating via technology & internet

• Fluctuations due to festive seasons

• Access to e-books and e-publications

TISSUE & HYGIENE INDUSTRY

Applications:

Product Wise:• Paper Towels• Facial Tissue• Wrapping Tissue• Toilet Tissue

Industry Wise:• Airlines• Hotels & Restaurants• Malls and Multiplexes

Factors affecting the industry:• Substituting cotton napkins in dining places instead of paper

tissue

• Airline industry- Cutting costs first included reducing stock of toilet tissue

• Hand dryers replacing paper tissue in lavatories

• Handheld sprays instead of tissue rolls in washrooms

• Increasing use of face tissue by urbane Indians

TISSUE & HYGIENE INDUSTRY

THANK YOU