overview on printing

7/29/2019 Overview on printing

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Overview

Industry Scenario - Why Priroty

PAPER

The challenge for the Indian paper industry to meet the ever

increasing demand of paper, board and newsprint is getting crippled

due to shortage of fibres in the country. The future demand of paper

is expected to grow from 5.6 MT at present TO 9.5 MT in 2010 and

13 MT in 2015. Demand for creamwove paper is expected to

increase by 7-8%. Demand for different kinds of coated paper has

increased by 8% in 2002, duplex board has recorded increase by6.5%, kraft paper has registered a 6% rise in demand and newsprint

an impressive 10%.

Indian paper industry can be broadly classified into paper and

paperboards and newqsprint. The paper and paper board segment

constitutes of cultural paper, industrial paper, speciality paper. We

will be treating newsprint as a separate type of paper and it is dealt

in detail in the last section.

The paper industry in India has a long history with the first mill

being commissioned in 1832. The number of paper mills in the past

with average capacity is as given in the table below.

Year No. of Mills Installed capacity million ton Average capacity ton

1950-1951 17 0.137 8,050

1970-1971 55 0.768 13,5001980-1981 137 1.816 11,500

1990-1991 325 3.304 10,000

1999-2000 406 6.200 15,270

2001-2002 594 8.500 22,000 (approx)



Why a priority?

The Indian paper industry, reeling under liberal imports, price cuts

and rising input costs for the past three years, seems to be on acomeback trail. With the firming-up of international pulp and paper

prices, the domestic paper market registered an upward trend.

In South India, starting with ITC Bhadrachalam Paperboards Ltd

(ITC-BPL) many paper mills increased production and posted higher

turnovers last year on account of improved market conditions. For

instance, The Andhra Pradesh Paper Mills (APPM), The South India

Paper Mills (SIPM), The Sirpur Paper Mills (SPML), Delta Paper Mills(DPM) and the Coastal Papers (CP) have all posted higher turnovers

in 2001-2002.

PACKAGING

80% of the total packaging industry in India representing an

approximate market of £1225 million (Rs86 billion) uses Rigid

Packages, which are the oldest and the most conventionalpackaging. These include:

Glass bottles

Metal cans – food cans, aerosol cans, battery cell cans

Aluminium collapsible tubes

Injection moulded plastic containers made of PVC, PET, HDPE

Barrels made of HDPE

Paper board and corrugated boxes.Some commercial products which have recently changed their

packaging from conventional material are:

PRODUCT PACKAGING PRODUCTS USED

(conventional material replaced)



Milk LDPE film pouches (coated paper, bottle, metal)

Beverage, soft drink, squash, mineral water, edible oil PET (glass)

Pharmaceuticals PVC, HDPE, PP, GLASS (paper, glass to a less

extent)

Beverage crates HDPE,PP, PPCP (wood)Toothpaste tubes and other squeeze tubes HDPE, LLDPE, PP (metal)

Soaps Polyester film, LLDPE, LDPE, PVC (paper)

Pallet Wrap LDPE, LLDPE (heavy duty paper)

Fertiliser HDPE/PP woven sacs (jute)

Mineral LDPE heavy duty sacs (jute)

Cement HDPE/PP/woven sacs (jute)

Retail Carrier Bags LDPE, HDPE, HM (paper, jute bags)

Recent trends in consumption and spurt in branded products has

enhanced the use of flexible packaging products such as: over wraps,

multi-layered/co extruded films, laminated products and poly sacs

in the Indian market place.

Impact of new technology in flexible packaging on the Indian user

industry

The Indian market has graduated from the use of PVC and

cellophane to the use of modern plastic such as PET and

Polypropylene (PP). Some recent usage in flexible packaging in the

Indian industry are:

POLYMER FILM USAGE APPLICATION

LDPE/ LLDPE Sealant layer in lamination, co extruded films,laminated tubes Carrier bags, milk, edible oils, vanaspati (poly-

unsaturated vegetable oil), processed food, dentrifice

HDPE Poly sacks, barrier film in co extrusion Cement, Jute, edible

oil and vanaspati (poly-unsaturated vegetable oil)



Polyester Outer, reverse printed layer in Lamination metalising,

lamitubes Processed food, pan masala, confectionery

BOPP Sealant and non sealant layer in Laminations, over wrap,

metalising Cigarettes, processed food, adhesive tapes

LDPE/LLDPE film is normally used as an extruded film in food

packaging (baked foods, meat, carrier bags), as a co-extruded film in

flexible laminations, edible oil packaging, spices, milk etc. and also

as a coating material in HDPE woven sacks.

75% of the polyester film is used by the flexible packaging sector in

laminated packs where it is normally used as an outer layer onwhich reverse printing is done. Polyester films are also used as

synthetic yarn in India.

BOPP Film is used mainly as over wrapping in cigarettes, textile

products, board lamination, over wrap and inner wrap in biscuits,

bread and confectionery and other food products. However, when

compared to international usage, BOPP is low, this is due to the

problems associated with conversion, investment costs for changingfrom polyester film and the excess capacity of polyester film in

India.

PRINTING

Despite the growth of television and the net, print media has

registered an impressive 10% readership gain in the last two years.The National Readership Study 2002 (NRS 2002) showed that the

print media has added 17 million new readers during this period of

two years.



In the last quarter century, the world printing industry has

undergone a great amount transfiguration. From sheet-fed printing

to web printing, from low speed to high speed, black and white to

colour printing, from paper substrates to as wide variety of

substrates – it was a long way for the printing industry. There hasbeen amazing spread of Information Technology (IT) from the end

of the 20th century, giving enormous information in the form of

printed letters.

Printing industry is a constantly growing industry, continuously

transforming with its growth. The purpose of printing is broadening

to a wide variety of usage: from a traditional purpose of a means of

communication, to a wider variety of attractive packaging, varioustypes of cards, tickets and labels amongst others. Out of the various

fields of communication means, printed material has many

characteristics that are difficult to be replaced by digital

information.

The printing industry is recognised as a core sector.

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Characteristics of Market

PAPER

Size of Market

The Indian paper industry is extremely fragmented. This industry

structure is the result of the past Government policies which



encouraged the setting up of many small mills with as low capacity

as 1 ton per day.

In the newsprint segment there are at present 39 mills (4 in central

public sector, 2 in state public sector and 33 in private sector) withan installed capacity of about 0.836 million tpa at present.

Market Trend

The present domestic paper demand is 5.6 million tpa . Indian per

capita consumption of paper is 5 Kgs with an expected growth rate

of 6-7% per annum over the next 5 years. Paper consumption in

India is expected to reach 9.5 million tonnes by the year 2010 and13 MT by 2015.

The industry is characterised with a closed or dead capacity of 1.1

million. In the last few years, imports have increased substantially

from 102,000 ton in 1996-97 to 450,000 ton in 2000-2001, leading

to increased pressure on domestic production margins.

Among the various sub-segments, paper boards is expected to growabove the industry average growth rate, leading to an increase in its

share within the paper industry.

The capacity utilisation of the industry presently is 67%.

……………………………………………………………………………………………

PACKAGINGS

Size of Market



The Indian packaging industry is of approximately £25 billion. It is a

combination of organised (large Indian and international companies)and the

unorganised (small and medium Indian companies). The organised industry is

represented by less than 5% of the overall industry and controls over 70% of

the market by volume.

The flexible packaging industry is estimated to be approximately £340 million

(Rs 24 billion). The orgnaised sector operates in the laminated product

segment such as Form-Fill-Seal pouches, tetrapacks, and lami-tubes which are

required to use advanced technology to cater to the production of high value

products. However, the small sector which constitutes the unorganised part of

this industry produce over wraps, co-extrusion films, and polysacs .

There are some 600 –700 packaging machinery manufacturers, 95% of which

are in the small and medium sector located all over India. Increasing need forsophisticated packaging solutions by Indian companies supplying both the

domestic and export markets has seen the entry of large players in the

organised sector.

Market Trend

Laminated products with growth rates of 25-28 % and above is the fastest

growing segment in the flexible packaging sector. The three major laminated

products growing rapidly in this sector are: form-fill-seal pouches, tetra packsand laminated tubes.

Form-Fill-Seal Pouches – With a market size of approx. £115 million (INR 8

billion) the organised sector accounts for 50% of total capacity and 60% of the

total market in value terms.

85% of the capital investment cost of this sector is in printing machinery.

Since competition is severe in this segment, converters catering to the

premium segment invest in sophisticated etching and printing technology;whereas converters catering to the medium segment concentrate on low cost

printing equipment. The competition in the medium segment is expected to

increase dramatically with price cutting, and lower margins becoming a norm.

Indian companies in the medium segment with increased market penetration,

improved quality of products and raw materials used, latest technological

inputs are likely to have a higher rate of success.



Large Indian companies in this segment are FLEX Industries, Paper products,

Sharp Industries; some medium sized companies include Multi-Flex, Heritage

Packaging, Gulabdas Flexipack Industries, Arun Mantex, Akar Laminators,

Leela Packaging.

Laminated Tubes - A recent entrant in India, toothpaste, cosmetics,

pharmaceuticals are the major user industries. Toothpaste alone accounts for

over 75% of the market. Growth in the sector is around 15%, the single largest

manufacturer in this segment is ESSEL Packaging constituting a market share

of 85%, but the joint venture between Courtalds Plc and Indian Aluminium is

likely to have an impact on the Essel monopoly in this market . Other Indian

companies in this segment are RAS, KMK Lamipak and Anil Chemicals.

Tetrapacks - First introduced in the 80s to package fruit drinks, HindustanPackaging Ltd is the only company manufacturing Tetrapack in technical

collaboration with Tetrapak. These are used in the packaging of fruit drinks

and to a lesser extent in milk.

Key Players

Of the five major Indian companies in the Polyester sector, Garware Polyester

is the market leader; however with increasing competition in laminated

packaging and backward integration to produce polyester film and resultant over capacity, the Indian industry had to export over 30% of its total sales

value. Over capacity, fall in international prices of polyester film as well as

lack of price competitiveness has made Indian exports non-viable.

Flex Industries is the largest producer of BOPP in India. A number of

companies had planned additional capacities in BOPP expecting the increased

overall demand for flexible packaging ; however, the lower polyester film

prices and a general slow down in the economy led to an oversupply situation

in BOPP resulting in the export of BOPP. Other players in this filed are Paperproducts, Sharp Industries; some medium sized companies like Multi-Flex,

Heritage Packaging, Gulabdas Flexipack Industries, Arun Mantex, Akar

Laminators, Leela Packaging and Guardian Plasticote.



In the Laminated tubes sector, the single largest manufacturer is Essel

Packaging, Courtalds Plc – INDALCO joint venture, RAS, KMK, Lamipak and

Anil Chemicals.

Demand supply conditions

A majority of the raw material manufacturers are in the organised sector

which accounts for high capital costs required to establish in this sector.

Manufacturers of rigid packaging raw materials such as tinplate, rolled

aluminium products, steel sheets, paper and paper board and pet chip and

raw materials for flexible packaging such as aluminium foil, plastic films, PET,

LDPE, HDPE AND BOPP, manufacturers are all included in this category. Users

of plastic films including different types of converters manufacturing flexible

packaging products like laminate films, metallised film, adhesive tapes and

over wraps are also part of the flexible packaging sector. Materials like BOPPfilms are also sold direct to end users as in the case of cigarette manufactures

for use as an over wrap.

There are around 13000 converters in India a majority in the small and

medium sector located in all parts of the country. A fragmented end user

profile, restrictive government policies and low barriers to entry have all

contributed to the profusion in numbers in this industry. The low levels of

technology, prevalence on manual labour, restricted research and

development facilities, high import tariff has affected product innovation andusage. For example the use of BOPP in India was slow due to lack of technical

know-how and easy availability of raw materials to the converting industry.

PRINTINGS

Size of Market

Despite the growth of television and the net, print media has registered an

impressive 10% readership gain in the last two years. The NationalReadership Study 2002 (NRS 2002) showed that the print media has added 17

million new readers in this period of two years. The average reader still

spends 16% of the total media time (about 18-20 minutes per day) reading.

The Indian printing industry is an important factor for corporate India. The

World Bank reports that in 1995, its output of printed information from India



equalled a value of £ 20 million . India thus ranks fourth after Japan, China and

South Korea in Asia. With nearly as much as 80,000 print shops, India is a

significant market for suppliers of printing machinery. It applies very much to

the Indian paper industry with an output of currently 2.5 million tons per

annum.

According to All India Federation of Master Printers, Indian printers still

predominantly (80 per cent) use letterpress-printing technologies. But in

India, as everywhere else in the world, offset technology is gaining in

importance and has grown considerably.

Market Trend

According to surveys, newspapers are solely responsible for the sharp

increase in readership. This is 156 million per annum at present, which was131 million in 1999. Despite this growth, as many as 250 million literate

adults still do not read any publications in India. This leaves plenty of room

for further growth of the printing industry. An interesting point here is that,

the reach of magazines has declined from 93.8 million in 1999 to 86.2 million

in 2002, which is a drop of 22%. More urban housewives now read daily

newspaper instead of poring over magazines.

The emerging trend in future printing technology is flexography and

computer controlled printing process. But the introduction of sophisticatedequipment will never be able to produce quality product at the expected

minimal cost. This is only possible with the active support of skilled

technicians with committed zeal to accept and adapt to the fast changing

technology.

Constraints

The quality and cost of printing are guided and controlled to a large extent by

the paper manufacturers and the government. Sales Tax is one of the hurdlesfor this industry. The making of paper and cardboard, of printed matters and

paper products of all kinds are key factors for the international

competitiveness of the printing industry

overview on printing

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