INDIAN PAPER INDUSTRY

B2B MARKETING

Group 1:
Hardik Mishra
Manoj Iyer
Saurav Jalan
Sumanta Samantaray
Tarun 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
•60.8% of production is based on non-wood raw material
•39.2% is from wood-based material

WOOD-BASED MATERIALS NON-WOOD MATERIALS

• Wood • Domestic refuse
• Sugarcane (Bagasse) • Industrial refuse
• Bamboo • Office, trade & roads refuse
• Flax (Cigarette) • Rayon pulp
• Cotton & Linen Rags • Bleaches
(Letterheads, Currency) • Dyes, chalk clay etc
• Titanium oxide
 APPLICATION IN INDUSTRIES
Notebooks,
Toilet Paper,
PRINTING & Diaries,
CLEANING Facial Tissue,
Writing Newspapers,
Paper Napkins
Books, Magazines
etc.
etc.

Paper Currency,
Quilling,
VALUE Chequess, ART Origami, etc.
Vouchers,
Tickets etc.

Sand paper,
Corrugated Blotting Paper,
PACKAGING Boxes, Paper OTHERS Litmus Paper,
Bags, Electrical
Envelopes etc. 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
 CORELATION BETWEEN PAPER INDUSTRY AND GDP GROWTH
25

20

15
% GROWTH YEAR ON YEAR BASIS

10

0
1 2 3 4 5 6 7 8 9

-5

SOURCE:CMIE
 YOY GROWTH OF 3 INDUSTRIES
60

40

20
%GROWTH OF THE SECTORS

RETAIL
BOXES/CARTONS
PAPER AND PAPER PRODUCTS
0
1 2 3 4 5 6 7 8 9

-20

-40

-60

SOURCE:CMIE
80

60

40

20

0
1 2 3 4 5 6 7 8 9

-20

-40

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
 TISSUE & HYGIENE INDUSTRY
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

THANK YOU