CORRUGATED PACKAGING:

Future Box

Conference of
Federation of Corrugated Box Manufacturers of Indi
45th

18th November 2016

M L Agarwal
Central India Packaging co Pvt Ltd
Hyderabad

THE CHANGING FACE OF INDIA ..

YESTERDAY
YESTERDAY

TODAY
TODAY

Fastest Growing Economy

Inflation Come down
High Foreign Exchange
Reserves
Rapid movement towards Free
Market Economy
Integrated with the Global
Economy
Promising Consumer Markets
Significant Investment in
Infrastructure Creation for
Industry

Slow Growth Rate

High Rate of Inflation
Poor Credit Availability
Very Low Foreign Exchange
Reserves
Isolated Economy & Markets
Fragmented Industry &
Markets
Serious Infrastructure
Bottlenecks
Low on Self Belief and National
Pride
3

Growing Self Belief &

National Pride

THE CHANGING FACE OF INDIA ..

TOMORROW
GST-IndianCommonMarket
Loweringofrealcosts
Logisticscostreduction
DigitizationReduces:
Costoftransaction
TransparencyLowersCorruption

MakeInIndia
SkilledIndia,motivatedworkforce
MovementtowardIndustry 4.0 anintegratedbusinessenvironment.

INDIA TOO LARGE TO BE IGNORED

Among the Top 5 Economies (PPP) 2005

INDIA AN EMERGING ECONOMIC POWER HOUSE

India & China the Worlds Leading Emerging
Economies

INDIA AN EMERGING ECONOMIC POWER HOUSE

Country/Econo
my

GDP Nominal (billions of $)

GDP PPP (billions of Int. $)

PPP/Nom

2016

share

Rank

2020

Rank

2016

share

Rank

2020

Rank

United States

18,561.93

24.7

21,927

18,561.93

15.6

21,927

China

11,391.62

15.1

16,458

21,269.02

17.9

29,348

1.867

Japan

4,730.30

6.29

5,506

4,931.88

4.14

5,483

1.043

Germany

3,494.90

4.65

4,008

3,979.08

3.34

4,583

1.139

United
Kingdom

2,649.89

3.52

2,928

2,787.74

2.34

3,244

1.052

France

2,488.28

3.31

2,851

2,736.72

2.3

10

3,185

10

1.1

India

2,250.99

2.99

3,297

8,720.51

7.32

12,842

3.874

Italy

1,852.50

2.46

2,046

2,220.58

1.86

12

2,518

12

1.199

Brazil

1,769.60

2.35

2,214

3,134.89

2.63

3,631

1.772

Canada

1,532.34

2.04

10

1,856

10

1,674.31

1.41

16

1,973

17

1.093

INDIAN PAPER MARKET A SNAPSHOT

Demand
Growth for
Paper among
Fastest in the
World
Share of
Coated
Woodfree in
Printing/Writi
ng increasing
rapidly
Corrugated
Papers are by
far the largest
consumers of
Paper
Packaging

Total
Total Demand
Demand 6.1
6.1 Mln.
Mln. Tons
Tons
Excluding
Excluding Newsprint-1.1
Newsprint-1.1 Mln.
Mln. Tons
Tons
(2004-05)
(2004-05)
Splty. Paper (0.20 Mn.
T)
Branded Cut-Size
(0.17 Mn T)
Packaging Boards (1.20
Mn.T)
Low-End W/F (1.40Mn.
T)
High-End W/F (0.68
Mn T)
Coated Paper (0.25
MnT)

Corrugated
Packaging Papers
(2.17 Mn. T)

Fact
Fact Sheet
Sheet
Per
Per capita
capita consumption
consumption 6.5
6.5 Kgs
Kgs
Present
Present Industry
Industry Turnover
Turnover USD 3750
Million
Million
Export
Export Turnover
Turnover USD
USD 240
240 Million
Million
Double
Double digit
digit growth in Branded Cut-Size
papers,
papers, Pkg.
Pkg.8Boards, Coated Papers

EMERGING TRENDS IN THE INDIAN PAPER

MARKET
Indias Large domestic paper market experiencing rapid
growth
growth (7-8%
(7-8% compared
compared to
to 5-6%
5-6% in
in past)
past) aided
aided significantly
significantly
through enhanced
enhanced domestic
domestic supply/
supply/ capacity
capacity
Education - Governments
Governments High
High Priority
Priority Area(6%
Area(6% of
of GDP)
GDP)
another
another Key
Key Growth
Growth Driver
Driver
Massive investments
investments in
in Printing
Printing Industry
Industry spurring
spurring Growth
Growth at
at a
a
CAGR of over
over 14%
14% (Over
(Over 100,000 Printing
Printing Presses
Presses in
in 2005)
2005)
India
India Emerging
Emerging as
as a
a Global
Global Hub
Hub for
for High-Quality
High-Quality Printing
Printing
at a competitive cost

Strong Consumer Demand for Packaged goods fueling

high growth in Industrial grades of Paper & Boards
largely led by growing disposable incomes & Lifestyle
changes
9

INDIAN PAPER INDUSTRY BY RAW MATERIAL

USAGE

Majority
Majority of
of Wood-based
producers
producers are
are Large
Large
players,
players,
Most
Most Medium
Medium and
and Small
Small
players
players are
are based
based on
on
Recycled
Recycled fiber or Agro
based
based raw
raw material
material

Agro Residue
Based -30%
Waste Paper/
Secondary Fibre
Based -35%
Wood Based -35%

Raw material
material Industrys
Industrys greatest
greatest challenge
challenge owing
owing to
to nonnonavailability
availability of
of Land
Land
for
for large
large scale
scale Captive Plantations leading to wide spread use of
10
Non-Wood
fibre

INDIAN PAPER INDUSTRY STRUCTURE

HIGHLY FRAGMENTED
Aggregate
Aggregate Production
Production
2004-05
2004-05

6.1
6.1 MnT
MnT (excl.
(excl. 0.7MnT
Newsprint)
Newsprint)

Total
Total no.
no. of
of Industry
Industry
Players
Players

Approx.600
Approx.600
12
12 (accounting
(accounting for
for 2.5
2.5 MnT
MnT
Prodn.)
Prodn.)

No.
No. of
of Large
Large Players
Players (with
(with
more
more than
than 0.1
0.1 MnT/year
MnT/year
Capacity)
Capacity)

40%
40%

Share
Share of
of large
large players
players in
in
total
total production
production

Approximately
Approximately 590
(accounting
(accounting for 3.6 MnT
Prodn.)
Prodn.)

Number
Number of
of medium/small
medium/small
players
players (with
(with less
less than
than one
one
Lac
Lac Ton
Ton Capacity)
Capacity)

Significant
Significant Investments
Investments by
by the
the Top
Top 10
10 Players
Players expected
expected to
to push
push share
share
from
Production
in
from 34%
34% to
to 42%
42% of
of total
total
Production
in 2010
2010
60%
60%
Share
Share of
of medium/small
medium/small

players
players in
in total
total production
production

11

INDIAN PAPER INDUSTRY MOVING TOWARDS

SCALE
Industry
IndustryStriving
Strivingto
toachieve
achieve
International
InternationalCompetitiveness
Competitivenessthrough
through
Scale
Scale AALarge
LargeNumber
Numberof
ofSignificant
Significant
Projects
Projectsin
inpipeline
pipeline

Current -

Projected -

2007

2010

No. of Kraft
Paper M/C with
0.1 Mn T
Capacity

Number of Mills
with Capacity of
0.1 Mn T

19

12

PER CAPITA CONSUMPTION

Other key sectors
INDIA vs SELECT ASIAN COUNTRIES
Country

An increase in
consumption by
one kg per capita
will lead to an
increase in
demand in excess
of 1 million tons.

Per Capita
Consumption
(Kg)

China

42

Indonesia

22

India

6.5

Thailand

51

Malaysia

106

Philippines

16

Vietnam

14
Source: Paperloop

Indias
Indias Low Per Capita Consumption offers a huge opportunity for
consumption growth
13

PER CAPITA CONSUMPTION Corrugated Board

Other key sectors
INDIA vs SELECT ASIAN COUNTRIES
Country

An increase in
consumption by
one kg per capita
will lead to an
increase in
demand in excess
of 1.2 million
tons.

Trends in Per Capita Corrugated Production in SE Asia and

- 2005 and 2010
2005
2010
Population

Corr.
Prodn.

Per Cap.
Corr. Prod.

Popn

Corr.
Prodn.

Per Cap.
Corr. Prod.

Mn

Msm

Sq M

Mn

Msm

Sq M

India

1093.6

3900

1184.1

6968

China

1275.6

25536

20

1310

35107

26.8

228.9

2172

243.0

2555

11

24.0

1176

49

26.1

1336

51

162.4

301

179.6

416

87.9

1131

13

95.9

1443

15

4.4

257

58

4.7

238

51

64.2

2593

40

66.3

3121

47

Indonesia
Malaysia
Pakistan
Philippines
Singapore
Thailand

Source: ICCA

Indias
Indias Low Per Capita Consumption offers a huge opportunity for
consumption growth
14

Indian Corrugated Industry in relation to Rest

Country
1USA
2China
3Japan
4Germany
5Italy
6France
7Spain
8UK
9Brazil
10India
11Canada
12SouthKorea
13Mexico
14Thailand
15Russia
Others
46+Total

Top15Countries2005byAreaofOutput
Production

ForecastGrowth05-10
2005
Msm
Tonnes
Msm
Tonnes %p.a.
39991
27157
2667
1811
1.3
25536
18598
16178
9571
10.3
13729
8770
473
206
0.7
7923
4051
672
237
1.6
6448
3829
851
471
2.5
5707
2967
397
165
1.4
4667
2645
789
368
3.2
4324
2261
92
-64
0.4
4005
2157
655
243
3.1
3900
2535
3068
1995
12.3
3485
1884
70
2
0.4
3157
1834
684
288
4.0
2922
1893
564
346
3.6
2593
1669
528
241
8.6
2351
1322
1113
586
8.1
35202
20504
7875
3863
4.1
163589
102755
35565
19743
4.0
15

INDIAN CORRUGATED PACKAGING INDUSTRY

A PARADIGM SHIFT

High
High Growth
Growth Economy
Economy
Increasing Spend on
Education
Education

Enormous
Domestic
Market
potential

Access to
International
Financing

IT Revolution
Growing Consumerism
Consumerism

Move towards
Organized
Organized Retailing
Retailing
Move Towards Scale
Scale of
of
Production
Production
Industry Consolidation
Consolidation

Large Pool
of
Technical
16
Personnel

Competiti
ve
Manpower
Cost

pportunities

Corrugated Packagin

Exports of
Boxes

CHALLENGES FOR THE INDIAN CORRUGATED

INDUSTRY
Lack
Lack of
of
Contemporar
Contemporar
yy Technology
Technology
Fragmented
Production
Operations
Operations
Customer
Customer
Emphasis on
on
HACCP /
ISO2200
ISO2200
VAT
VAT
GST
Impact
Impact on
on
Business

Scarcity
Scarcity of
Virgin
Virgin Fibre
(Wood
(Wood Pulp)

High Energy
Cost

Management
Management
of
of
Environment
al Issues

The
The biggest
biggest Industry
Industry Challenge
Challenge is
is to
to Significantly
Significantly raise
raise the
the Per
Per
Capita Consumption
of Paper17in India

INDUSTRY FOCUS
Fundamental
Fundamental Transformation
Transformation in
in Investment
Investment
Strategies of Leading Industry Players led
by Market Demand & Competitiveness
issues
issues (Quality
(Quality &
& Costs)
Costs)
From
From Fragmented
Fragmented Production to Scale
Scale with
with
Contemporary
Contemporary Technology
Technology
From
From Manufacturing
Manufacturing mind-set
mind-set to
to Customer
Customer
Centric
Centric
From
From Commodity
Commodity to Branding
Large Scale Modernisation at user end- both
in Printing
Printing &
& Packaging
Packaging
Focus
Focus on
on Value-Added
Value-Added Products
Products
Increasing Retail
Retail consumption
consumption of
of Branded
Branded
18

19