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This presentation covers certain aspect of B2B marketing. It focuses on the paper industry and we have found out the key application areas and selected a few of them and hence found the derived demand. We have also looked in as in how the performance of GDP and Retail sector affects paper industry and hence can make sense of the derived demand and in a very roughly manner the bullwhip effect.
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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