Panel P lDi Discussion i 2Supplier S li I Industry d t PerformanceStandardsandSpecifications

Mr.S N Venkataraman
VP Marketing ITC Limited : Paperboards & Specialty Papers Division

ContainerBoard&Corrugatedboxes TotalMarket&Growth
IndianKraftmarketUniverse~4millionTons(Crisilestimate ~3 3.5 5millionTons).Growingat7%to8% EstimatedMarketValue~Rs10,000Cr Morethan10,000corrugatorsacrossIndia Automaticcorrugatedboardmakingmachinespeggedat250 b toperating but ti at t~70%capacity it Corrugatedboxindustrygrowthis12%to15%

KraftPaper GSM&BFspread

180 gsm 9%

Others 13%

Duplex Others 4% 25BF 4% 5% 100 gsm 27% 24BF 8% 16BF 14% 20BF 21%

140 gsm 14%

150 gsm 15%

120 gsm 22%

18BF 15% 22BF 14% 14BF 15%

DemandsfromEndUsers
ExistingDemands
GSM&BFofLiner&Fluting TotalweightofBox BurstingStrengthofthebox 1or2colorprinting Objectiveisonlytounitize &contain g by yweight g Bought

E Emerging i D Demands d
RCT&SCTofliner&fluting Reductioninweightofbox (lightweighting) BoxCompressionStrength Multi M l icolor l printing i i Objectiveistoprotect& promoteatoptimumbox weight BoughtforValue

Corrugatedboxmakersresponsetothesedemands
EmergingDemands
RCT&SCTofliner&fluting ECToftheboard Reductioninweight g ofbox (lightweighting) BoxCompressionStrength Increasing demands on Kraft supplier to specify RCT & adhere to it consistently Reengineers box construction to achieve weight reduction while maintaining the same Box compression strength Focuses on flute formation & other conversion parameters in order d to achieve hi d i d ECT of desired f the board leading to required box compression strength Improved flexo printers for multi color printing without loss of flute height Attempts p to seek value for delivered quality ( aspires to bill on area)

Response

Multicolorprinting packagingthatnotonly protectsbutalsopromotes BoughtforValue

ImplicationsonKraftPaper
R Response
Increasing demands on Kraft supplier to specify RCT & adhere to it consistently Reengineer box construction to achieve weight reduction while g the same Box maintaining compression strength Focuses on flute formation & other conversion parameters in order d to t achieve hi d i d ECT of desired f the board leading to required box compression strength Improved flexo printers for multicolor printing without loss of flute height p to seek value for Attempts delivered quality ( aspires to bill on area)

Implications
Box manufacturers have started differentitating mills on the basis of response 1 A grade mills with consistent quality are preferred and fetch a premium while B grade mills are valued at 1624 BF and box makers live with the inconsistency in quality Reengineering and attendant strength demands are at time satisfied only through imports of low GSM, GSM high BF, high RCT material Runnability on automatic corrugators uniform GSM, , Caliper, p , Cobb,RCT, , , winding g quality and jointless reels White Top liners shift towards low gsm bleached/coated kraft liners from duplex b d boards Billing on Meterage

Trends
The move towards smaller containers required for shelf ready packaging and the displacement of regular slotted cases by trays and diecuts continues unabated resulting in marginal reductions in corrugated volumes. unabated, volumes There is a marked move from multiwall to singlewall constructions in emergent markets, as the quality of containerboard improves, with continued investment in new containerboard machines. Microflute continues to offer well above average prospects, despite the introduction of intermediate flute formations between B and Eflute. flute Substance weight reductions will result in a 5year yield improvement of 4.1% Demand for decorative print is influenced by the need for improved visual appeal at the PointofSale, with the growing adoption of Retail Ready Packaging (RRP). Decorative print processes account for 11% of total demand and will grow at roughly double the rate for corrugated as a whole.

Challenges
Market Environmental Operations p /Regulatory Renewability Fibre Fib Traceability Certification Emerging d demands d on consistencyand newerandhigher specifications p RCT,Uniform Moisture,Winding Controls Changing fiber composition and paper structure mix of virgin and recycled RawMaterial Techno Commerical Production T h l : Technology a) Fromsingle to multiwire, b) ) BetterMD:CD ratiosand c) Better formation Increasingscale ofinvestments Changingbilling modesfrom weightto meterage

Light W i hi Weighting while hil retaining overall strength

Varying mix and d quality li of f waste paper Cleanliness, contaminants Ashcontent

White top LifeCycle liners changing measures the function of the box from mere packing to promoting

Different typesof coatingsfrom clayto emulsions

Thank You