SUMMER TRAINING PROJECT(FIRST PROGRESS REPORT)

MARKETING STRATEGIES
OF
BILT
UNDERTAKEN AT
“ BILT”

Submitted in the partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the Supervision

Submitted by
and Guidance of MBA
3RD Semester
Mr. Ajai Pal Sharma Govind Singh

(06917003909)

SESSION: 2010 - 2011

TECNIA INSTITUTE OF ADVANCED STUDIES

(Approved by AICTE, Ministry of HRD, Govt. of India)
Affiliated To Guru Gobind Singh Indraprastha University, Delhi
INSTITUTIONAL AREA, MADHUBAN CHOWK, ROHINI, DELHI- 110085
E-Mail: director.tecniaindia@gmail.com, Website:
www.tecniaindia.org
 Fax No: 27555120, Tel: 27555121-24

CHAPTER-1: COMPANY PROFILE AND FUNCTIONAL

ANALYSIS

BALLARPUR INDUSTRIES LIMITED

- A MULTINATIONAL COMPANY.

HEAD OFFICE:

THAPAR HOUSE, 124, JANPATH, NEW DELHI – 110001

PH: 011 – 41699283, 41699370

REGIONAL OFFICE:

CG HOUSE, 4TH FLOOR, Dr. A.B ROAD, WORLI,

MUMBAI – 400025

COMPANY’S REGISTERED OFFICE ADDRESS:

Ballarpur Industries Limited

P.O. Ballarpur Paper Mills - 442 901
Distt. Chandrapur, Maharashtra

PLANT LOCATIONS:

UNIT BALLARPUR
P.O. Ballarpur Paper Mills–442 901
Distt. Chandrapur, Maharashtra

UNIT KAMALAPURAM
Township - 506 172, Distt. Warangal,
Andhra Pradesh

UNIT SEWA
Gaganpur, P.O. Jeypore Railway Station,
Distt. Koraput - 764 002, Orissa

UNIT SHREE GOPAL

P.O. Yamunanagar, Distt. Yamunanagar,
Haryana - 135 001
UNIT BHIGWAN
105 Milestones, Pune-Solapur Highway,
Bhadalwadi - Paundhwadi,
Near Bhigwan Taluka, Indapur,
Distt. Pune - 413105

UNIT ASHTI
P.O. Ashti - 442707, Tehsil Chamorshi,
Distt. Gadchiroli, Maharashtra

EMAIL ADDRESS: www.bilt.com

www.biltpaper.com

GEOGRAPHICAL AREAS

REGIONS NORTH SOUTH WEST EAST

Delhi Chennai Mumbai Calcutta
Ludhiana Sivakasi Ahmadabad Cuttack
Amritsar Tirupur Jabalpur Raipur
Chandigarh Bangalore Goa Patna
Patiala Hyderabad Pune Bhagalpur

AREAS Kanpur Kochi Nagpur Nepal

Lucknow Kerala Nashik Guwahati
Meerut Coimbatore Aurangabad Ranchi
Agra Madurai Indore
Varanasi Secunderabad Surat
Paharanpur Vijaywada Kolhapur
Moradabad Vishakhapatnam
Jammu
Rohtak Ernakulam
Jamunanagar Pondicherry
Hubli
NATURE OF THE ORGANISATION AND BUSINESS:-
It is a manufacturing organization in which raw material in the various forms is converted
into final products.

TYPE OF INDUSTRY & BUSINESS:-

It comes under secondary sector and it is a major player in paper industry in India.

MARKETING ANALYSIS
BILT, in the recent years has evolved as a more dynamic, knowledge-driven organization
with a singular focus on creating stakeholder value. Aimed at making the organization
more market-oriented and customer-centric, the following initiatives are to drive BILT
forward in the rapidly changing business environment:

Brand Building
Increasing brand involvement for the products amongst customers to reduce market
fragmentation and attain 'generic-brand' status for BILT via strategic branding.

De-commoditisation and service orientation

Redefining the paper industry with customer at the center-stage.

Wider product range

Adding high value-added products to BILT's portfolio expanding it to cover the widest
range of basic to high-end usage paper products.

Product-mix rationalization
Maintaining an intelligent product-mix based on value and demand curves to maximize
returns
Exploring global markets
Reaching out to international markets with world-class products while maintaining
leadership in India

Captive Market Share

Sustaining and strengthening BILT's leadership position in its market segments way
ahead of competitors.

Extending 'Touch-Points'
Building a wider and 'intelligent' distribution network that enables BILT to serve its
markets in a customized and localized manner and attain higher penetration, without
losing the economies of scale.

Physical Proximity
Company’s distribution network and understanding of local requirements is unmatched in
the Indian paper industry. Over the decades, BILT has transitioned from the 'metro'
concept to cross country distribution. While Company’s five manufacturing facilities
for paper and pulp are strategically spread across the country, we have assiduously
brought our products within physical proximity of the customers. Company’s network of
126 dealers - the largest within the industry in India - is present across the principal
consuming centers of the country and is the key fulcrum to this proximity.
As the leader in the Indian paper industry, BILT stands for certain fundamentals.
Some of these are performance led growth, proactively seizing opportunities. The
company has always thrived on a high utilisation of quality production assets,
implementation of cutting-edge technologies, a captive raw material base, flexi-
manufacturing as well as a continuous expansion in capacity through intelligent de-
bottlenecking.
In its attempt to stay ahead in the competition, the Company has been shifting
towards being a marketing – led organisation, under which they have taken several
progressive measures aimed at creating a brand synonymous with consistent quality
and convenient proximity to the customer. To achieve this, the Company has adopted
a four-pronged sales & marketing approach that includes Distribution, Customer
Focus, Branding and Exports.
The Company is taking innovative steps in all the aspects related to its products,
starting from R&D to Distribution.
Market Leader:
Ballarpur Industries Limited is the market leader in the Indian paper industry, with over
50% of coated wood free grade rolling out of its plant. The company enjoys near
monopoly in Bond Paper market and nearly 45% share of the hi-bright Maplitho market
in India.

Backward Integration:
BILT is planning to become a fully integrated paper player in the industry. For that BILT
has entered into 10 year contract with the Maharashtra government for ensuring cheap
and regular supply of Bamboo. The company has also initiated farm forestry for cheaper
raw materials and has cornered Indonesia and Malaysia for this activity due to its
strategic geographic location.
BILT is also involved into Farm Forestry for planting of tree species that are suitable for
industrial wood. BILT is currently operating its farm forestry programs in the states of
Orissa, Chhattisgarh, Andhra Pradesh and Maharashtra.
Capacity Expansion;
The company has nearly doubled its production capacity to over 1 million ton per annum.
It has taken aggressive steps to penetrate the market with new capacity. With the increase
in paper prices, company is placed well to encash on the increased capacity, which will
now come into play.
Value Unlocking:
The group company Avantha Power has filled DRHP for an Initial public offer for Rs
12500mn, BILT owned 5% in the company, going forward we expect the company to get
more value among the peers. BILT is also planning to get its Sabah’s Dutch Holding
company listed in overseas market, which will enable them to raise money from overseas
markets at a comparatively low cost. The company has 80% stake in Sabah Forest
Industries. It is the Malaysia’s largest pulp and paper mill.

FINANCIAL ANALYSIS
Financial highlights of year 1st July, 2008 to 30th June, 2009
Total Income
Decreased by 0.3 per cent from Rs. 2,847 crore in 2007-08 to Rs. 2,838 crore in 2008-09.

Paper Revenue
Increased by 9.3 per cent from Rs. 2,425 crore in 2007-08 to Rs. 2,651 crore in 2008-09.

Domestic Paper Revenue

Increased by 13.5 per cent from Rs. 1,992 crore in 2007-08 to Rs 2,260 crore in 2008-09.

Operating Profit (PBDIT)

Decreased by 8.3 per cent from Rs. 715 crore in 2007-08 to Rs. 656 crore in 2008-09.

HUMAN RESOURCE ANALYSIS

HR played a key role of strategic influencer, and in alignment with business goals,
delivered on numerous initiatives. The Performance Management process was given
additional focus with an aim to increase productivity, to ensure that employees stretch
their potential and to build on a culture of continuous improvement. At BILT , it believe
that employees engagement with higher expectations leads to maximum contributions.
The web-based tool aligning individual and company goals has given exemplary results.
Acquisition and retention of talent continues to be a major thrust area and several
business leaders are engaged in the process of hiring, training, developing and retaining
key resources. As a regular practice, BILT visits various reputed colleges and
universities for campus recruitments. BILT recruited over 40 Management Trainees and
GETs directly from campuses. The business expansion is being supported by a
commensurate organisational growth at BILT and consequently it is engendering exciting
new opportunities for employees —creating the atmosphere to embrace change and
advancement.

LOGISTIC ANALYSIS
In order to become a globally competitive company, BILT has adopted the Total Quality
Management or TQM framework to continuously benchmark its processes against the
best in the world. BILT's TQM initiative has already started bearing results.
A culture of cross-functional, cross unit teamwork has been inculcated, which has
significantly increased efficiency. A scientific problem solving methodology has been
implemented across all functions. Process owners have been identified and positioned
across all the units. They, in turn, have created their own cross-discipline teams. This has
ensured on-going process up-gradation and continuity. Integration of cross-functional
disciplines like production and marketing has led to the development of more relevant
and more cost effective products.Constant monitoring at the shop floor level has led to
valuable learning on how to raise productivity and quality.India consumes about one-
sixth of the world average of 30 kgs of paper per capita, a figure that is likely to change
manifold due to the visible changes taking place in the Indian market context and
demographic dynamics. In addition, rising input prices will have to be matched with a
corresponding increase in realisations for the industry to maintain a competitive
advantage. In its attempt to reduce the cost of sourcing, the Company has initiated Farm
Forestry Program, which currently has approx. 21,900 hectares of land under plantation
in the captive areas of manufacturing locations. As per the projections made by Coal
India, the domestic demand supply gap of coal for the year 2001-12 would be around 95
million tones. Also, quality of coal is the issue for India. To reduce the impact of this
risk, the Company has started importing coal of higher quality leading to more cost
effectiveness.

INFORMATION

VISION
To become a leading creator of Shareholder Value in the Paper Industry and to
consistently outperform expectations and deliver superior value to both our Customers
and Stakeholders

MISSION

We will energise our people, with a positive culture that rewards innovation, breeds
initiatives and encourages intelligent risk taking and we will use the energy of our people,
develop and implement leading edge technologies and draw on both to deliver effective
world-class solutions to our customers

CORE VALUES

Honesty
To be principled, straight-forward and fair in all dealings

Integrity
Maintaining the highest standards of professionalism.

Flexibility
Adapting ourselves to always stay a step ahead of change.

Respect for individual

Giving each person room to contribute and grow

Respect for knowledge

To acquire and apply leading edge expertise in all aspects of our business

Team performance
The team comes first; none of us is as good as all of us!
PRODUCT RANGE

Coated Wood Art Paper

Art Paper C2S
• Bilt Emperor Art Paper C2s
• Bilt Royal Art Paper C2s

Art Paper C1s

• Bilt Emperor Art Paper C1s
• Bilt Royal Art Paper C1s

Black Centered Board

• Sunlit Coated Art Board

Uncoated Woodfree
Hi-Brights
• Sunshine Super Printing
• Ta Maplitho Nsd Premium
• Ss Maplitho
• Sunshine Reprographic Printing
• Bilt Royal Print Plus
• Sunshine Envelop Printing

Creamwove
• Easy Print
• Ss Maplitho Nss (Ashti)
• Ta Creamwove

Coloured Printing
• Ta Coloured Printing
Duplicating Paper
• Ta Duplicating White

Business Stationery
Bonds
• Bilt Royal Executive Bond (Parent Sheets)
• Bilt Royal Executive Bond (Retail Packs)
• Sunlit Bond
• Super Lucky Criss Cross

Parchment
• Lucky Parchment

Bilt Matrix
• Bilt Matrix Premium Note-Pads
• Bilt Matrix 5 Subjects Note-Pads
• Bilt Matrix Writing Pads
• Bilt Matrix Conference Pads
• Bilt Matrix Executive Pads
• Bilt Matrix Office Pads
• Bilt Matrix Premium Multi-Purpose Paper

Copy Paper
Premium Copy Paper
• Bilt Copy Power

Economy Copy Paper

• Bilt Image Copier
Packaging Paper
Kraft Paper
• Eskp
• Mfk

Multiwall Paper Bags

• Biltpak

Speciality And Fine

Ivory Board
• Super Lucky Ivory Board

Cartridge
• Sunshine Super Cartridge

Ledger
• Ta Azuerlaid Ledger

Industrial Grades

Posters

• Ta White Poster
• White Poster Td Loaded 4%
• Ar Grade Poster
• Acid Free Poster

Electrical Grade
 • Bilt Tertrans Transformer
• Bilt Elektra

Laminate Grade

• Print Base
• Barrier Paper
• Bleached Absorbent Kraft
• Coloured Base (Bluish Grey,Dark Ivory,Ss Grey,Dark Grey,Slate Grey,Signal
Red,Bfl Red,Violet Base,Teak Base,Gold Rust)

Base Paper For Carbon

• Cta

SIZE OF ORGANISATION.

Area: Over 1.7 million square metres

No of Employees – 5000 & above
Turnover in Crs – 8798.2 million(on 31st December 2009)

ORGANISATION STRUCTURE OF THE COMPANY.

CHAIRMAN
↓
VICE PRESIDENT
↓
DY. GENERAL MANAGER
↓
GENERAL MANAGER
↓
DY. MANAGER
↓
MANAGER
↓
ASSISTANT MANAGER
 ↓
EXECUTIVES
↓
SUPERVISORS
↓
WORKERS

MARKET SHARE & POSITION OF THE COMPANY IN THE INDUSTRY

The Company has consciously focused on establishing a leadership position in the high
growth product segments to leverage the opportunities expected from a rapidly growing
domestic economy, as well as a demanding international environment.
The Company has the highest annual installed capacity in India – around 4,51,000 tonnes
of pulp and paper. The market share of BILT on an average is about 14%. In the coated
paper segment, the share is 65 %, bond paper 40 % and copier paper 15 %. Company is
the only producer of Coated paper and boards through state-of-the-art Blade Coated
technology.
Due to its superior quality and the shifting consumer preference for world-class
products, the demand for these blade-coated products has been growing at over 20% for
last 2 years.
BIlt operates primarily in this growing market space. Its principal market is India and it
also caters directly to the Malaysian and South east asian markets through its
international subsidiary, SFI. It also exports to other parts of the world including the
matured markets but this is still a small share of its market portfolio.
In terms of size, India is the 15th largest paper consumer in the world. But in terms of
growth, it is one of the fastest growing markets. With an annual growth rate of 6.5 per
cent over 2008-09, the total paper consumption in India is close to 8.6 million MTPA .
The market size is expected to double by 2015 and increase to 20 million MT by 2020.

LEADERSHIP IN THE COMPANY

Company has nine-member Board of Directors.

Mr. Gautam Thapar (Executive and Promoter Director).
Mr. R. R. Vederah (Managing Director) and
Mr. B. Hariharan (Group Director - Finance).
Mr A P Singh – Nominee of LIC
Mr R K Ahooja
Mr Sanjay Labroo
Mr A S Dulat
Dr Pramath Raj Sinha
Mr Ashish Guha

CHAPTER -2: Job Specific analysis

Report on working of comapny

I have been told to make a project report on the working of the company with the help of
studying 4 P’s of marketing in detail. The project report is the main criterion of
performance in the company by me. The main task of trainees in the company is to
anlyze the marketing strategies of the company with the help of primary and secondary
data. With the help of interaction with various dealers and customers, the marketing
strategies adopted by the company are analyzed.
CHAPTER – I RESEARCH PROBLEM AND PURPOSE

INTRODUCTION
Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable
competitive advantage. A marketing strategy should be centered on the key concept that
customer satisfaction is the main goal. A marketing strategy combines product
development, promotion, distribution, pricing, relationship management and other
elements; identifies the firm's marketing goals, and explains how they will be achieved,
ideally within a stated time frame. Marketing strategy determines the choice of target
market segments, positioning, marketing mix, and allocation of resources. Marketing
strategy determines the:
 Market segmentation
 choice of target market segments
 positioning
 marketing mix,
 Allocation of resources.
Marketing strategy is a method of focusing an organization's energies and resources on a
course of action which can lead to increased sales and dominance of a targeted market
niche. It is most effective when it is an integral component of overall firm strategy,
defining how the organization will successfully engage customers, prospects, and
competitors in the market arena. Corporate strategies, corporate missions, and corporate
goals. As the customer constitutes the source of a company's revenue, marketing strategy
is closely linked with sales. A key component of marketing strategy is often to keep
marketing in line with a company's overarching mission statement. A marketing strategy
can serve as the foundation of a marketing plan. A marketing plan contains a set of
specific actions required to successfully implement a marketing strategy. For example:
"Use a low cost product to attract consumers. Once our organization, via our low cost
product, has established a relationship with consumers, our organization will sell
additional, higher-margin products and services that enhance the consumer's interaction
with the low-cost product or service." A strategy consists of a well thought out series of
tactics to make a marketing plan more effective. Marketing strategies serve as the
fundamental underpinning of marketing plans designed to fill market needs and reach
marketing objectives.

• Strategies based on market dominance - In this scheme, firms are classified

based on their market share or dominance of an industry. Typically there are four
types of market dominance strategies:
o Leader
o Challenger
o Follower
o Nicher
• Porter generic strategies - strategy on the dimensions of strategic scope and
strategic strength. Strategic scope refers to the market penetration while strategic
strength refers to the firm’s sustainable competitive advantage. The generic
strategy framework (porter 1984) comprises two alternatives each with two
alternative scopes. These are Differentiation and low-cost leadership each with a
dimension of Focus-broad or narrow.
o Product differentiation (broad)
o Cost leadership (broad)
o Market segmentation (narrow)
• Innovation strategies - This deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on
the cutting edge of technology and business innovation. There are three types:
o Pioneers
o Close followers
o Late followers
• Growth strategies - In this scheme we ask the question, “How should the firm
grow?” There are a number of different ways of answering that question, but the
most common gives four answers:
o Horizontal integration
o Vertical integration
 o Diversification
o Intensification

"BILT is India's largest paper company with gross sales of 2368.8 crores and the only
Indian company to rank amongst the top 100 paper companies in the world"

Ballarpur Industries Limited (BILT), part of the US$ 3 Billion Avantha Group, is the
undisputed leader of the Indian paper industry. It is India's largest manufacturer and
exporter of paper, with a strong presence in all segments of the usage spectrum, including
writing and printing (W&P) paper, industrial paper and speciality paper. Complementing
this is a diversified production infrastructure with six manufacturing units spread across
the country.

BILT has evolved as a dynamic, knowledge-driven organization focused towards

creation of stakeholder value. In the process, it has also transformed the paper industry
from its traditional 'commodity market' mindset to a branded one. A concerted
programme of innovation and technological excellence helps it proactively respond to the
needs of each individual segment. Today, BILT not only has the range, but also a well
entrenched distribution network that enables it to reach customers, any time, any place.

PROBLEM STATEMENT

Bilt is by far the largest paper manufacturing company in India. The present research
would identify whether Bilt will be able to maintain its position at top through its
marketing strategies. Instead of using simple promotional techniques, the company
maintain its top position in the paper industry. In today time, the awareness of consumer
is increasing and the competition has become severe. There are various players in the
market which give neck to neck competition to the company so main problem which lies
in this company is “To maintain the top position in the industry.”

OBJECTIVE
1. To analyze the marketing strategies of Bilt in terms of Product, Price, Place,
Promotion and Packaging.
 2. To identify the competitive advantage of Bilt in the Paper industry in terms of
a. Promotional activities
b. Brand value
c. Customer perception
d. Brand offerings

3. To do SWOT and PEST analysis of the company related to marketing aspects.

4. To study the 4 p’s of the company in detail.

SCOPE
Functional Area -Marketing
Time of Study - Last 3 years marketing strategies
Geographical Area- Employees from company premises.
Dealers from NCR.

Focus of the study:

Bilt is the largest paper manufacturing company in India but its marketing strategies is
somewhat different in comparison to other companies who promote their product in such
a way that they can cover large segment of population through advertisement in
Television, Radio etc but Bilt uses some other strategy to attract its target audience, focus
of the study is on the marketing techniques used by the Bilt to reach its target customers.

Relevance of the study:

Relevance of the study lies in the fact that even with other promotion methods and
different marketing techniques other than advertisement in Television, Radio, Newspaper
etc. company can still be at the top in their area of business.
CHAPTER - II REVIEW OF LITERATURE:
With the help of various books, journals and internet, the review of concepts and theories
and review of previous research finding is taken place.
Some previous research on marketing strategies is also studied.
Some book are also reviewed of “Marketing Management” to clear concepts and theories.
A Case study is properly reviewed here which is:

BALLARPUR INDUSTRIES LTD.: ALIGNING MARKETING STRATEGY

IN A TURBULENT ENVIRONMENT

Ballarpur Industries Ltd. (BILT) is the leader in the fragmented Indian writing and
printing paper industry, with Rs.21.5 billion sales turnover and approximately 20 %
market share. BILT Did not have any focused marketing strategy nor a marketing
team and was interested only in pushing the stocks out of its plants prior to 1999. In
1999, the new Vice Chairman and Managing Director (VC & MD) appointed a
Marketing Head whose task was to turn the production oriented firm into a market
oriented firm as a proactive measure to develop competitive advantage before the
competition heats up.
During the period from 1999-2003, he set up a marketing team of seventy people,
designed and implemented necessary systems and procedures for improved service
delivery, undertook efforts in mapping the consumer and end user markets, invested in
branding BILT and its products and strengthened the distribution network to connect
better with its consumers and end users. In 2003, the V.C & MD was considering three
long term strategic options for BILT (i) develop BILT as a national writing and printing
paper distribution company (ii) forward integrate into printing (iii) continue the
traditional growth model. The V.P Marketing now finds it necessary to evaluate the
impact of the marketing initiatives made during 1999-2003, recommend the appropriate
strategic option and formulate marketing strategy for that can best leverage BILT’s
marketing strengths and help develop sustainable competitive advantage.
A marketing strategy combines product development, promotion, distribution, pricing,
relationship management and other elements; identifies the firm's marketing goals, and
explains how they will be achieved, ideally within a stated time frame.

Previous Research

CHAPTER - III CURRENT SCENARIO

The paper industry in India is more than a century old. At present there are over 600
paper mills manufacturing a wide variety of items required by the consumers.

These paper mills are manufacturing industrial grades, cultural grades and other
specialty papers. The paper industry in India could be classified into 3 categories
according to the raw material consumed.

1. Wood based
2. Agro based &
3. Waste paper based
While the number of wood based mills are around 20 and balance 580 mills are based on
non-conventional raw materials.

The Govt. of India has relaxed the rules and regulations and also delicensed the paper
industry to encourage investment into this sector and joint venture are allowed and some
of the joint ventures have also started in India. The paper industry in India is looking for
state-of-art technologies to reduce its production cost and to upgrade the technology to
meet the international standards.

It is estimated that the paper industry would be growing at the present rate of 7-8% of
compounded rate and would require 9.5-10 million MT by the end of the decade from the
existing production of around 6.7 million tonnes.

Paper industry in India is the 15th largest paper industry in the world. It provides
employment to nearly 1.5 million people and contributes Rs 25 billion to the
government's kitty. The government regards the paper industry as one of the 35 high
priority industries of the country.

The Indian Paper manufacturing Industry, which is highly power and capital intensive, is
broadly divided into paper, paperboards, and newsprint. Increased consumer spending
and improvement in conversion technology is expected to be the growth drivers for this
industry. The literacy level in India which is on the increase is further set to improve the
demand for paper. Indian Government’s policy for reducing the peak import tariffs for
paper each year, and pursuing the policy of actively entering into Regional Trade
Agreements (RTA) with ASEAN countries has further set up the momentum for growth
in this industry. These agreements along with further reduction in import duties are
expected to boost the demand for paper in the coming years.

India is the second most populous country in the world however, the per capita paper
consumption is among the lowest at 4.5 kg, while South Asian and global averages are 24
pounds and 117 pounds respectively. But the demand for paper is increasing given the
rising disposable incomes particularly of the expanding middle income group. The
literacy level in India which is on the increase is further set to improve the demand for
paper in the future. The Government of India’s increased budget allocation for education
sector is expected to further improve the literacy rates in both urban and rural areas,
resulting in increased demand for writing paper. Given the billion plus Indian population,
per capita increase in consumption will significantly increase the demand by one million
tons per year.

The healthy growth in the paper industry was driven by a strong growth in the economy,
increasing sophistication of the Indian consumer, and the emergence of packaging as a
key driver of product differentiation. Amongst the various sub segments value added
paperboards segment catering primarily to the packaging needs of the pharmaceuticals,
personal products and foods sectors, continued to grow at a substantially faster pace of 20
percent. The domestic newsprint market is likely to be bullish throughout 2006 in
anticipation of strong buying support from the newsprint consuming sectors. Both
English and vernacular newspapers are expanding the circulation leading to an increased
demand for paper

Indian manufacturers are upgrading their manufacturing technologies to remain

competitive and to retain their market share in the country. Many Indian firms have
started exporting their products to other countries as well. This export-led growth and
exposure to international products have forced the Indian firms to change product
packaging. These firms have started improving the printing and packaging of their
products to retain the product appeal among the customers both in Indian and abroad.

The Indian import of paper is expected to continue for the next five years and beyond to
meet the expanding local demand. Indian firms also import pulp from other countries.
The Indian paper manufacturers have started facing serious challenges. The major threat
faced by many Indian paper manufacturers is the shortage of quality raw material at
globally competitive rates. Noticeably due to the restricted availability of wood and
thereby pulp, prices have risen significantly which has affected the paper manufacturers.
Importantly for the paper companies pulp and energy are the two main components of
product cost. The supply situation is expected to remain tight in the coming time as well.
Another cause for concern is the consistent denial of permission by the central
government to allow paper manufacturers the development of degraded forestland, which
would enable them to source quality raw material at reasonable prices.

Major Players

 Andhra Pradesh Paper Mill Ltd

 Ballarpur Industries Ltd.
 ITC Limited
 JK Paper Ltd.
 Pulp Mills (CPM)
 Pudumjee Pulp & Paper Mills Limited (PUDUMJEE)
 Seshasayee Paper and Boards Limited (SPB)
 Tamil Nadu Newsprint and Papers Ltd.
 The West Coast Paper Mills Ltd.

Customers

End users of paper are both industrial and individuals. The Indian pharmaceutical
industry, Indian consumer products industry sector, processed food industry segment, are
the major end users of papers for packaging their products. Schools, colleges, offices are
also major end users of paper. Book publishing firms, print media and newspaper
publishers are another major industrial end users of paper. The expanding printing and
packaging sectors are the intermediate end users of paper.

BILT vs JK Paper Ltd.

The Rs 12,000 crore Indian paper industry is poised to see the clash of the titans in the
form of Ballarpur Industries Limited (BILT) versus JK Paper Ltd. The war-cry -‘building
brands’. While JK Paper is going to launch five branded products this year, BILT plans to
launch three to four branded products. Besides, both will focus on the key growth areas
including coated paper and branded copier paper. The strategy is also to climb the value
chain with specialised products.

JK Paper’s strategy is to increase the share of branded products in their stable from 35 per
cent to 50 per cent in the next two years. A key thrust area is the writing and printing
segment, which accounts for 37 per cent, in terms of volumes of the total paper industry.

The focus points within this segment are the branded copier segment which is growing at
10 to 15 per cent, coated paper growing at 9.5 per cent. Seen in comparison to the general
6 per cent growth in paper demand in the country, it is small wonder that the companies
are zeroing in on these focus areas.

The Rs 600 crore JK Paper has a multi-pronged approach. Says its vice president
(marketing & sales) Rajiv Sheopuri, “Our endeavour is to create new markets in paper.
The strategy is to span the paper industry in totality.” With this view, it is looking at
getting into coated paper as well as low quality paper, segments in which the company
does not have a presence. It is looking at outsourcing (either domestic or international) or
acquisition options to get into these categories within this year. BILT, on the other hand
has a market share of 53 per cent in the coated paper segment, while it is a major player
in the notebook paper category. JK Paper is also planning to rev up its activities in the
premium bond segment, where BILT’s Royal Executive Bond has a 62 per cent share. JK
paper is going to launch many value-added products including premium cheque paper.
The plans are to get into packaging paper which is a substitute for plastic.

BILT plans to double the volumes of its branded copier, Copy Power, in the next six to
nine months. JK Paper with its brands JK Copier and JK Easy Copier claims to be the
market leader in this category. BILT is also going to launch premium branded packaging
boards with graphic application soon — BILT Exelcia and BILT Oyster. Both the boards
are targeted at the high end cosmetics and garment companies. It also plans to launch
branded notepads and envelopes. Says Vice President (sales and marketing), BILT,
Yogesh Agarwal: “The idea is to identify the vacuum in the market and establish a
presence.”
Key Highlights:
• The Paper sector is in the midst of cyclical upswing driven by improved demand
and increase in the price of the products. BILT is the market leader in the Indian
paper industry and would be the key beneficiary from the positive outlook for the
sector.
• The improved performance of Bhigwan and Ballarpur plant will drive higher
volume and improved performance of the company.
• There is an expectation of increase in paper prices by 2000-2500 per ton; this will
further improve profitability of the company.
• Copiers and coated papers are the fastest growing segments, at an annualized rate
of 15-20 %, while high-quality packaging boards are growing at about 12%.
• The company is considering diversifying into manufacturing of container board
andcorrugated boxes, through brownfield expansion to cut on the acquisition
costs.