Market Research Report : Paper industry in india 2014 - Sample

Paper Industry – India
October 2014

2
PAPER INDUSTRY IN INDIA 2014.PPT
Executive Summary
Market
Overview
Drivers & Challenges
Competitive
Landscape
Indian paper industry is the fastest growing paper market in the world and its revenue is expected to touch INR x bn in 20--, growing at a CAGR of `xx% over 2013- --
The domestic demand for all varieties of paper is estimated at around y mn tonnes in 20-- - -- which is z% of global demand of aa mn tonnes
The industry provides employment opportunities to over ab mn people, mostly from the rural areas
Drivers:
Growth in Education Sector
Growth in Press Publications
Increased Demand for Packaging
Increased Toll Collection Operations
Challenges
High input costs
Increasing Internet Penetration
E-books Growth
Low rate of paper recycle
Key Players
Company A
Company B
Company C
Company D
Company E
Company F
Trends
Pulpwood Plantation Area Expansion – Major Players
Raw Material Import

3
•Macro Economic Indicators
•Introduction
•Market Overview
•Value Chain
•Import-Export
•Drivers & Challenges
•Role of Government
•Key Trends
•Recent Developments
•Product Launches
•Competitive Landscape
•Strategic Recommendation
•Appendix

4
SAMPLE
Demand for paper in India is expected to cross the 25mn
tonnes mark, by 2025
• India is the xth largest paper manufacturer in the world
with around x – y mills
• Currently, Paper demand in India is estimated to be
around ab mn tonnes
 Indian roughly accounts for aa% of the total global demand
of paper
• India’s paper consumption has grown at a steady rate
of around ab1% in the last five years
 It is expected to double by 20--, from the current level of x
mn tonne
 Per capita consumption of paper in India stands at y kg, as
against the global average of z kg, thereby leaving ample
scope for demand creation
• The tissue paper industry is emerging as a new sub
segment within the specialty paper market
 The organized tissue paper market is estimated to be valued
at INR xx bn in 20-- and is expected to grow at a CAGR of
ab% in next 3-5 years
• Domestic players are focusing on capacity expansion in
order to meet the increasing demand in the country
 Over the last five years, INR ab bn has been invested
towards capacity enhancement, technology up gradation and
acquisitions
Paper Industry – Overview Paper Demand – Growth
Paper Industry – Demand Share (FY 2014)
31%
5%
19%
45%
BB
AA
DD
CC
0
5
10
15
20
25 A
FY20--e
d
FY20--e
c
FY20--e
Mn Tonnes
b
FY20--
a

5
SAMPLE
Paper Production: Raw Material Share (2013) Paper Production: Mills Category (2013)
Paper Industry – Market Size (Turnover) Paper Industry – Production
Paper industry in India has immense potential for growth
despite increasing input costs
70.0%
30.0%
A1 A2
21.0%
44.0%
35.0%
X
B
A
DD1
CC1
BB1
AA1
0
Mn Tonnes
7.9%
2018e
a6
2017e
a5
2016e
a4
2015e
a3
2014e
a2
2013
a1
DD
CC
BB
AA
0
INR bn
8.9%
2018e
f
2017e
e
2016e
d
2015e
c
2014e
b
2013
a

6
SAMPLE
World Ranking: Paper Production (2012) World Ranking: Paper Consumption (2012)
Installed Capacity: State – Wise (2013) Installed Capacity: Region – Wise (2013)
5.0%
25.0%
70.0%
Group 3*
Group 2*
Group 1*
x1
x4
x3
x2
East
South
West
North
A
B
C
0
Mn MT
India
x6
Germany
x5
Japan
x4
USA
x3
China
x2
World
x1
D
C
B
A
0
Mn MT
India
x6
Germany
x5
Japan
x4
USA
x3
China
x2
World
x1
Paper Industry: Snapshot (2/2)
*: Group 1: XX Group 2: XX Group 3: XX

7
SAMPLE Writing and Printing paper demand is expected to grow at a
CAGR of around x% over 2013-18
Writing and Printing Paper Market – Overview Writing and Printing Paper: Demand
C
B
A
0
MTPA
XX
2018e
x6
2017e
x5
2016e
x4
2015e
x3
2014
x2
2013
x1
W&P Demand Share (2012-13) W&P Demand Share (2017-18)
X1
X2
A B
Y1
Y2
• Demand for Writing and Printing (W&P) paper is expected to
increase in the coming years owing to increased consumerism
and continued government spending on education
 Strong growth is expected in the copier, coated and maplitho
segments
• Within W&P, demand growth for copier paper is expected to
be the strongest at around x% CAGR during 2013-18
 Within copier paper, branded copier paper market in India is
estimated at INR aa mn in 2013 of which JK Paper Ltd. accounted for
x% market share
• Increase in office space absorption is expected to translate
into stronger demand for high-quality copier paper

8
SAMPLE
Comparative Analysis: Domestic Vs. International Market (1/2)
Paper Types
World
India
Production (2010)
Leading Manufacturers
Technologies Used
Production (2010)
No. of Mills
No. of Mills Using Advanced Technologies
Technology Status
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
Note: Information as of FY 2011

9
SAMPLE Export – Import: Paper Industry
Paper Import – Value Wise
Paper Export – Value Wise
E
D
C
B
A
0
INR bn
X
2013-2014
x4
2012-2013
x3
2011-2012
x2
2010-2011
x1
27.4%
9.0%
12.0% 14.6%
17.3%
19.7%
C6
C5
C4
C3
C2
C1
41.92%
7.19%
9.82%
10.81%
11.30%
18.96%
C6
C5
C4
C3
C2
C1
Note: HS Code 4802
Major Importing Nations – Value Wise (2013)
Major Exporting Nations – Value Wise (2013)
A4
A3
A2
A1
0
INR mn
y1
9.5%
2013-2014
y4
2012-2013
y3
2011-2012
y2
2010-2011

10
SAMPLE
India has the second largest education system in the world
Macro Overview of the Indian Education System
Literacy Rate in India Demographic Split in Education
Budget Allocation for Education Five Year Plan Outlay for Education
35%
65%
x y
26%
74%
2001 2011
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
x1 y1 z1 m1 n1 2015e
x y z m n 2010
15-24 25-34 35-44 45-54 55-64
Key Indicators
D
C
B
A
0
INR bn
X
2013-14
e
2012-13
d
2011-12
c
2010-11
b
2009-10
a
0
1,000
2,000
3,000
4,000
5,000
INR bn
XX A2
11th Five Year Plan 12th Five Year Plan
A1

11
SAMPLE
Growth in newspaper industry as well as other publications
is driving demand for paper
Growth in Press Publications Impact
Newsprint Demand
C
B
A
0
mn MT
X
2025e
e
2020e
d
2015e
c
2014
b
2012
a
49.0% 51.0%
A B
• Newspaper demand has been growing at an
average rate of x% during last 5 years
• Country’s xx% current demand is being met by
imports however a% demand is met by domestic
production
• Currently the newsprint manufacturing industry
consists of x mills and is a significant part of the
overall paper industry
• India’s Newsprint annual consumption for
newspaper publishers varies from xx MT per
annum to aa MT per annum
A3
A2
A1
0.0
INR bn
X
2015e
B
2013
A
Indian Printing Industry

12
SAMPLE
Increasing number of toll collection plazas will drive paper
demand in the country
• There are around x toll plazas across the country, where paper slips are issued at the time of
crossing the road while making the payment
 Total number of vehicles passing through x toll plazas is around xx mn vehicles per day and yy mn vehicles
per annum*
 The length of paper consumed at all the toll plazas is around xy mn square meters or xz mn KMs
• Government of India is also planning to add thousands of kms of road network across the
country with many more toll collection plazas/centers
Increased Toll Collection Operations Impact
Data: *Assuming that the number of vehicles passing through x toll plazas are at least xy% of total number of vehicles passing through Delhi-Gurgaon Border
Paper consumed by xx toll plazas on NH
Toll Name Tag Vehicle Slip Vehicle Total
Point 1 X X X
Point 2 X X X
Point 3 X X X
Total X X X
Subject Calculations
H1 X
H2 X
H3 X
H4 X
Considering the toll plazas of Delhi-Gurgaon Border, Kherkidaula Toll and Airport Toll, roughly ab vehicles / day pass
these facilities
 Out of x vehicles, y vehicles carry tags with them however remaining xx vehicles are provided paper slips

13
SAMPLE
Print Book Vs. E-Book
•Point 1
•Point 2
E-book
Print Book
Retail Price per
book
Paid to retailer
Royalty
payment to
author
INR a INR b
INR c1
INR d
INR a1 INR b1
INR c
INR d1
The publisher
receives ~ INR xx
per unit sold
The publisher
receives ~ INR x per
unit sold
Others
Note: ‘Others’ would include payments for shipping, warehousing and production under print books while for e-books,
it would cater to digital rights management, digital warehousing, production and distribution

14
SAMPLE
Domestic players are focusing on pulpwood cultivation area
expansion
Pulpwood Plantation Area Expansion – Major Players
• XX
• XX
• XX
• XX
• XX
• XX
F
E
D
C
B
A
0
hectares
X
FY 2013
a3
FY 2012
a2
FY 2011
a1
B
D
C
0
A
hectares
x1
FY 2013
b3
FY 2012
b2
FY 2011
b1 C
B
D
A
0
c1
hectares
x3
FY 2013
c3
FY 2012
c2
FY 2011
A B C
Pulpwood Cultivation Area Growth

15
Recent Developments: Top Players (1/6)
Ballarpur Industries Ltd. – Recent Developments
1.
XX
2.
XX
3.
XX
4.
XX
5.
XX
6.
XX
ITC Ltd. - PSPD – Recent Developments
1.
XX
2.
XX

16
SAMPLE
Waste Paper Collection Mechanism – Recovery Potential (1/2)
There is huge potential available for recovery of PC paper almost for every variety of paper
Paper Types
Potential Source
of Generation
Generation/
Consumption %
Waste Type
Collection Rate
Writing/ Printing
Copier Paper
XX
XX
XX
XX
XX
XX
XX
XX
Cream Wove
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
Note: Post Consumer recovered paper comprises paper, paperboard and fibrous material recovered from retail stores, offices and homes after these products have served their end user and papers separated from municipal solid waste
Pre Consumer recovered paper is paper and paperboard material from manufacturing and converting and finished paper from obsolete inventories

17
SAMPLE
Product Launches : Top Players (1/3)
Ballarpur Industries Ltd. – New Product Launches
1.
XX
2.
XX
3.
XX
4.
XX
5.
XX
6.
XX
7.
XX
8.
XX
ITC Ltd. – PSPD – New Product Launches
1.
XX
2.
XX
JK Paper Ltd. – New Product Launches
1.
XX

18
SAMPLE
Market Competition – Porter’s Five Forces Analysis
•XX
•XX
•XX
•XX
•XX
Bargaining Power of Suppliers
Threat of New Entrants
Competitive Rivalry
Bargaining Power of Buyers
Threat of Substitutes
Impact
XXXX
Impact
XXXX
Impact
XXXX
Impact
XXXX
Impact
XXXX

19
SAMPLE Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3)
Competitive Benchmarking (2/x)
C
B
A
0
%
Company C
y3
x3
Company B
y2
x2
Company A
y1
x1
Operating Margin Net Margin
• XX
• XX
• XX
• XX
• XX

20
SAMPLE Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (2/3)
Competitive Benchmarking (3/x)
B
A
0
%
Company C
y3
x3
Company B
y2
x2
Company A
y1
x1
Return on Equity Return on Capital Employed
0.0
B1
A1
Company C
z3
Company B
z2
Company A
z1
Current Ratio
• XX
• XX
• XX
• XX
• XX

21
SAMPLE
Public: Domestic Company – Company A (1/x)
Key People
Products and Services
Company Information
Offices and Centres – India
Corporate Address
XX
Tel No.
XX
Fax No.
XX
Website
XX
Year of Incorporation
XX
Ticker Symbol
XX
Stock Exchange
XX
Name
Designation
XX
Chairman
XX
Director
XX
Chief Financial Officer
XX
Gurgaon
Category
Products/Services
Paper and Paper board
XX
XX
XX
XX

22
SAMPLE
AAAAAA
AAAAA
AAAAA
AAAAA
Public: Domestic Company – Company A: XX (2/x)

23
SAMPLE Financial Snapshot Key Ratios
Financial Summary
• The company earned a net profit of INR 778.8 mn in FY 2013, as compared
to net profit of INR 1,230.9 mn in FY 2012
• The company reported total income of INR 49,246.1 mn in FY 2013,
registering an increase of 1.91% over FY 2012
• The company earned an operating margin of 8.52% in FY 2013, a decrease
of 0.56 percentage points over FY 2012
• The company reported current ratio of 0.59 in FY 2013, a decrease of
14.63% over FY 2012
Key Financial Performance Indicators
Indicators Value (30/07/2014)
Market Capitalization (INR mn) 11,176.7
Total Enterprise Value (INR mn) 68,473.7
EPS (INR) 1.04
PE Ratio (Abs) 16.44
Particulars
y-o-y change
(2013-12)
2013 2012 2011 2010
Profitability Ratios
Operating Margin -0.56 8.52% 9.08% 11.63% 13.15%
Net Margin -0.97 1.58% 2.55% 4.64% 5.13%
Profit Before Tax Margin -1.98 1.57% 3.54% 5.88% 7.27%
Return on Equity -0.80 1.82% 2.62% 6.26% 7.42%
Return on Capital Employed -0.60 5.33% 5.93% 8.46% 7.84%
Return on Working Capital 18.30 -26.23% -44.53% -117.38% 52.27%
Return on Assets -0.58 3.56% 4.13% 5.94% 6.34%
Return on Fixed Assets -1.13 4.94% 6.07% 9.30% 9.39%
Cost Ratios
Operating costs (% of Sales) 0.59 91.46% 90.87% 88.18% 86.73%
Administration costs (% of
Sales) 1.86 12.46% 10.60% 11.19% 10.01%
Interest costs (% of Sales) 2.38 7.03% 4.65% 7.06% 5.86%
Liquidity Ratios
Current Ratio -14.63% 0.59 0.69 0.83 1.63
Cash Ratio -23.31% 0.03 0.04 0.06 0.19
Leverage Ratios
Debt to Equity Ratio 50.19% 1.14 0.76 1.07 1.35
Debt to Capital Ratio 23.45% 0.53 0.43 0.52 0.58
Interest Coverage Ratio -38.11% 1.21 1.96 1.67 2.26
Efficiency Ratios
Fixed Asset Turnover -13.10% 0.58 0.66 0.79 0.71
Asset Turnover -8.06% 0.42 0.45 0.50 0.48
Current Asset Turnover -1.81% 2.11 2.15 2.03 1.53
Working Capital Turnover -37.05% -3.07 -4.88 -9.93 3.94
Capital Employed Turnover -7.79% 0.54 0.58 0.64 0.61
Improved Decline
Total Income Net Profit/Loss
45835.5 49246.1
38400.8
778.8
1,230.9
2,127.0
1,969.9
0
20000
40000
60000
0
1,000
2,000
3,000
INR mn INR mn
2012 2013
48320.0
2010 2011

24
SAMPLE Key Business Segments Key Geographic Segments
79% 78% 78% 77%
2% 2% 2% 8%
9% 9% 9%
0%
50%
100%
2013
3%
11%
2012
10%
2011
11%
2010
10%
78% 81% 82%
22% 19% 18%
100%
0%
50%
100%
2010 2011 2012 2013
Business Highlights
Description News
Overview •XX
Export
Presence •XX
India Overseas
Paper Products & Office Supplies
Pulp
Others
Paper

25
SAMPLE
•XX
•XX
•XX
•XX
T
O
W
S

26
SAMPLE
Strategic Recommendation (2/2)
•XX
Point 1
•XX
Point 2
•XX
Point 3
•XX
Point 4

27
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Paper Industry – India report is part of Netscribes’ Manufacturing Industry Series.
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Market Research Report : Paper industry in india 2014 - Sample