2. Initial Hypothesis
Objectives
About Prime Corp: A bulk chemical manufacturing company based out of Andhra
Pradesh with strong presence in Indian market since past 5 decades
Problem Statement
To develop a business plan to enter the
UPVC and CPVC pipes and fittings
market in the given 5 states. The aim is
to prepare a successful go-to-market
strategy by attaining the above
objectives
Approach
1. Industry Analysis
2. Market Entry Hypothesis Testing
3. Primary Research
4. Strategized Brand & Distribution
Strategy
5. Considering the same, anticipated the
market share & revenue
To achieve EBITDA of 17%-18% in FY28
Develop a Brand Strategy
Developing Sales & Distribution Model
Forecast potential Revenue (MS)
• As data was provided of the UPVC/CPVC markets, there was no need to look into
dependent industry
• As company financials were not provided, it was assumed that company has
capability to finance the manufacturing plant
• As only domestic market was the target, import markets were removed
Updated Hypothesis Tree*
* Appendix Slides
3. • ₹ 200bn+ Market Size
• Market share decreased by 6% in last 5
years
• Shifting from unorganized players to
organized
• The products have become commoditized,
leading to lower margins
Industry Analysis
Industry Size & Growth
The UPVC & CPVC pipes meet a significant portion of India’s
plastic pipes market demand, which is ~65% & ~16% resp.
In terms of growth, the UPVC & CVPC portfolio is pegged to
grow at an 8.5% CAGR & 16% CAGR resp. The key trends
which are shaping the industry are:
Industry - Tailwinds
The industry growth comes on the account of:
• Government spending on irrigation,
housing & WSS infra.
• Rising demand from the agriculture sector
• Replacement of ageing pipes
• Increasing construction demand
• Renewable energy Infrastructure
Govt. Schemes
AMRUT
PMKSY
PMAY
Sector consolidation
toward organized
players
Focus on high-
margin
products
Increasing
demand for
high-quality
pipes
Trends
Particulars Information
Market Size (₹ bn) ~400+
Top Players
Supreme, Astral, Finolex,
Ashirvad, Prince
Organized : Unorganized 67%:33%
Retail : Institutional Mix 75%:25%
Key Target Builder/Contractor/Plumber
New: Replacement demand (%) 65%:35%
Key Facts - UPVCs Key Facts - CPVCs
• ADD (Anti-Dumping Duty) on CPVC imports
• Enhanced and diversified product portfolio
• Educating consumers via ATL marketing
• ₹ 50bn+ Market Size
• Fastest growing segment & has surged
by 5-6% in last 5 years
• Majorly led by organized players
• Offers higher margins (16%-18%)
• 2 new plants with a combined capacity
of 130 KTPA upcoming
• Lower than allocated spending by
govt. on schemes
• Increased competitive intensity
among larger players
• Volatility in RM cost (~70% of
Revenue)
• Cheaper non-branded products
Industry - Headwinds
0
20
40
60
1
Industry Break-up by Application
Irrigation (50%) WSS & Plumbing (40%)
Sewerage (15%) Others (5%)
SOURCE: Sector Report (Indian Plastic Pipe Sector) | India Equity Research News; Sector Report (Plastic Pipes) | Prabhudas Lilladher
4. Industry Analysis
Competitor Analysis
Out of the 67% organized players, the top 5 players capture more than 40% market share and are on the rise, that is because of a strong foothold across
geography & improved visibility via ATL spending and distribution network streamlining.
Segment Capacity vs Demand
Segment Market size (Domestic vs Import)
UPVC ~₹200 bn 50:50
CPVC ~₹50 bn 95:5
0%
20%
40%
60%
80%
100%
UPVC CPVC
Domestic (%) vs Imports (%)
Mix
Domestic Capacity Imports
There is a substantial dependence on imports
for fulfilling UPVC & CPVC domestic demand,
which is ~₹100bn & ~₹45bn resp. This shows a
promising outlook to vertically integrate into
the value chain.
Consumer behaviour
Particulars Supreme Ashirvad Finolex Astral Prince
Mkt. share 10% 9% 7% 6% 5%
Mfg. Plants 8 2 3 7 7
Distributors 1368 1100 1000 850 1500
Touchpoints 35900 53000 21000 33000 46171
Ad Spending (Sales) 2-3% 2-3% 1-2% 3-4% 2-3%
Capacity in MT 5,09,000 2,00,000 3,70,000 2,57,946 2,59,000
Dominant
Presence
Residential Plumbing
& Irrigation
Residential
Plumbing
Agriculture Residential
Plumbing
1/3rd Agri, 2/3rd
Pluming +SWR
Rank North South East West Central
1 Price Quality Price Brand Price
2 Brand Brand Expert Quality Quality
3 Quality Price Quality Price Brand
4 Expert Expert Brand Expert Expert
The factors driving the purchasing decision of the end consumers are
ranked across the five regions & can be used to target the products there.
SOURCE: Sector Report (Indian Plastic Pipe Sector) | India Equity Research News; Sector Report (Plastic Pipes) | Prabhudas Lilladher
5. Hypothesis Testing – Market Attractiveness
CPVC UPVC
14.87%
14.50%
13.60%
13.83%
12.50%
13.00%
13.50%
14.00%
14.50%
15.00%
0
20
40
60
80
100
120
South West East & North
East
North and
Central
CPVC Pipes & Fittings Demand (KT)
FY23 FY28 CAGR
10.56% 10.65% 11.17%
13.07%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
0
100
200
300
400
South West East & North
East
North and
Central
UPVC Pipes & Fittings Demand (KT)
FY23 FY28 CAGR
2400
1500
1700
2600
0
500
1000
1500
2000
2500
3000
South West East & North
East
North and
Central
CPVC Pipes & Fittings FY28 (INR Crs)
2800 2500
3100
6000
0
1000
2000
3000
4000
5000
6000
7000
South West East & North
East
North and
Central
UPVC Pipes & Fittings FY28 (INR Crs)
Domestic Demand CAGR of 14.07% till FY18 Domestic Demand CAGR of 11.68% till FY18
Market potential od INR 8200 Crs in FY28 Market potential of INR 14400 Crs in FY28
Government Schemes
• Jal Jeevan Mission aims to facilitate
uniform water supply availability to
4378 urban local bodies with 2.86
crore in-house tap connections
• PMKSY under its ‘Har Khet Ko Pani’
micro-irrigation subsidy helps
farmers subsidizing the pipes, which
is applicable at retail shops in the
nation
• There are various State Sponsored
Schemes, for example - Tamil Nadu
Government subsidy on 50% cost or
Rs.15000 for water carrying pipes
up to 800m on all types of pipes as
per the requirement of the farmer.
Source: Scheme | Tamil Nadu Government Portal (tn.gov.in)
Overall, the market is attractive considering
the CAGR and the market potential and
push by various Central & State
Government schemes for urban and rural
housings and framing
6. Hypothesis Testing – Market Share
• Based on an interview, due to the implementation of GST & E-Way Bill, the price
d. So, difference between an organized & unorganized player has reduced. So,
consumers increasingly prefer branded products
• Like Finolex, Prime Corp (PC) is also into PVC Resins which can directly help save
costs. Savings can be leveraged to push our product through the distribution
channel and capture the market share
• Andhra-Pradesh (AP) is a blue ocean in terms of manufacturing of the pipes. As
PC is based out of AP it can with comparative ease help cater the State demand &
lower transportation costs in nearby states
• By strong focus on the irrigation customers through the distribution network in
rural India, there is a potential to capture the market share
25%
10%
63%
10%
31%
75%
90%
37%
90%
69%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Supreme Ashirvad Finolex Astral Prince
Irrigation : Residential Mix of
Competitors
Irrigation Residential
Finolex
Supreme
Ashirwad
Astral
Prince
Manufacturing Plants
of Competitors
33%
25%
42%
37%
28%
35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Top 5 Other Organized Unorganzied
Market Share of Organized Players
rises
FY15 FY20
7. Hypothesis Testing – Capabilities & Profitability
PVC and CPVC resin together contributes 70%-75% of the total cost. Since,
Prime Corp. will be sourcing their RM from their own plant. We expect a
significant reduction in RM costs to ~65% based on Annual report of Finolex
Finolex is taken here because they are the only player in
India with a PVC manufacturing plant as well as pipes
manufacturing.
Finolex is less volatile towards the fluctuations in PVC resins as compared to its competitors & hence, Prime Corp can have similar advantages
Raw Material (PVC) Sourcing
The cost of setting up a CPVC manufacturing unit with a capacity of 30,000
tonnes per annum (TPA) in India was estimated at Rs 190 crore (about
$25.5 million) in 2022. Assuming a Capacity of 30KT, appx cost will be 200
Cr. For current FY
Cost of CPVC Plant Setup
As Financial information of the firm is not given but as firm
is established since 50+ years, we are assuming that
financials are good.
CONCLUDING ALL HYPOTHESIS, THE FIRM SHOULD ENTER THE MARKET
8. Primary Research
• Front & side signage boards
visible from all sides of the
market
• Website & customer support
no. details mentioned on the
board
• The fast-selling and easy-to-
store SKUs are stacked in
sections.
• Maintained in the middle-front
to ensure visibility and quality
check by touch and feel.
• Quality standards, size, and UV
protection features mentioned
on the pipe.
• Exclusive partnership
with Finolex
• 15+ store-front photos
capturing Finolex
branded hoardings
• Good Reviews and
Reputation in the
market
• Finolex pipes & fittings
regional marketing
promotions through
distributor google search
PRE-VISIT: ONLINE SEARCH
Brand association with
building materials supplier
Online Product Listing
Effective Branding
Technical Specification
Stacking Pattern
DISTRIBUTOR VISIT
9. Primary Research
• Multiple
hoardings to
improve brand
visibility in MBO.
Parameter Distributors Retailers
Ownership • ~22 yrs. Industry exp.
• Exclusive distributor for
Finolex
• ~10-12 yrs. Industry exp.
• Multi Brand Outlet
Key Customers • Retail Outlets
• Contractors
• Direct Customers
• Contractors
• Direct Customers
Promotional
Campaign
• Store Hoardings
• Online product listing
• Product Samples/Demos.
• In-Store hoardings
• Plumbers’ Commission
Operational
model
• Lead Time: 10-15 days
• Selection of Retailers
• Transparency among channel
partners for the scheme
• Order Placed on portal
• Reverse supply provision not
there
• 2-3 days credit provision
• Lead Time: ~2-3 days
• Mixed Pipes & Fittings
portfolio
• On-demand orders from the
distributor
• Branded pipes offer lower
margins than unbranded
• 5-7 days credit provision
Distribution • Direct from the company
• Delivery by Road in Trucks
• Direct from the distributor
• Delivery by road in SCV
Territory Size ~50-60 Kms (25-35 retail outlets) ~ 2-4 kms
Key Customers • Retail Outlets
• Direct Customer
• Direct Customers
• Farmers/Rural stores
KEY INSIGHTS
RETAILER INSIGHTS
In-Store Promotions
• Plumber plays a
crucial role in
promoting the
brand and
influencing end-
user decisions.
Role of Influencer
• Branded players
offer lower
margins (by
~2%-3%) relative
to the Un-
branded players.
Margins
10. Functional Attributes
JALYAN Pipes
Branding Basics
Product Portfolio (By application)
• Drip Irrigation
• Sprinkler Irrigation
• Micro Irrigation
• Water Storage
UPVC
• Hot water Irrigation
• Industrial irrigation
• Greenhouse
Irrigation
CPVC
• Water Supply
• Sewage Pipes
• Pump Installation
UPVC
• Hot Water supply
• Fire protection
• Industrial water
supply
CPVC
• Home Plumbing
• HVAC solutions
• Sanitation Pipes
• Drainage/Roof Drainage
UPVC
• Hot Water
Plumbing
• Industrial plumbing
• Fire protection
CPVC
Agriculture Segment Water Management Segment Construction Segment
Jal means "water," emphasizing the primary use of PVC pipes for water-
related applications
• Easily understandable by target market
(Locals)
• Conveys utility of the Product
Yan suggests "vehicle," symbolizing the role of the pipes in transporting water.
• Durable • Corrosion Resistant • Leak Proof
• Chemical/UV resistant • Temperature Resistant • Low Maintenance
• BIS Certified
• Quick info. to educate consumers
• Communicate the quality of the product
• Aids in the decision-making of the user
"JALYAN: पानी का सफर, हमेशा सुरक्षित।" "JALYAN: Water's Journey, Always Secure."
Tagline
Rationale Behind
11. Understanding the customer needs & personas
• Background: Ian is a forward-thinker
living in an urban setting. When it comes
to new applications like rainwater
harvesting or modern plumbing fixtures,
he seeks UPVC and CPVC pipes for their
reliability and sustainability.
• Establish partnerships with local plumbers
and contractors for recommendations.
• Foster a presence in neighborhood social
networks and local forums.
• Highlight the product's reliability and
affordability for urban residents.
• High purchase involvement.
• Appreciates innovative solutions.
• Researches extensively online, reads
technical specifications and
• Consult with plumbers, architects, &
urban planners for recommendations.
• Provide detailed technical information
• Collaborate with urban development
influencers for endorsements.
• Highlight the product's contribution to
sustainable urban living.
• Low purchase involvement and budget-friendly
• Values practicality, reliability, and functionality.
• Background: Sarah lives in the city. When
considering new applications like bathroom
renovations or kitchen upgrades, she relies on
recommendations from professionals who have
hands-on experience with UPVC and CPVC
pipes.
• Background: Kamlesh lives in a rural
community. When facing replacement
needs like upgrading well water systems
or irrigation setups, he relies on word-of-
mouth referrals from local experts.
• Seeks advice from trusted plumbers and
contractors for product recommendations.
• Participates in social discussions.
• Prioritizes products with endorsements from
local professionals.
• Name: Tejas
• Age: 30
• Occupation: Civil Engineer
• Name: Sanjana
• Age: 35
• Occupation: Homemaker (Urban)
• Low purchase involvement and budget-
friendly
• Values practicality, reliability, and
functionality.
• Seeks advice from trusted contractors in
the village.
• Participates in community meets.
• Prioritizes price and quality over brand.
• Establish partnerships with local
contractors and the village head
(Sarpanch) for recommendations.
• Highlight the product's reliability by
demonstrating its strength & quality by
road shows
• Name: Kamlesh
• Age: 40
• Occupation: Farmer (Rural)
Persona Characteristics
Purchasing Behaviour
Marketing Approach
12. Targeted
Markets:
Objectives:
Building customer awareness
Survey Findings: Our research shows the target segment relies a lot on brand name and influencer guidance while making a choice among the available brands.
Brand Recall:
To boost recall value through
multiple mediums
Building a brand image:
Focus on the functional attributes of the
product portfolio
Penetration through Mass Media
TV shows and web
series:
Short, powerful ads
at strategically
relevant times
Product Placements
in series
Newspapers:
Full/Half-page ads
on the front page in
regional
newspapers.
Social media marketing
Customer Targeting:
Using data analytics
for identifying traits
and for personalized
ads.
Engagement:
Newsletter, quizzes,
and customer
testimonials
promoted via social
media.
Regional Communication
Regional ads: Wall Paintings in busy areas in
regional context and language.
Leveraging retail formats
In-Store Promotions: Tie-ups with on-boarded retail
stores for in-store promotions (hoardings, flyers, etc.)
Shelf Placement: Targeted Shelf/Rack placement to
increase visibility
Retailers’ Incentivization: Rewards for retailers for
customer education and push sales
Website traffic via SEO
Website Ranking
Optimizing loading & server
response time
Regular updation of site
content
Website accessibility
Keyword Optimization
Focus on backlinks
from credible sources
Influencers
Offline events
Partnerships with regional events:
Starting with annual regional events in sports,
etc. to promote the brand among locals.
Trade Shows & Seminars:
Promote the brand among channel partners at
trade fairs
SEM via online ads
Regional Campaigns:
Using geo-analytics to
run personalized
promos based on user
location
Product Demonstration
Strength Campaign: To demonstrate the strength
& quality of pipe by conducting a campaign.
Collaboration: Promotion through the village head
(Sarpanch) during community meetings
Urban Rural Both
Performance
Tracking:
Using engagement
metrics like click-
through rate,
conversion rate
13. Ensuring brand accessibility: Channel Development
There is a need to develop a channel that caters to Urban and rural markets.
Warehouse Distributor Retailer/Dealer Urban areas
Rural areas
Choosing the Distributors & Retailers
Criteria Distributor Retailer
Current Business Focus on Building materials Hardware stores
Geographic Coverage ~30-40 retailers ~2-3 kms
Financial Resources 4-6 days credit 10-12 days credit
Reputation & Credibility High High
Marketing Capabilities Large Network Local Outreach
Regional local brands have EBITDA margins of 9-12% and key branded players 14-18%
despite incurring higher expenses for branding, sales & distribution and administration
Sub-Distribution
Agricultural Supply Stores
Local Hardware Stores
Margins across Channel
Distribution
Channel
MANUFACTURERS
DISTRIBUTORS
RETAILERS/LOCAL HARDWARE STORES
UPVC:10-16% CPVC: 17-22%
UPVC: 8-12% CPVC: 8-12%
UPVC: 5%-7% CPVC: 5-7%
Retailers cut margins to push the products in a competitive scenario.
Urban
(Tier 1,2,3 Cities)
Rural Areas
14. Establishing network
To gain trust and credibility as a brand in the industry.
This would help push the product through the channel to the end consumer.
Distributors
1.Attractive Margins:
Offer competitive margins to
distributors
2. Exclusivity Agreements:
Key distributors in specific regions to
create a sense of partnership and
loyalty
3. Inventory Support: Assist distributors
with inventory management by
providing support for stocking and
replenishment.
4.Marketing Materials: Supply
distributors such as brochures, product
catalogs, and displays to promote your
products.
5.Training Programs: Conduct regular
training programs for distributor sales
teams
6.Incentive Programs: Create incentive
programs that reward distributors for
meeting or exceeding sales targets
7.Timely Deliveries: Ensure timely
deliveries of products to distributors
Contractors/Plumbers
1.Training Workshops:
To enhance plumbers' skills and
knowledge related to the installation of
UPVC and CPVC pipes.
2.Product Demos:
To show plumbers how our pipes
outperform competitors in terms of
quality, durability, and ease of
installation.
3.Certification Partnerships: Partner
with plumbing associations to offer
certification courses.
4.Technical Support: Establish a support
team that plumbers can reach out to for
technical assistance
5.Discount Programs: - Pay Rs. 1 per
feet of purchase to the plumber,
authorized by the dealer.
6.Community Recognition: Recognize
top-selling plumbers from the territories
through awards or features in your
marketing materials.
Retailers
1.Merchandising Support: Provide
retailers with point-of-sale materials,
displays, and signage that highlight the
products
2.Product Training: Conduct training
sessions to ensure they can promote
products effectively.
3.Co-Marketing Campaigns: Collaborate
on co-marketing campaigns, featuring
joint promotions and advertising.
4.Exclusive Discounts: Offer promotional
pricing to retailers who prominently
feature and promote products.
5.Stocking Assistance: Assist retailers by
providing guidance on product
assortment and inventory management.
6.Extended Payment Terms: Extended
payment terms to retailers, making it
easier for them to carry your products.
7.Customer Referral Program:
Implement a customer referral program
that rewards retailers for referring end
consumers to the brand.
Suggestions
Existing Industry
Trends
Key brands are using
loyalty programs
targeted towards
retailers &
distributors to
ensure brand loyalty.
Incentive programs
based on sales
targets are also in
place.
Plumbers
Current brands don’t
incentivize
plumbers/ground
workers. However,
these are important
decision drivers
15. Financial & Market Considerations
CPVC Pipe & Fittings Market UPVC Pipe & Fittings Market
State
Total CPVC Demand
FY23
Total CPVC Demand
FY28
Market CAGR
Tamil Nadu 16 31.8 14.73%
Andhra Pradesh 12 19.2 9.86%
Telangana 11 13.7 4.49%
West Bengal 14 29.1 15.76%
Odisha 6 12.9 16.54%
Total 59 106.7 12.58%
State
Total UPVC Demand
FY23
Total UPVC Demand
FY28
Market CAGR
Tamil Nadu 28 48 11.38%
Andhra Pradesh 17 29 11.27%
Telangana 13.5 21 9.24%
West Bengal 26 45 11.60%
Odisha 12 20 10.76%
Total 96.5 163 11.05%
We are considering that the CPVC business will over the FY24 to FY28 will
grow at 2x the target market CAGR at 25.16%
We are considering that the CPVC business will over the FY24 to FY28 will
grow at 1.5x the target market CAGR at 16.575%
Capturing 5% Market Share in initial year Capturing 3.5% Market Share in initial year
• CPVC market comparatively has lesser players and is more consolidated
• As CPVC needs one of the licensor from Lubrizol, Sekisui, Kaneka, Kem
One to import raw materials, making it a barrier to entry
• Only 13.71% of the target market is captured by ’Other’ players. Due to
less competition we can capture higher market share in initial years
• We will be aggressive on marketing in the initial years and give 1% better margins to Wholesalers & Retailers
• Our primary goal is to develop strong distribution in Rural areas of the Target Market and create a Push & create a Pull through BTL activities like keeping in
touch with Sarpanch, Wall Paintings, Demonstrations, among others
• Prime Corporation has its presence since more than 50 years. Thus, it gives a good start push due to the Network build over the years.
• Organized players are also growing faster after the GST & mandatory E-Way bills
• UPVC market is comparatively fragmented with more # of players
• 18.71% of the target market is captured by ’Other’ players. Due to more
competition we can capture average market share in initial years
• According to Indian Institute of Capital Markets, Apollo Pipes' CAGR from
FY2018 to FY2022 was 14.7% (1.5x that of peers) who focused on UPVC
16. Financial Projections
Category Terms FY24 FY25 FY26 FY27 FY28
CPVC
Quantity Sold (KT) 3.32 4.16 5.20 6.51 8.15
Price per KT (Rs Cr) ₹ 25.28 ₹ 26.34 ₹ 27.45 ₹ 28.60 ₹ 29.80
Revenue (Rs Cr) ₹ 83.95 ₹ 109.49 ₹ 142.79 ₹ 186.23 ₹ 242.87
UPVC
Quantity Sold (KT) 3.75 4.37 5.10 5.94 6.93
Price per KT (Rs Cr) ₹ 17.73 ₹ 18.48 ₹ 19.26 ₹ 20.06 ₹ 20.91
Revenue (Rs Cr) ₹ 66.52 ₹ 80.80 ₹ 98.15 ₹ 119.22 ₹ 144.82
Finances
Total Revenue (Rs Cr) ₹ 150.47 ₹ 190.29 ₹ 240.94 ₹ 305.45 ₹ 387.69
(COGS) ₹ 147.66 ₹ 169.81 ₹ 195.28 ₹ 224.57 ₹ 258.26
Gross Profit ₹ 2.81 ₹ 20.48 ₹ 45.66 ₹ 80.88 ₹ 129.43
Gross Margin 1.87% 10.76% 18.95% 26.48% 33.39%
(Other Expenses*) ₹ 30.55 ₹ 36.73 ₹ 44.09 ₹ 52.84 ₹ 63.19
EBITDA -₹ 27.73 -₹ 16.25 ₹ 1.57 ₹ 28.03 ₹ 66.24
EBITDA Margin -18.43% -8.54% 0.65% 9.18% 17.09%
• Considered 5% Market Share in CPVC and 3.5% Market Share in UPVC since FY24 , over and above the CAGR growth rate from FY23 to FY24
• Average Price per KT was derived from Domestic Demand; while YOY price growth considering 4.2% Inflation is considered. Average price for FY23 was
INR 24.26 Crore/KT & INR 17.02 Crore/KT for CPVC & UPVC respectively
• Overall YOY growth in revenue is 20.93% based on margins provided
• COGS is inclusive of fixed costs and variable costs. As fixed cost constitute around 20% while variable for 80% (per the Prabhudas Lilladhar Report). Hence,
considered growth of 15% in COGS
• Other Expenses include Cost of shipping goods to customers, Commission and royalties on sales revenue, Salaries and wages of sales and distribution staff
& Promotion and marketing expenses (majority expense).
• In FY28, we have kept other expenses at 16.3% (last 3 year average of Astral, Finolex, Prince, & Supreme) but have started FY24 with 20.3% reducing 1%
each year in order to accommodate market development & growth activities
17. Workplan
Particular
Oct-23 Nov-23 Dec-23 Jan-24 Feb-24
Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12 Wk 13 Wk 14 Wk 15 Wk 16 Wk 17 Wk 18 Wk 19 Wk 20
Phase 1: Planning
a. Team formation
b. Industry Analysis
c. Requirements Gathering for Market Entry
d. Hypothesis Development for Gap
e. Primary Research
Experts (Architects, Builders, Plumbers) & Consumer
Onboarding
Target group interviews
Results analysis
f. Secondary Research
Vignette ID from database
Data collection & analysis
g. In-depth financial analysis
Accurate data collection
Identification of key headers
Business plan development - Identification of Target
Market & Revision
Feasibility Check
h. Go-ahead from client team
Phase 2: Implementation
a. Branding strategy
Establishment of communication theme
Selection of promotional channels
Channel Partner identification (Distributor & Retailors)
Go-ahead from client team
Kickoff offline promotional events
AD network onboarding (online promo)
Go-ahead from client team
Kickoff online promotional events in rural & urban parts
b. App development (Plumbers, Distributor, Retailors)
Identification of Key Features
Comeptitive Benchmarkign
Onboarding development team
Implementation of steps
c. Distribution & Operations Management
Statewise Warehouse location identification
Rent negotiations / agreement
Contractual agreements
Layout planning & kickoff
d. Establishing Transportation
Partner identification
Negotiaitons & Agreement
Establishing Waterways usage
Establishing Waterway Partners & Agreement
18. NAME Mobile Number Email ID
Romil Shah 9427217688 bj22193@astra.xlri.ac.in
Tejas Lodha 9479366663 bj22208@astra.xlri.ac.in
Nitish Bajaj 9319928113 bj22027@astra.xlri.ac.in
THANK YOU
20. Prime Corp manufactures PVC resins and wants to integrate
vertically by venturing into the manufacturing of UPVC and
CPVC pipes & fittings. Due to the cyclical nature and the
threats from imports in PVC margins posing challenges in
current operations
Prime Corporation Profile
Value Chain and Problem Statement
Whether Prime Corp should enter manufacturing & distribution
of CPVC and UPVC pipes and fittings, targeting B2C
segment. If yes, how they should enter the market
Problem Statement
PVC (Resin)
CPVC
CPVC/ UPVC
Pipe Extrusion
Pipe Transportation Channel Partners Customers
PVC Resin
Transportation
CPVC Transport
Warehouse
1
2 3
3 4 5 6 7 8
2
4
7
Pipe Manufacturing has a compounding unit for UPVC compound manufacturing
CPVC manufacturing requires a high CAPEX for chlorination of PVC resins
Partnership with both exclusive and multi-brand distributors
• To reduce the cost of pipes, many manufacturers have started using fillers in high
quantities. Unaware consumers were deviating towards low-cost pipes as the price
of pipe varies from Rs. 60 (high filler content) – Rs. 150+ (Branded Pipes).
• These high filler-loaded pipes usually led to pipe bursts, leakages, joint loosening,
choking, etc. This necessitated companies to educate consumers (Plumbers,
residential users, civil contractors, etc.) about the durability, BIS standards, and
quality of pipes.
• That is why organized manufacturers started creating awareness via ATL and BTL
marketing of pipes and thus branded pipes are perceived as premium pipes and
provide better margins.
Consolidation of the industry by organized players thru ATL marketing
SOURCE: PVC Pipe manufacturer (M/s. Ashapura Polymers, Vadodara); RIL- Sales Officer (Madhya Pradesh)
21. Key Factors Considered
Market
Outlook
Market
Growth
Market
Stakeholder
Market
Size
Market
Share
Risks
Vendors
Govt.
Bodies
Substitutes
New
Entrant
Company
Outlook
Operations
Technology
Sales &
Marketing
Promotion
Place
Price
Products
Financials
Profitability
B/S Sheet
Position
Process
Comp.
• Activities such as
conducting market
research, understanding
the target market, and
identifying the
competition to understand
if the market is suitable to
enter or not.
• Developing a product that
meets the needs of the
target market and
differentiating the product
from the competition
based on quality, price,
utility etc.
• Developing a marketing
plan, creating a sales
team, and building
relationships with
distributors
• Marketing the brand to
increase consumer reach
and recall
• Understanding the CAPEX
requirement and
companies' capability to
fund the project
• Forecasting sales, and
calculating the return on
investment
Market Analysis Product Development Sales and Marketing Financial Planning
22. Major Constraints
Questions to be addressed
• Licensing and regulation for CPVC compound manufacturing
• Following BIS guidelines cost-effectively especially for Chlorinated PVC pipes and fittings
Technical
Constraints
• There has been a shift observed from PVC to HDPE pipes. This shift is because HD pipes can couple easily due to hard threads
• Established players are focusing on wide product portfolio like PE, PVC pipes, and overhead tanks to provide holistic range of
products to consumers which helps them closing deals with dealers & distributors
Product
Related
• Industry peers have multi-locational plants which essentially helps in saving their transportation costs
• CPVC plants are high CAPEX investments. Pipe manufacturers also invest in R&D which will be a difficult task for new entrant
• Fittings manufacturing is a high CAPEX market as different size requires different moulds to manufacture
Financial
Constraints
• Building an efficient distribution network in the presence of existing players who are having nationwide distribution
• Building a reputable brand in a competitive market
Sales &
Marketing
• What is the quantum of PVC resin to be used for UPVC and CPVC
manufacturing?
• Pipe manufacturing plant will be a green field or brown field investment?
• The CPVC compound will be manufactured or imported? In either case
from which licensor, the client should partner? (Lubrizol, Sekisui, Kaneka,
Kem One)
• Any identified piping segment or niches within the market that the client
intends to target?
• What resources, including financial, human, and technical, does Prime
Corp have available for entering this market?
SOURCE: PVC Pipe manufacturer (M/s. Ashapura Polymers, Vadodara); RIL- Sales Officer (Madhya Pradesh)
• Are you considering any partnerships, collaborations, or alliances in your
market entry strategy?
• What is the expected timeline for entering the market and achieving key
milestones (ROI, IRR, Distributor network, etc.)?
• How do you plan to set the pricing for your CPVC and UPVC pipes and
fittings in the B2C market?
• What level of market share, revenue, or brand recognition would be
considered a successful outcome?
• Beyond the initial market entry, what are your plans for long-term
sustainability and growth in the PVC pipes and fittings market?
23. Hypothesis tree
Prime Corporation (PC) should forward integrate into UPVC and CPVC pipes ('Market') and fittings if:
The Market is attractive
There is potential to capture
Market Share
The company has existing
capabilities
There is profitability
If Market has
growth
opportunities
If it is a Sizeable
Market
If the market has
high revenue
generation
potential in value
terms
If the outlook of
dependent
industry -
Construction &
Agriculture – is
positive
If there are Govt.
Schemes for
development of
new markets
New/Emerging
Markets
Existing Markets
with Domestic
components
If there are any
untapped/untouc
hed or emerging
market segments
If current markets
can be captured
through
some differentiate
d opportunities
If there is an
opportunity to
capture the
import demand
Existing Markets
with Imported
components
Financial (Fixed
Cost)
Strategic
If company has
capability to make
heavy investment
for manufacturing
& distribution
setup
If the synergy of
PVC Resins
manufacturing
significant enough
to have an added
advantage
Revenue/Pricing Cost
If PC can have
competitive
pricing (at par
with quality) to
drive revenue
If PC can optimize
the per unit cost
of Production?
Breakeven Point
If PC can optimize
other non-
production costs
across value chain
(Advertising/Distri
bution Margins
/etc)
L1 Hypothesis
L2 Hypothesis
L3 Hypothesis
24. Updated Hypothesis tree
Prime Corporation (PC) should forward integrate into UPVC and CPVC pipes ('Market') and fittings if:
The Market is attractive
There is potential to capture
Market Share
The company has existing
capabilities
There is profitability
If Market has
growth
opportunities
If it is a Sizeable
Market
If the market
has high
revenue
generation
potential in
value terms
If Industry
outlook is
positive &
growing
If there are
Govt. Schemes
for
development of
new markets
New/Emerging
Markets
Existing
Markets with
Domestic
components
If there are any
untapped or
new markets
If current
markets can be
captured
through
some differenti
ated
opportunities
Financial (Fixed
Cost)
Strategic
If company has
capability to
make heavy
investment for
manufacturing
& distribution
setup
If the synergy of
PVC Resins
manufacturing
significant
enough to have
an added
advantage
Revenue/Pricing Cost
If PC can have
competitive
pricing (at par
with quality) to
drive revenue
If PC can
optimize the
per unit cost
of
Production?
If PC can
optimize
other non-
production
costs across
value chain
L1 Hypothesis
L2 Hypothesis
L3 Hypothesis
25. Financial Considerations
The cost of setting up a CPVC
manufacturing unit with a capacity of
30,000 tonnes per annum (TPA) in India
was estimated at Rs 190 crore (about $25.5
million) in 2022. Assuming a Capacity of
30KT, appx cost will be 200 Cr. For current
FY
Cost for CPVC
Plant Set-up
The cost of setting up a UPVC and CPVC
pipe plant with a capacity of 5 MT/day ( at
Rs 7 crore
Assuming an investment of 50000 TPA for
pipe extrusion approx. cost will be ~150 Cr.
Cost for Pipe extrusion
plant set up
Peer manufacturers incur an expense of
2%-3% of their Revenue on promotion.
Since Prime Corp, is entering the market
they will have to spend around ~5% of their
forecasted revenue on Marketing activities.
Sales and Marketing
Cost
SOURCE: Annual Reports (Apollo Pipes); Annual Reports (Prince Pipe); Annual Reports (Finolex- note: FY 2020 & 2021 costs have been ignored due to very high PVC prices) News Articles
With the extensive dealer base of top
players, high investment will be required in
the distribution to build the network. Appx
Industry expense is around ~5%, we expect
the same to increase to ~7% to capture the
market. Similarly, Employee salary costs
should also be increased to 7%
Distribution
Expense
PVC and CPVC resin together contributes
70%-75% of the total cost. Since Prime Corp.
will be sourcing their RM from their own
plant. We expect a significant reduction in
RM costs to ~65% based on Annual report of
Finolex
RM Sourcing
Cost
Finolex is taken here because they
are the only player in India with a
PVC manufacturing plant as well
as pipes manufacturing.
Prince Pipe Apollo
FY 22 FY 21 FY22 FY 21
Revenue from Operations
(In million ₹)
26568 20715 7808 5161
Sales (MT) 139034 138289 53849 47236
Revenue/ MT 19% 15% 14% 11%
Average Revenue/ MT 14.75%
Expected Revenue of
Prime Corporation
(Assuming 40KTPA sales)
₹ 5900 Million
• Prime Corp is focusing only on branded pipes
• They are utilizing in-house PVC resins for manufacturing UPVC
pipes and fittings
• CPVC will be manufactured using PVC resin instead of
importing CPVC compound
• Prime Corp. will operate at the average revenue/ MT of the
industry with 50KTPA capacity for a year at an 80%
operational rate (Used for revenue estimation)
• As Price Pipes & Apollo were only publicly listed firms in pipe
manufacturing & hence, considered averages of both of them
as of now for the estimations
Assumptions Taken
