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 PAPER INDUSTRY IN INDIA 2014.PPT

•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

PAPER INDUSTRY IN INDIA 2014.PPT

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%

A2 A1

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

B A

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%

y x

26%

74%

2001 2011

20% 10% 30% 40% 50% 60% 70% 80% 90% 100% 0%

2015e x1 y1 z1 m1 n1

2010 x y z m n

55-64 45-54 35-44 25-34 15-24

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

A2 XX

12th Five Year Plan 11th 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%

B A

• 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

C B A

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

Net Margin Operating 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 Capital Employed Return on Equity

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

Net Profit/Loss Total Income

45835.5 49246.138400.8

778.8

1,230.9

2,127.01,969.9

0

20000

40000

60000

0

1,000

2,000

3,000

INR mn INR mn

2013 2012

48320.0

2011 2010


Public: Domestic Company – Company A (3/x)

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%

18%19%22%

100%

0%

50%

100%

2013 2012 2011 2010

Business Highlights

Description News

Overview •XX

Export Presence •XX

Overseas India



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

Thank you for the attention

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market research report : paper industry in india 2014 - sample

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