Speciality Paperboards and Packaging

8/8/2019 Speciality Paperboards and Packaging

1/13

Specialty paperboards andSpecialty paperboards and

packagingpackaging


2/13

IntroductionIntroduction

y Set up in 1925

y Strategic backward integration for ITC cigarette business

y Country's largest converter of paper board intopackaging

y ITC reports that products with unique and sophisticatedpackaging is expected to drive increased demand forsuperior quality paperboards.

The company functions in the following areas:

packaging

graphic

Specialty

papers


3/13

Back integrationBack integration

y Another Strategy was instead of opting for imports, thecompany took a decision to source its fibre by mobilizingtribal to plant trees on their private wastelands andencouraging small and marginal farmers to undertake farmforestry programmes in the vicinity of the mill. This Strategy

had 2 positive effects: Low Cost Raw Material (no need to import)

Employment for theTribal (CSR)

The tribal are given saplings at break-even cost. Of the100,000 hectares, around 3,000 is a registered cleandevelopment mechanism project. The whole initiative

improved profit margins from 15 per cent to 30 per centover a period, while mitigating external risks.


4/13

ITCs Paperboards BusinessITCs Paperboards Business

y Market leader in growth segment - value

added coated boards

yWorld-class contemporary technology

Ozone bleached Pulp Mill operationscommenced only one of its kind in India

meeting world-class environmental standards

y Internationally competitive quality and

cost


5/13

Market Scenario and opportunitiesMarket Scenario and opportunities

for the sectorfor the sectory The Global Paper and Paperboards Industry is estimated togrow at 4% in the coming year(2011) after two consecutiveyears of slowdown

y The domestic Paperboards industry grew by about7% in2009-10 against 6% in the previous year and is expected to

gain momentum and grow at around 9% per annum over thenext 5 years

y Company is the market leader in the Paperboards segmentwith a wide range of products, a value market share of about26%

y The Indian Paper Industry at 9 million tons per annum

accounts for about 2% of the worlds production of paperand paperboards

y India is globally the fastest growing market for paper, withpaper consumption estimated to touch 14 million tons by2015-16


6/13

Continue..Continue..

y Growth Opportunities:

Pharma

textiles

FMCG,

Modern retailConsumer electronics

y The growth in writing and paper industry is going toincrease from 6% to 8% in the next 5 years

y In the case of specialty papers, increased infrastructurespending and growth in construction will drive demand for

quality dcor and insulating gradesy Currently, the business exports to more than 50 countries

including UK, UAE,Turkey, Greece, Sri Lanka, Bangladesh, Iranand Nigeria.


7/13

StrategyStrategy

y Rapid inflation affected the industry, though thecompany has higher value capture through increasedusage of in-house pulp, superior product mix andseveral cost management initiatives

y Company has pursued an aggressive clonalpropagation strategy to address the twin challengesof securing long term supply of fibre and remainingcost competitive

y R & D in more than 100,000 hectares of plantationincluding 13,000 hectares planted resulted into high

yielding Subabul clones.y Focusing in the area has an competitive advantage in

the long term business


8/13

Continue..Continue..

y Waste paper is a key source of fibre in themanufacture of recycled boards

y ITC

in this particular business is focusing oncost reduction. The utilization of wastepapers by initiative called wealth out ofwaste(WOW)

y In India there is rarely re-use of recycling

concept than developing countries. Butcompany is effectively using this strategy ofrecycling and reduce the cost with providingthe best quality product


9/13

Porters Generic StrategyPorters Generic Strategy

y ITC to improve customer service with

reduce lead time and a wider product

range

y Supplier is the market leader in the

various field across the business


10/13

SwotSwot

y Strengths

Market leader status

World class technology

Internationally competitive quality and cost

y Opportunities

Globalization

y Weakness

None as of now

y Threats

New entrants


11/13

Future strategiesFuture strategies

y Pre- emptive defense-acquire rivals

y Go global

y Upgraded with the latest technology


12/13

Paperboard Demand ProjectionsPaperboard Demand Projections --

AsiaAsia

y Asian region demand (excluding

Japan) growing by 0.5 million tonnes

per annum

y Significant export opportunities for

high quality Indian manufacturers

ITC paperboards exports - Rs. 2 billion

appx


13/13

ITCs Paperboards & PackagingITCs Paperboards & Packaging

businessesbusinesses

y Capacity expansion projects underway

120000TPA Pulp Mill commissioningcommenced; being stabilised

100000TPA paper machine (to support

Stationery business growth plans) trialcommissioning commenced

y ITCs packaging SBU -Indias largestconverter of paperboard into high qualityprinted packaging

Leading supplier to Indian FMCG segmentProvides superior packaging solutions to thecigarettes and new FMCG businesses

Speciality Paperboards and Packaging

Documents

Transcript of Speciality Paperboards and Packaging