Market Research Report : Paper industry in india 2014 - Sample

Paper Industry – India October 2014

Executive Summary  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- --

Market Overview

 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

Drivers & Challenges

Trends

Competitive Landscape

Challenges  High input costs

 Growth in Press Publications

 Increasing Internet Penetration

 Increased Demand for Packaging

 E-books Growth

 Increased Toll Collection Operations

 Low rate of paper recycle

 Pulpwood Plantation Area Expansion – Major Players  Raw Material Import Key Players Company A

Company B

Company C

Company D

Company E

Company F

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•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 PAPER INDUSTRY IN INDIA 2014.PPT

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Demand for paper in India is expected to cross the 25mn tonnes mark, by 2025

SAMPLE

Paper Industry – Overview

Paper Demand – Growth

• 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

Mn Tonnes c

20 15

d

A

25

a

b

10 5 0

FY20--

FY20--e

FY20--e

FY20--e

Paper Industry – Demand Share (FY 2014) 5% 19%

31%

 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 IN INDIA 2014.PPT

AA

CC

BB

DD

45%

4

Paper industry in India has immense potential for growth despite increasing input costs

SAMPLE

Paper Industry – Market Size (Turnover)

Mn Tonnes

INR bn 8.9%

DD CC

Paper Industry – Production

b

a

c

d

f

e

CC1

BB

BB1

AA

AA1

0

0 2013

2014e

2015e

2016e

2017e

2018e

Paper Production: Raw Material Share (2013)

7.9%

DD1 a1

a2

a3

a4

2013

2014e

2015e

2016e

a6

2017e

2018e

Paper Production: Mills Category (2013)

21.0%

30.0%

35.0%

A 44.0%

a5

X

B

70.0% A1

PAPER INDUSTRY IN INDIA 2014.PPT

A2

5

SAMPLE

Paper Industry: Snapshot (2/2) Installed Capacity: State – Wise (2013)

Installed Capacity: Region – Wise (2013) x1

5.0%

25.0%

x2

x4

North 70.0%

Group 1*

West

Group 2*

South

Group 3*

World Ranking: Paper Production (2012) Mn MT

World Ranking: Paper Consumption (2012) Mn MT x1 D

A B

x1

C B

C

x2

x3

0 World

East

x3

China

USA

x4

x5

x6

Japan Germany India

x2

A

x3

0 World

China

USA

x4

x5

x6

Japan Germany India

*: Group 1: XX Group 2: XX Group 3: XX

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Writing and Printing paper demand is expected to grow at a CAGR of around x% over 2013-18 Writing and Printing Paper Market – Overview

SAMPLE

Writing and Printing Paper: Demand

• 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

MTPA XX

C

 Strong growth is expected in the copier, coated and maplitho segments

B

• Within W&P, demand growth for copier paper is expected to be the strongest at around x% CAGR during 2013-18

x1

x2

x3

x4

2013

2014

2015e

2016e

x5

x6

2017e

2018e

A

 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

0

• Increase in office space absorption is expected to translate into stronger demand for high-quality copier paper

W&P Demand Share (2012-13)

W&P Demand Share (2017-18)

X2

Y2

Y1

X1 A

B

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SAMPLE

Comparative Analysis: Domestic Vs. International Market (1/2) World Paper Types

India

Production (2010)

Leading Manufacturers

Technologies Used

Production (2010)

No. of Mills

No. of Mills Using Advanced Technologies

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

Technology Status

Note: Information as of FY 2011

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Export – Import: Paper Industry Paper Import – Value Wise

SAMPLE

Major Importing Nations – Value Wise (2013)

INR bn E X

D

27.4%

19.7%

C1 C2 C3

C B

x4 x1

A

x3

x2

17.3%

9.0%

12.0% 14.6%

0

C4 C5 C6

2010-2011 2011-2012 2012-2013 2013-2014

Paper Export – Value Wise

Major Exporting Nations – Value Wise (2013)

INR mn A4

C1

9.5%

18.96%

A3

41.92%

A2 A1

y1

y2

y3

y4

7.19% 10.81% 9.82%

0 2010-2011

2011-2012

11.30%

C2 C3 C4 C5 C6

2012-2013 2013-2014

Note: HS Code 4802 PAPER INDUSTRY IN INDIA 2014.PPT

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SAMPLE

India has the second largest education system in the world Macro Overview of the Indian Education System Literacy Rate in India x

Demographic Split in Education 15-24

y

25-34

35-44

45-54

55-64

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

26%

35%

x

65%

y

z

m

n

2010

n1

2015e

74% x1

2001

y1

z1

m1

2011 Key Indicators

Budget Allocation for Education

Five Year Plan Outlay for Education

INR bn

INR bn

D

X

C

c

B

a

b

d

e

XX

5,000 4,000

A2

A1

3,000 2,000

A

1,000

0

0 2009-10

2010-11

2011-12

2012-13

2013-14

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11th Five Year Plan

12th Five Year Plan

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Growth in newspaper industry as well as other publications is driving demand for paper

SAMPLE

Growth in Press Publications

Impact

• Newspaper demand has been growing at an average rate of x% during last 5 years

Newsprint Demand

• 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

mn MT C

X

B

c

a

b

2012

2014

e d

A 0 2015e 2020e 2025e

Indian Printing Industry INR bn X

A3 A2

B 49.0%

51.0%

A

A1

0.0 2013

2015e

A

B

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Increasing number of toll collection plazas will drive paper demand in the country

SAMPLE

Increased Toll Collection Operations

Impact

• 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 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

Paper consumed by xx toll plazas on NH Toll Name

Tag Vehicle

Slip Vehicle

Total

Point 1

X

X

X

Point 2

X

X

Point 3

X

Total

X

Subject

Calculations

H1

X

X

H2

X

X

X

H3

X

X

X

H4

X

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 INDUSTRY IN INDIA 2014.PPT

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SAMPLE

Print Book Vs. E-Book Retail Price per book

Print Book

E-book

INR a

INR a1

Royalty payment to author

Paid to retailer

INR b

INR b1

INR c

INR c1

Others

INR d

The publisher receives ~ INR xx per unit sold

INR d1

The publisher receives ~ INR x per unit sold

• Point 1 • Point 2

Note: ‘Others’ would include payments for shipping, warehousing and production under print books while for ebooks, it would cater to digital rights management, digital warehousing, production and distribution PAPER INDUSTRY IN INDIA 2014.PPT

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Domestic players are focusing on pulpwood cultivation area expansion Pulpwood Plantation Area Expansion – Major Players • XX • XX

SAMPLE

• XX • XX • XX • XX

Pulpwood Cultivation Area Growth hectares F E

D C B A 0

hectares X a2

a1

FY 2011

FY 2012 A

a3

D C

FY 2013

hectares

x1 b2

b3

b1

D C

B

B

A

A

0

0 FY 2011

x3

FY 2012

FY 2013

B

PAPER INDUSTRY IN INDIA 2014.PPT

c3

c2 c1

FY 2011

FY 2012

FY 2013

C

14

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

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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 %

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

Waste Type

Collection Rate

XX

XX

XX

XX

XX

XX

Writing/ Printing

Copier Paper

Cream Wove

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

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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

SAMPLE

ITC Ltd. – PSPD – New Product Launches 1.

XX

2.

XX

JK Paper Ltd. – New Product Launches 1.

XX PAPER INDUSTRY IN INDIA 2014.PPT

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SAMPLE

Market Competition – Porter’s Five Forces Analysis Threat of New Entrants

Impact XXXX

• XX

Impact XXXX

Bargaining Power of Suppliers

• XX

Competitive Rivalry

Impact XXXX

• XX

Impact XXXX

Bargaining Power of Buyers

• XX

Threat of Substitutes

Impact XXXX

• XX

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Competitive Benchmarking (2/x)

SAMPLE

Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3) Operating Margin

%

Net Margin

x2

C

x3

x1

B

y2

A

y1

y3

0 Company A

Company B

Company C

• XX • XX • XX

• XX • XX

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Competitive Benchmarking (3/x)

SAMPLE

Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (2/3)

Return on Equity

Return on Capital Employed

Current Ratio

% B A

x1

y1

x2

B1

y2

Company B

z1

z2

Company A

Company B

A1

x3

0 Company A

z3

y3

Company C

0.0 Company C

• XX • XX • XX

• XX • XX

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SAMPLE

Public: Domestic Company – Company A (1/x) Company Information

Corporate Address

XX

Tel No.

XX

Fax No.

XX

Website

XX

Year of Incorporation

XX

Ticker Symbol

XX

Stock Exchange

XX

Offices and Centres – India

Gurgaon

XX

Products and Services Category

Paper and Paper board

Products/Services XX XX XX XX

Key People Name

Designation

XX

Chairman

XX

Director

XX

Chief Financial Officer

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SAMPLE

Public: Domestic Company – Company A: XX (2/x)

AAAAA

AAAAA

AAAAAA

AAAAA

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SAMPLE

Public: Domestic Company – Company A (3/x) Financial Snapshot Total Income

Key Ratios

Particulars

Net Profit/Loss

INR mn 60000

INR mn 1,969.9

778.8 2,127.0

40000 20000

3,000 2,000

38400.8

45835.5

49246.1

48320.0 1,230.9

0

1,000 0

2010

2011

2012

2013

Financial Summary • 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

Value (30/07/2014)

Market Capitalization (INR mn)

11,176.7

Total Enterprise Value (INR mn)

68,473.7

PE Ratio (Abs)

2012

2011

2010

Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

1.04 16.44

Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)

-0.56 -0.97 -1.98 -0.80 -0.60 18.30 -0.58 -1.13

8.52% 9.08% 11.63% 13.15% 1.58% 2.55% 4.64% 5.13% 1.57% 3.54% 5.88% 7.27% 1.82% 2.62% 6.26% 7.42% 5.33% 5.93% 8.46% 7.84% -26.23% -44.53% -117.38% 52.27% 3.56% 4.13% 5.94% 6.34% 4.94% 6.07% 9.30% 9.39%

0.59

91.46%

90.87%

88.18% 86.73%

1.86 2.38

12.46% 7.03%

10.60% 4.65%

11.19% 10.01% 7.06% 5.86%

-14.63% -23.31%

0.59 0.03

0.69 0.04

0.83 0.06

1.63 0.19

50.19% 23.45% -38.11%

1.14 0.53 1.21

0.76 0.43 1.96

1.07 0.52 1.67

1.35 0.58 2.26

-13.10% -8.06% -1.81% -37.05% -7.79%

0.58 0.42 2.11 -3.07 0.54

0.66 0.45 2.15 -4.88 0.58

0.79 0.50 2.03 -9.93 0.64

0.71 0.48 1.53 3.94 0.61

Liquidity Ratios Current Ratio Cash Ratio

Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio

Key Financial Performance Indicators

EPS (INR)

2013

Cost Ratios

• 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

Indicators

y-o-y change (2013-12)

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

Improved

PAPER INDUSTRY IN INDIA 2014.PPT

Decline

23

SAMPLE

Public: Domestic Company – Company A (4/x) Key Business Segments

Key Geographic Segments

Paper

Pulp

Paper Products & Office Supplies

Others

India

100%

Overseas

100% 79%

50%

10% 0%

78% 9% 2%

2010

11%

2011

78% 9% 2%

10%

2012

77% 9% 2%

3%

11% 8%

50%

100%

0%

2013

2010

78%

81%

82%

22%

19%

18%

2011

2012

2013

Business Highlights Description

News

Overview

• XX

Export Presence

• XX

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SAMPLE

Public: Domestic Company – Company A (5/x)

• XX

• XX

S

W

O

T

• XX

• XX

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Strategic Recommendation (2/2)

Point 1

• XX

Point 2

• XX

Point 3

• XX

Point 4

• XX

SAMPLE

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