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
PAPER INDUSTRY IN INDIA 2014.PPT
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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
PAPER INDUSTRY IN INDIA 2014.PPT
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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
PAPER INDUSTRY IN INDIA 2014.PPT
11th Five Year Plan
12th Five Year Plan
10
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
PAPER INDUSTRY IN INDIA 2014.PPT
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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
PAPER INDUSTRY IN INDIA 2014.PPT
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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
PAPER INDUSTRY IN INDIA 2014.PPT
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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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