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CORRUGATED PACKAGING:
Future Perceptions & Global perspectives

Evolving Business Paradigm
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th
December 2010
M L Agarwal
Central India Packaging co Pvt Ltd
Hyderabad
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THE CHANGING FACE OF INDIA ..
YESTERDAY
Slow Growth Rate
High Rate of Inflation
Poor Credit Availability
Very Low Foreign Exchange
Reserves
License & Control Regime
Isolated Economy & Markets
Fragmented Industry & Markets
Serious Infrastructure Bottlenecks
Low on Self Belief and National
Pride
The Second Fastest Growing Economy
Among Highest Foreign Exchange
Reserves
On way to Free Market Economy
Integrated with the Global Economy
Promising Consumer Markets
Significant Investment in Infrastructure
Creation for Industry
Mature Market for IT & ITES
Exports becoming more vibrant
Growing Self Belief & National
Pride
TODAY
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Fourth Largest Economy in terms of Purchasing Power Parity...
Among the Top 5 Economies (PPP) 2005
Source: CIA
INDIA TOO LARGE TO BE IGNORED
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Expected to be the Third Largest in GDP by 2020
Already Fourth Largest Contributor towards Incremental global GDP Growth
(3.2%) after USA (21.6%), China (9.4%) & Japan(6.4%) in 2005
0 5,000 10,000 15,000 20,000 25,000
GDP (US$bn)
Russia
India
Mexico
Brazil
China
Canada
Italy
France
UK
Germany
Japan
US
India & China the Worlds Leading Emerging Economies
INDIA AN EMERGING ECONOMIC POWER HOUSE
Source: KPMG
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One of the Largest & Fastest Growing Consumer
Markets led by a rising Middle Class (400 Million
Strong)

Young India About 50% Population under 25 years
By 2050 share of Working Age Population (15-64
years) projected for China 52% & India 60%

Worlds Leading Knowledge Economy with highest
number of Qualified Engineers & among Largest Pool
of Skilled Labour, Scientists, IT Professionals &
Managers
INDIA ADVANTAGE- Demographics
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Global hub for Outsourcing of Services & Manufacturing
IT & BPOs key growth drivers
Indias rapid emergence as a factor in the global economy
offers huge opportunities for Global Investors
Total FDI inflows up 42% to USD 7.5 billion in 2005
USD 25 billion accretion to FOREX Reserves from
International Investors in current year
85% of FCCBs in Asia in current year from India
alone. 2 years ago it was only 2%
Indias Foreign Trade booming with a growth of 25-30%
with Exports crossing USD 100 billion
INDIA ADVANTAGE
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Demand Growth
for Paper among
Fastest in the
World


Share of Coated
Woodfree in
Printing/Writing
increasing rapidly

Corrugated Papers
are by far the
largest consumers
of Paper

Packaging Board
demand growth is
led by High-end
Bleached Boards
Total Demand 8.7 Mln. Tons
Excluding Newsprint-1.6 Mln. Tons
(2008-09)
High-End W/F (0.68 Mn T)
Coated Paper (0.25 MnT)
Splty. Paper (0.20 Mn. T)
Branded Cut-Size (0.17 Mn T)
Low-End W/F (1.40Mn. T)
Packaging Boards (1.20 Mn.T)
Corrugated Packaging
Papers (3.2 Mn. T)
Fact Sheet
Per capita consumption 8.5 Kgs
Double digit growth in Branded Cut-Size papers, Pkg.
Boards, Coated Papers
INDIAN PAPER MARKET A SNAPSHOT
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Indias Large domestic paper market experiencing rapid growth (7-8% compared to
5-6% in past) aided significantly through enhanced domestic supply/ capacity

Education - Governments High Priority Area(6% of GDP) another Key Growth
Driver
Massive investments in Printing Industry spurring Growth at a CAGR of over 14%
(Over 100,000 Printing Presses in 2005)
India Emerging as a Global Hub for High-Quality Printing at a competitive
cost
Strong Consumer Demand for Packaged goods fueling high growth in
Industrial grades of Paper & Boards largely led by growing disposable
incomes & Lifestyle changes
EMERGING TRENDS IN THE INDIAN PAPER MARKET
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Current - 2007
Projected - 2010
No. of Kraft Paper
M/C with 0.1 Mn T
Capacity

1

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Number of Mills with
Capacity of 0.1 Mn T

3

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Industry Striving to achieve International
Competitiveness through Scale A Large Number of
Significant Projects in pipeline
INDIAN PAPER INDUSTRY MOVING TOWARDS SCALE
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Other key sectors
Country Per Capita
Consumption
(Kg)
China 42
Indonesia 22
India 8.5
Thailand 51
Malaysia 106
Philippines 16
Vietnam 14
An increase in
consumption by one kg
per capita will lead to an
increase in demand in
excess of 1 million tons.
Source: Paperloop
Indias Low Per Capita Consumption offers a huge opportunity for consumption
growth
PER CAPITA CONSUMPTION
INDIA vs SELECT ASIAN COUNTRIES
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Other key sectors
An increase in
consumption by one kg
per capita will lead to an
increase in demand in
excess of 1.2 million
tons.
Source: ICCA
Indias Low Per Capita Consumption offers a huge opportunity for consumption
growth
PER CAPITA CONSUMPTION Corrugated Board
INDIA vs SELECT ASIAN COUNTRIES
Trends in Per Capita Corrugated Production in SE Asia and
- 2005 and 2010
Country
2005 2010

Population Corr.
Prodn.
Per Cap.
Corr.
Prod.
Popn Corr.
Prodn.
Per Cap.
Corr. Prod.

Mn Msm
Sq M
Mn Msm
Sq M
India
1093.6 3900 4 1184.1 6968 6
China 1275.6 25536 20 1310 35107 26.8
Indonesia
228.9 2172 9 243.0 2555 11
Malaysia
24.0 1176 49 26.1 1336 51
Pakistan
162.4 301 2 179.6 416 2
Philippines
87.9 1131 13 95.9 1443 15
Singapore
4.4 257 58 4.7 238 51
Thailand
64.2 2593 40 66.3 3121 47
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Indian Corrugated Industry in relation to Rest
Top 15 Countries 2005 by Area of Output

Production
2005
Forecast Growth 05 - 10
Country Msm Tonnes Msm Tonnes % p.a.
1 USA 39991 27157 2667 1811 1.3
2 China 25536 18598 16178 9571 10.3
3 Japan 13729 8770 473 206 0.7
4 Germany 7923 4051 672 237 1.6
5 Italy 6448 3829 851 471 2.5
6 France 5707 2967 397 165 1.4
7 Spain 4667 2645 789 368 3.2
8 UK 4324 2261 92 -64 0.4
9 Brazil 4005 2157 655 243 3.1
10 India 3900 2535 3068 1995 12.3
11 Canada 3485 1884 70 2 0.4
12 South Korea 3157 1834 684 288 4.0
13 Mexico 2922 1893 564 346 3.6
14 Thailand 2593 1669 528 241 8.6
15 Russia 2351 1322 1113 586 8.1
Others 35202 20504 7875 3863 4.1
46+ Total 163589 102755 35565 19743 4.0
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High Growth Economy

Increasing Spend on Education
IT Revolution

Growing Consumerism
Move towards Organized
Retailing

Move Towards Scale of
Production
Industry Consolidation

Competitive
Manpower
Cost
O
pportunities
Corrugated Packaging
Enormous
Domestic
Market
potential
Access to
International
Financing
Exports of
Boxes
Large Pool of
Technical
Personnel
INDIAN CORRUGATED PACKAGING INDUSTRY
A PARADIGM SHIFT
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Scarcity of Virgin
Fibre
(Wood Pulp)
High Energy
Cost
Customer
Emphasis on
HACCP /
ISO2200
Fragmented
Production
Operations
Lack of
Contemporary
Technology
Management of
Environmental
Issues
The biggest Industry Challenge is to Significantly raise the Per Capita Consumption
of Paper in India
CHALLENGES FOR THE INDIAN CORRUGATED INDUSTRY
VAT GST
Impact on
Business
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Fundamental Transformation in Investment Strategies of
Leading Industry Players led by Market Demand &
Competitiveness issues (Quality & Costs)

From Fragmented Production to Scale with Contemporary
Technology

From Manufacturing mind-set to Customer Centric

From Commodity to Branding

Large Scale Modernisation at user end- both in Printing &
Packaging

Focus on Value-Added Products

Increasing Retail consumption of Branded Products in
Rural India

From Domestic Markets to International Markets
INDUSTRY FOCUS
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