TINPLATE COMPANY OF

INDIA NEED FOR A

CONCEPTUAL FOCUS
Syndicate 5 :
Ria Agustriana 29111321 Agung
Mahendra 29111324 Rangga Tri
Raeros 29111314
Joseph Enrico 29111349
Karina Soedjati 29111309

Company Overview

Established in 1992
Produce tinplate
Using Tin Mill Black Plate (TMBP) for raw material
Jointly held by three companies
Burmah Shell
Shaw Wallace
Tata Steel

1997 TCIL establish a new cold rolling facility

TCIL supplied tinplate to manufacturers in four major segments :

Edible oil cans

Soft drink crowns
Processed food
Batteries

Tinplate product and Classification

Tinplate is a low carbon steel
Used primarily for packaging for any food or non-food

Prime Grade Tinplate

Secondary Grade Tinplate

Free from any visual defects

Used for food packaging
The customer had high-speed
can-making equipment

Banned for food packaging in a few

countries (carcinogenic)
Used for non-food
Unsuitable for battery jacket

Classification

Tinplate product Competition

Compete with other materials

Plastic
PET (polyethylene terephthalate)
Aluminum
Black plate
Tetra Pak
Paper

Foreign Tinplate Company

Fritz
Sukai
TMN

Domestic Tinplate Company

SAIL

SAIL did not compete directly with TCIL in any segment

Tinplate product Market

Tinplate market was 210,000 metric tons / annum

The domestic industry installed capacity of 240,000 metrics

tons / annum

TCIL produce about 60,000 metric tons / annum

TCIL production
SAIL production

imported tinplate

SAIL produce about 20,000 metric tons / annum

Both producers operated much below their installed capacity

Tinplate product Market

Market Size = 210,000 Metric tons (MT)
The market size is
dominant by Food
sector with 94%

6%

Non-food sector
Food sector
94%

Consumption of Tinplate
1%

Almost
consumption of
Tinplate were used for
Edible Oil

7%

5%
Edible Oil

17%

Processed Food
70%

Crown
Battery
Miscellaneus

Growth of Tinplate in Specific Segment 1993 to 1997

(in percentage) (from exhibit 4)
25

20

15

10

0
1993

1994
Battery

1995
Edible Oil

1996
Crown

Battery segment is in the growing stage

Edible Oil segment decreased slowly each year
Crown segment is steadily increase every year
Processed food segment having a slight increase

Precessed Food

1997

Market Share
(from exhibit 5)
Edible Oil Market Share

Battery Market Share

10%

18%

45%

28%

TCIL
TCIL

45%

UNORGANIZED SUPPLIER
54%

FRITZ
SUKAI

SAIL

Precessed Food Market Share

Crown Market Share

10%

22%

45%
TCIL
45%

TCIL

FRITZ
SUKAI

78%

TMN

Market Characteristics
Edible Oils
Bought directly by the edible oil manufacturers
The consumers bought in loose quantities
The products were not branded and highly price sensitive
Competition was largely from unorganized companies and
SAIL
Unorganized and small companies tended to use prohibited
imported tinplate
Consumers were unaware of the negative consequences of
using secondary tinplate as packaging material for food
products
Manufacturers are willing to waive the required specification

Market Characteristics
Soft Drink Crowns
Indian soft drink industry were dominated by
Coca-Cola and Pepsi
These brands demanded high standard crowns
The manufacturers puchased their requirements
from foreign companies such as Fritz, Sukai, and
TMN
Changing and sensitive needs of customers

Market Characteristics
Battery
Required high standard of tinplate quality
90% of the tinplate were bought from foreign companies
High profitability
Changing and sensitive needs of customers
Processed Food
Nestle and Brooke Bond bought 22% of their cans from
TCIL
The majority was owned by foreign companies
Changing and sensitive needs of customers

Imported Product
The secondary grade being imported under the low customs
tariff with a large portion
Usage of non food grade tinplate for food packaging in India
Consumers were unaware of the negative consequences of
non-food grade tinplate.
Indias low literacy level

Imported Product
CUSTOMS DUTY STRUCTURE ON TINPLATE IMPORTS (in percentage)
(from exhibit 1a)
120%

100%

80%

60%

40%

20%

0%
92-93

93-94

94-95
Tinplate Prime

Tinplate Secondaries

95-96

96-97

Imported Product
PRIME AND SECONDARY TINPLATE IMPORT (MT = in metric tons)
(from exhibit 1b)
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
92-93

93-94

94-95
Tinplate Prime

95-96

96-97

Tinplate Secondaried

97-98

98-99

TCIL and the Buying Behavior

TCIL was caught between the highly price sensitive lower-end
customer and the high-service expectations of the high-end
customers
The high-end customers have more favorable perception of
foreign companies
TCIL wasnt capable of responding to the changing and
sensitive needs of customers

Distribution and Promotion

TCIL factory in Jamshedpur India
Distributed its products through a network of 15 agents
throughout the country
Personal selling was the dominant promotion method used by
all companies in all segment.

Customer Satisfaction
(from exhibit 3)
Product
parameter
Temper
Size
Dimension
Battery Productivity
Service
Price
Delivery
Total Score

TCIL
2
2
2
3
3
5
3
20

Product
parameter
Price
Brightness
Edible Oil
Delivery
Service
Total Score

TCIL SAIL Unorganized

3
4
5
5
4
2
5
3
2
5
3
2
18
14
11

FRITZ
5
5
5
5
4
4
5
33

SUKAI
4
5
5
4
3
4
5
30

Average
3.6
4
4
4
3.3
4.3
4.3
27.6

Average
4
3.6
3.3
3.3
14.3

Battery :
For all parameter
except price, TCIL had
the lowest score
compared to its two
competitors

Edible Oil :
In this segment TCIL
has the highest score,
but the competitors
had better price

Customer Satisfaction
Product
parameter
Size
Soft Dimensional
Drink Price
Crowns Delivery
Temper
Total Score

TCIL
2
2
3
5
3
15

Product parameter
Delivery
Lacquer adhesion
Processed
Temper
Food
Price
Dimensional
Total Score

FRITZ
5
5
5
4
5
24

TCIL
5
4
3
5
3
20

SUKAI
5
5
5
4
5
24

TMN
4
5
5
4
5
23

SUKAI
4
4
4
4
4
20

Average
4
4
4.3
4.3
4.3
21

Average
4.3
4.3
4
4.3
4
21

Soft Drink :
TCIL is worse than the
competitors in all
parameter except
delivery

Processed Food :
TCILs delivery and
price is better than its
competitors, but
overall TMN has the
highest score

TCILs Costs by Segment

(from exhibit 6a)
TCIL'S COSTS BY SEGMENT
35,000

30,000

Axis Title

25,000

20,000

15,000

10,000

5,000

Total Cost
Profit

Battery
29,450
6,000

Edible Oil
22,900
3,000

Crown
26,950
3,000

Processed Food
28,200
5,500

Selling Prices of TCIL and Competitors

(in Indian Rupees per metric ton)
(from exhibit 6a)
50000
45000
40000
35000
30000

TCIL
SAIL

25000

FRITZ
SUKAI

20000

TMN
15000
10000
5000
0
Crowns

Battery

Processed foods

Edible oil

Standard Required for The

Food Sector
Mandatory to use prime tinplate

Free form defects food products no become carcinogenic

Can manufacturers for national brands followed BIS

Small scale manufacturer may not follow standard because of

price consideration
The lack of mechanism to monitor the standard of the tinplate
encouraged the use of secondary tinplate for food packaging

Buying Influences in Tinplate Purchases

(from exhibit 7)
Buying Centre Influences
Purchaser

Decision-maker

Influences

User

Battery

Purchaser

CEO

Production/
Marketing/
R&D

Production/
Quality Control

Edible Oil

Purchaser/
owner of the
edible oil/
vanaspati
company

CEO/ owner of the

edible oil/ vanaspati
company

Middleman/
Marketing

Production/
Quality Control

Crown

Purchaser

CEO

Production/
Marketing/
Quality Control

Production/
Quality Control

Processed
Food

Purchaser/
owner of the
company

CEO/ owner of the

company

Marketing/
Packaging
division/
Production/
Quality Control

Production/
Quality Control/
Packaging
division

The Problem
Should it continue in the edible oil segment?
How TCIL compete with foreign companies?
What strategies can TCIL formulate based on organizational
buying behavior concept?

Threats, Opportunities and Its

Implications in the Tinplate Industry
(from exhibit 2)
Threats

Implications

Lowering of customs tariff Global tinplate manufacturers compete aggresively

Household units
becoming smaller

Demand for smaller packaging with increased

buying frequency (tinplate manufacturers rely
heavily on bulk container units)

Regulating standards
lacking enforcement

Widespread use of defective tinplate

Opportunity trends

Implications

Growth in the hotel industry

Sustained demand for bulk packs

Political climate showing signs of

continuity in policies towards
industries

Survival of strongly focused, customeroriented companies

High industrial growth (9%)

Increased demand for branded/packed

products, the driving force would continue
to remain buoyant

SWOT Analysis
Strength

Weakness

The highest score of customer

satisfaction in Edible Oil segment
Capable to cater to the technical
requirements of the customer
High production capacity

Other segment like battery, soft drink

crown and processed food has the
lowest score in customer satisfaction
Operated much below their installed
capacity
Wasnt capable of responding to the
changing and sensitive needs of
customers

Threat

Opportunities

Compete with other tinplate producer

and other company product
The secondary tinplate grade being
imported in a large portion
Edible Oil segment decreased slowly
each year and highly price sensitive
Lack of tinplate standard control

Food sector is the biggest market size

of tinplate especially in Edible Oil
Processed food is the second
profitability segment and its only
compete with 1 competitor
Battery segment is in growing rapidly
and has high profitability

Solution
TCIL should continue in Edible Oil segment although it had the
smallest profitability and decreasing growth, but it had the
biggest market percentage, TCIL share in this segment is quite
large, and TCILs customer satisfaction in this segment is higher
than its competitors.
Recommendation for edible oil segment:
make smaller package for consumers
communicate the danger of using secondary tinplate for food
packaging
minimize cost and reduce the price to gain more customers
influence the influencer which is the middleman/marketing to
choose TCILs tinplate

Solution
To compete with foreign company TCIL should choose processed
food segment, because it already had 22% share and only had 1
competitor which is TMN, also has a high profitability
Battery segment also has a good prospect because of the high
growth and the highest profitability
Recommendation for processed food and battery segment:
improve the quality based on product parameter to increase
customer satisfaction
improve the ability of responding to the changing and sensitive
needs of customers
influence the influencer which is the Marketing/Packaging
division/Production/Quality Control for processed foods segment
and Production/ Marketing/ R&D for battery segment to choose
TCILs tinplate

Forecast Battery
1993
Battery segment
TCIL Share
TCIL Battery size
Battery profit
TCIL profit

Battery
Total (in Rs)

10000
10%
1,000
6,000
6,000,000

1993
5%
6,300,000

1994
8%
6,804,000

1995
10%
7,484,400

1996
1997
15%
20%
8,607,060 10,328,472

1998
1999
2000
2001
2002
22%
25%
27%
29%
31%
12,600,736 15,750,920 20,003,668 25,804,732 33,804,199

Forecast Edible Oil

1993
Oil segment
TCIL Share
TCIL Battery size
Edible Oil profit
TCIL profit

Edible Oil
Total (in Rs)

148000
28%
41,440
3,000
124,320,000

1993
7%
133,022,400

1994
1995
1996
1997
7%
6%
6%
5%
142,333,968 150,874,006 159,926,446 167,922,769

1998
1999
2000
2001
2002
6%
7%
7%
8%
9%
177,998,135 190,458,004 203,790,065 220,093,270 239,901,664

Forecast Crown
1993
Crown segment
TCIL Share
TCIL crown size
Crown profit
TCIL profit

Crown
Total (in Rs)

15000
10%
1,500
3,000
4,500,000

1993
9%
4,905,000

1994
10%
5,395,500

1995
12%
6,042,960

1996
12%
6,768,115

1997
15%
7,783,332

1998
1999
2000
2001
2002
17%
17%
18%
19%
20%
9,106,499 10,654,604 12,572,433 14,961,195 17,953,434

Forecast Processed Food

1993

Food segment
TCIL Share
TCIL Food size
Processed Food profit
TCIL profit

Processed Food
Total (in Rs)

35000
22%
7,700
3,000
23,100,000

1993
8%
24,948,000

1994
1995
1996
1997
7%
8%
9%
10%
26,694,360 28,829,909 31,424,601 34,567,061

1998
1999
2000
2001
2002
11%
11%
12%
13%
14%
38,369,437 42,590,075 47,700,884 53,901,999 61,448,279