Contents

IX

Inter-producer comparison Section 9.0 Tables 9.1 9.2 9.3 9.4 Inter-producer comparison: Financials Inter-producer comparison: Costs Inter-producer comparison: Operational parameters Inter-producer comparison: Marketing and distribution 2 4 6 10 Inter-producer comparison 2

CRIS INFAC PAPER ANNUAL REVIEW: INTER-PRODUCER COMPARISON, SEPTEMBER 2001, 11 PAGES

Inter-producer comparison

Chapter 9.0 This chapter compares the large paper companies, based on their operational and financial parameters. Operational parameters have been further divided into costs, and marketing and distibution related parameters. The operating efficiency of a company depends on its capacity, plant location, availability of raw material and power, its distribution network and product portfolio. Companies, such as BILT, JK, TNPL , ITC BPL and APPM, have an advantage with respect to most of these parameters. Small companies, such as Pudumjee, have also benefitted due to their focus on speciality paper.

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Inter-producer comparison
9.0

Inter-producer comparison: Financials

(Rs million) Year Months Income and expenditure Sales Other income Non-recurring income Change in stock Raw materials, stores, etc. Wages & salaries Energy (power & fuel) Excise duties Other expenditure Non-recurring expenses PBDIT Interest PBDT Depreciation PBT Tax provision PAT Assets Gross fixed assets Net fixed assets Investments Inventories Receivables Sundry debtors Cash and bank balance Liabilities Equity capital Net worth Total borrowings Current liabilities Provisions 113 1,360 360 767 28 597 8,087 8,790 2,888 648 930 9,434 10,400 3,139 79 877 3,881 4,089 739 524 496 5,487 14,954 1,516 80 2,213 1,236 460 531 191 47 21,492 16,216 1,343 1,322 1,166 367 29,936 18,728 143 3,405 2,674 447 8,502 6,725 463 976 562 2 20,152 15,190 2,990 987 2,528 1,564 229 382 133 249 89 159 31 128 2,512 1,346 1,165 569 596 596 3,146 2,055 1,091 743 348 3 345 847 769 78 400 (321) -321 603 1,681 (1,077) 618 (1,695) (1,695) 2,702 62 15 (27) 1,052 323 374 335 310 14,464 230 28 93 5,079 1,001 3,814 832 1,335 23,853 914 532 (102) 7,761 2,536 5,278 2,628 2,989 4,711 104 108 152 2,485 248 410 516 51 (224) 1,878 486 1,181 1,008 1,171 6,300 251 APPM Mar-00 12 BILT Century Jun-00 12 12 Mar-00 Mar-00 12

Table 9.1
I T C J K Corp Mysore Orient Mar-99 Mar-00 Mar-00 12 12 3,434 182 66 37 1,346 461 870 61 576 199 85 115 98 17 17 6,011 2,857 6 1,368 268 119 1,175 1,479 1,926 1,450 37 12 5,868 44 191 3 2,056 618 933 711 1,041 359 659 (299) 236 (535) 0 -535 6,417 3,633 193 769 1,058 256 148 339 3,830 1,453 19

Continued...

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...continued

(Rs million) Year Months Income and expenditure Sales Other income Non-recurring income Change in stock Raw materials, stores, etc. Wages & salaries Energy (power & fuel) Excise duties Other expenditure Non-recurring expenses PBDIT Interest PBDT Depreciation PBT Tax provision PAT Assets Gross fixed assets Net fixed assets Investments Inventories Receivables Sundry debtors Cash and bank balance Liabilities Equity capital Net worth Total borrowings Current liabilities Provisions
1

Pudumjee 12 1,310 50 25 4 531 106 168 137 80 309 142 167 79 87 3 84 1,907 1,340 60 316 213 27 82 1,127 898 181 45

Rama Seshasayee Sirpur 12 983 4 6 (32) 474 36 200 2 158 144 241 (98) 124 (222) (222) 6,200 5,709 0 383 158 23 1,871 1,425 4,019 945 7 12 1,855 32 1 23 565 236 460 135 201 266 95 171 113 58 6 52 2,864 1,923 167 206 192 93 113 728 1,352 518 17 243 29 83 651 338 271 17 12 1,569 65 54 (16) 562 305 267 190 33 238 88 151 40 111 8 103 3,496 1,652 23 187

Star 12 1,651 34 4 (75) 628 184 290 208 456 (12) 152 (163) 49 (211) (211) 2,303 1,743 194 217 103 62 156 596 875 343 122

TNPL Westcoast Mar-00 12 4,972 121 0 (40) 1,253 372 1,111 1,142 1,254 597 657 473 184 22 163 10,958 6,934 11 1,135 1,027 94 688 4,307 3,783 932 153 Mar-00 12 3,758 34 20 (61) 1,682 403 500 432 363 454 168 285 97 188 36 152 1,634 939 253 528 436 40 89 825 494 731 -

Average1

Mar-00 Mar-00

Mar-00 Mar-00 Mar-00

2,694 69 30 (3) 1,058 267 465 201 337 408 247 161 156 5 11 (6) 4,609 3,106 164 585 339 53 525 1,638 1,814 688 95

Exclude Bilt, Century, JK Corp and Orient due to other businesses

Compiled by CRIS INFAC

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Inter-producer comparison : Costs

APPM Year Raw material Wood/Bamboo Quantity Value Rs per tonne Pulp Quantitty Value Rs per tonne Waste paper Quantitty Value Rs per tonne Bagasse Quantitty Value Rs per tonne Other agri-wastes Quantitty Value Rs per tonne Realisation Excise duty Net realisation Wood Pulp Waste paper
1

Table 9.2
I T C J K Corp Mar-00 Mar-99 Mysore Mar-00 Orient Pudumjee Mar-00 Mar-00 Rama Seshasayee Mar-00 Mar-00 Sirpur Mar-00 Star Mar-00 TNPL Westcoast Mar-00 Mar-00 Average

4
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BILT Jun-00

Century Mar-00

Mar-00

240,357 469 1,950 1,927 40 20,965 28,359 3,554 24,805 4,970 428

1,101,627 1,945 1,765 8,797 167 19,018 29,636 36 1,205 32,709 4,512 28,197 7,520 647 -

185,190 559 3,019 8,976 221 24,599 495 9 17,576 456,383 500 1,096 13,730 18 1,282 28,560 3,939 24,621 4,976 1,965 77

160,302 396 2,472 115,915 1,065 9,185 26,014 2,804 23,210 2,155 5,789

174,970 328 1,874 481 11 23,077 37,152 5,667 31,485 5,685 192 -

184,351 266 1,441 16,856 301 17,839 21,282 626 20,656 2,741 3,103 -

181,368 491 2,707 312 10 31,090 27,434 3,784 23,650 6,942 137 -

15,962 342 21,413 5,872 54 9,179 14,854 10 693 52,457 3,771 48,686 9,444 1,489

1,546 16 10,217 99,584 557 5,588 20,361 21 20,339 224 7,886

76,053 184 2,425 217 5 22,120 1,382 21 14,978 81,901 132 1,613 29,924 2,245 27,678 3,071 80 345

126,135 277 2,195 203 5 26,601 6,856 29 4,186 26,391 3,234 23,157 4,706 92 488

193,722 419 2,163 599 9 14,524 26,851 3,554 23,297 7,157 149

184,297 192 1,040 23,791 435 18,272 561,662 584 1,040 27,559 27,559 1,071 2,430 -

257,006 440 1,714 89,737 267 2,970 26,256 3,838 22,417 3,914 2,368 191 29,379 2,968 26,411 3,922 1,477 1,281
Continued...

1,769

15,515

7,399

342

Rs per tonnes of paper/newsprint

CRIS INFAC PAPER ANNUAL REVIEW: INTER PRODUCER COMPARISON, SEPTEMBER 2001, 11 PAGES

...continued

APPM Bagasse Other agri-waste RM RM/Sales (per cent) Power and fuel Power/Sales (per cent) Operating cost Contribution Operating cost 5,398 22 2,991 12 8,389 16,416 Lower Efficient use of raw material.

BILT Century 138 8,304 29 2,620 9 10,924 17,273 Average 4,453 157 11,629 47 1,802 7 13,430 11,190 Higher Higher cost of wood.

ITC 7,944 34 1,300 6 9,244 13,967 Higher use of imported waste paper.

J K Corp Mysore 5,877 19 3,827 12 9,704 21,780 Higher 5,844 28 6,519 32 12,362 8,294 Higher Higher power.

Orient Pudumjee 7,079 30 2,458 10 9,537 14,113 Higher Higher cost of wood. 285 11,217 23 5,558 11 16,776 31,910 Higher Superior quality of paper.

Rama Seshasayee 8,110 40 4,991 25 13,100 7,239 Higher on imported waste paper. 2,200 5,696 21 5,793 21 11,489 16,189 Higher

Sirpur 5,286 23 2,226 10 7,511 15,646 Lower Lowest cost of power.

Star 7,305 31 3,821 16 11,126 12,170 Higher

TNPL Westcoast Average 3,265 6,767 25 3,077 11 9,844 17,715 Lower landed cost of wood and bagasse. 6,282 28 2,537 11 8,819 13,598 Lower Lowest cost of pulp. 785 23 7,338 29 3,537 14 10,875 15,536

Increased Superior paper.

Dependence Higher cost power.

Inefficient Lowest wood.

quality of cost of

of purchased per unit use of

Compiled by CRIS INFAC

Inter-producer comparison: Operational parameters

APPM Operational parameters Plant details Number of factories Plant location states Capacity Production Utilisation Sales quantity Share of paper sales Sales Capacity utilisation Better utilisation at around 90 per cent 1 AP 98,500 94,334 95.8 95,281 100 2,702 Higher utilisation at more than 100 per cent 5 Har,Mah, Orr 251,568 258,632 102.8 261,480 59 8,553 Better utilisation at around 90 per cent 1 UP 121,850 112,342 92.2 115,851 14 3,309 Higher utilisation at around 100 per cent 1 AP 182,500 183,908 100.8 179,715 99 4,675 Lower utilisation due to closure of plant for part of year Power and fuel Unit cost (Rs/kwh) Per unit consumption Capitve power (per cent) Captive power 1.84 1,628 78.4 Self-sufficient Higher usage of power per tonne of paper. 1.82 1,436 89.8 Self-sufficient 1.18 1,526 95.3 Self-sufficient Higher usage of power per tonne of paper. 1.12 1,165 94.7 Self-sufficient Self-sufficient Higher usage of power per tonne of paper. 1.99 1,921 76 However, cost of purchased power is very high. 3.03 2,149 68.8 Self-sufficient Inefficient usage of power. 1.42 1,734 99.1 Self-sufficient 1 Orr 90,000 57,678 64.1 62,083 37 2,307 Better utilisation at around 90 per cent 1 Kar 105,000 96,910 92.3 102,662 64 2,185 Lower utilisation due to closure of Brajrajnagar paper plant in 1999-00 0 MP, Orr 171,000 70,727 41.4 70,895 33 1,945 BILT Century ITC J K Corp Mysore Orient

Table 9.3
Pudumjee

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1 Mah 38,500 36,194 94.0 23,848 95 1,251 Better utilisation at around 90 per cent

2.41 2,310 88.0 Self-sufficient Inefficient usage of power.

Continued...

CRIS INFAC PAPER ANNUAL REVIEW: INTER PRODUCER COMPARISON, SEPTEMBER 2001, 11 PAGES

...continued

APPM Future plan Expansion/Modernisation plans Plans to undertake mill development for improving operating efficiency. Backward integration Undertaking afforestation program through farmers to reduce dependence on purchased

BILT Increase existing capacity by debottlenecking.

Century -

ITC -

J K Corp -

Mysore -

Orient -

Pudumjee Commence captive power plant to reduce dependence on purchased power.

Merged group company Andhra Pradesh Rayon which manufactured RWGP. Now plans to convert that facility to manufacture paper grade pulp.

Undertaking afforestation program through farmers to reduce dependence on purchased

continued...

...continued

8
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Rama Operational parameters Plant details Number of factories Plant location states Capacity Production Utilisation Sales quantity Share of paper sales Sales Capacity utilisation Lower capacity utilisation at around 54 per cent Power and fuel Unit cost (Rs/kwh) Per unit consumption Capitve power (per cent) Captive power 3.65 1,368 70.5 Self-sufficient 1 Guj 132,000 70,570 53.5 48,263 100 983

Seshasayee

Sirpur

Star

TNPL

Westcoast

Average

1 TN 60,000 60,042 100.1 57,530 93 1,722 Full capacity utilisation Stable capacity utilisation

1 AP 71,100 58,839 82.8 59,224 100 1,563 Higher utilisation at 127 per cent

1 UP 46,200 58,547 126.7 61,115 99 1,641

1 TN 180,000 178,871 99.4 178,764 99 4,927 Full capacity utilisation Better utilisation at around 90 per cent

1 Kar 119,750 112,521 94.0 116,035 81 3,047

1 119,141 103,580 86.9 102,339 77 2,915

3.17 1,829 36.2 Dependent on purchased power. Higher usage of power per tonne of paper.

1.24 1,798 99.1 Self-sufficient Higher usage of power per tonne of paper.

2.83 1,348 82.9 Self-sufficient

1.91 1,610 84.2 Self-sufficient Higher usage of power due to production of newsprint.

1.98 1,281 92.5 Self-sufficient Most efficient power consumption among wood based mills.

2.11 1,650 82.5

continued...

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...continued

Rama Future plan Expansion/Modernisation plans Plans to manufacture writing and printing paper, and LWC on machine with a capacity of 70,000 tpa. Backward integration -

Seshasayee Installed an imported old machine with a capacity of 55,000 tpa to manufacture writing and printing paper. -

Sirpur Plans to increase capacity by installing a new machine with a capacity of 20,000 tpa.

Star

TNPL Plans to increase capacity by 20,000 tpa through modernisation. Plans to set up a captive power plant.

Westcoast Plans to install a new duplex board machine with a capacity of around 45,000 tpa.

Average -

Undertaking afforestation program through farmers for reducing dependence on purchased wood.

Undertaking afforestation program through farmers to reduce dependence on purchased wood.

Compiled by CRIS INFAC

Inter-producer comparison : Marketing and distribution

APPM Marketing Distribution Distributed thorugh nearly 70 dealers. Distributed through authorised (Nearly 70-80 authorised wholesalers in India.) Marketing strategy Well placed in maplitho and MG board. Product portfolio highly well diversified. Market leader in segments, superior maplitho paper and sack kraft paper. Has entered into higher growth segments, such as copier and coated duplex board. Plans to improve the quality of coated paper/board in the near future. Major player in lower maplitho and creamwove paper. Distributed through wholesalers. For industrial paper, through dealers and direct sales. For writing and printing paper, thorough non-exclusive dealers. Leader in duplex board. Plans to enter into value added segments, such as tetra packs for future growth. Market leader in copier paper. Second largest player in the maplitho segment. Product quality is perceived as premium grade in the market. Plans to improve its quality, and command a premium in the market, rather than compete for increasing its market share. Likely to face competition in the copier paper segment due to the entry of many new players. Product portfolio (1999-2000 E) Creamwove Maplitho Coated paper/board MG Varieties Duplex, other board Kraft Specialty Total 27.98 35.09 25.23 11.47 0.23 100.00 15.88 48.74 7.31 10.01 15.16 2.89 100.00 64.06 34.67 1.21 0.06 100.00 0.31 17.09 0.32 2.58 67.14 12.55 100.00 27.88 51.54 0.10 19.15 1.34 100.00 66.86 8.21 3.21 0.00 19.26 2.45 100.00 Major player in the creamwove segment. Distributed through authorised wholesalers. Distributed through wholesalers. BILT Century ITC J K Corp Mysore

Table 9.4
Orient Distribute products agents. Mainly focus on the eastern and northern regions.

non-exclusive distribiution

non-exclusive through

non-exclusive wholesalers.

Major player in continuous computer stationery. segment Focus on higher margin varieties, such as tissue, for future growth.

such as bond, quality

44.03 20.12 6.86 10.97 17.29 0.73 100.00

Continued...

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...continued

Pudumjee Marketing Distribution Distribute kraft and MG varities through dealers. Speciality variety is manufactured as per orders. Marketing strategy Plans to increase its presence in the speciality Plans to export kraft paper to Kimberly Clark.

Rama Distribute writing and through distributors. Newsprint is marketed directly to publishers. Plans to manufacture writing and printing

Seshasayee Distributed through dealers. Major sales from the southern region.

Sinar Mas Distributed through authorised wholesalers.

Sirpur Distributed through dealers.

Star Distributed through dealers.

TNPL Writing and printing distributed through non-exlusive dealers. Newsprint is directly marketed to

Westcoast Distributed exclusively through 100 authorised dealers.

printing paper non-exlusive

non-exclusivenon-exlusive paper

New capacity for pigmented paper, which is used an

Increase the prices of paper with an improvement coated paper. Concentrate on art paper and art board market to replace imported paper. In 2000-01, nearly 90 per cent of the production would be of the coated variety.

Plans to market stationery products in increase realisations.

Leader in

Plans to

Plans to install new machines for duplex board. focus on speciality grades.

wood based increase kraft paper. market share in the copier with the installation of cuttting facilities. Leader in computer stationery, with a market share of over 50 per cent.

grade segment. paper on

in the quality of order to

paper segment Increasing

new machines. alternative Also, plans to to LWC manufacture LWC paper. paper

Product portfolio (1999-2000 E) Creamwove Maplitho Coated paper/ board MG Varieties Duplex, other board Kraft Specialty Total E: Estimate Compiled by CRIS INFAC 32.02 46.22 100.00 100.00 11.49 100.00 100.00 0.71 2.67 100.00 41.30 100.00 100.00 1.66 3.17 100.00 18.77 1.76 2.83 29.14 22.37 27.29 7.80 0.00 21.76 100.00 36.51 31.46 40.00 60.00 22.94 41.71 0.91 35.42 54.35 45.65 18.87 41.21 -

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