A Project Report on A Study on Distribution channel At BILT Graphics Paper Product Limited Unit Ballarshah

Project Report Submitted in partial fulfilment of Requirement for the award of degree of Master of Business Administration To PUNE UNIVERSITY Submitted by Mr. SAROJ S. NISHAD MBA (MARKETING) (2011-2013) Under the guidance of Mrs. . Dept. of MBA

DNYANSAGAR INSTITUTE OF MANAGEMENT AND RESEARCH,BANNER ,BALEWADI, PUNE-411045

DECLARATION

I, hereby declare that, the project report titled A Study on Distribution Channel is an original and authentic work done by me. This Project is being submitted in partial fulfilment for award of degree of MBA from Matrix Business School This content of this report is based on the information collected by me during my tenure at of BILT Graphics Paper Product Limited at ballarpur district chandrapur, maharashtra for two month of training from 02nd May to 22rd July 2012.

Place: Pune Date: 22nd July 2012

Mr. SAROJ S. NISHAD Master of Business Administration (Marketing)

Ballarpur Industries Ltd. First India Place, Tower C, Mehrauli-Gurgaon Road, Gurgaon, Haryana-122 002, Tel: 0124-256 0026/ 280 4242/ 4243 Fax: 0124-280 4260 Email: rrvedera@bilt.com Website: www.bilt.com

ACKNOWLEDGEMENT A large number of individual contributed to this project. I am thankful to all of them for their help and encouragement. My writing in this project report has also been influenced by a number of website and standard text books. As far as possible, they have been fully acknowledged at the appropriate place. I express my gratitude to all of them. The last 8-weeks with BILT Graphic Paper Products Limited (B.G.P.P.L.), Ballarpur has been full of learning and sense of contribution towards the organization. First of all I owe my heartfelt gratitude to my mentor Mr. Jayant Linge (Dy-Manager, MSD) for his noble guidance throughout the completion of the Project job in timely and also sparing his valuable time and extending all necessary support for the same. I would like to extend my heartfelt thanks to my guide Mr. Vishal V. Parshurame and Mr. Shambhu Kumar Karn for giving me an opportunity to work on this project at BILT GRAPHIC PAPER PRODUCTS LIMITED, BALLARPUR. I also express my deepest gratitude to Mr. Shekhar Sonar, (ManagerMSD) for their kind support, inspiration, encouragement and giving the freedom to complete the project.

Mr. SAROJ S. NISHAD

1. EXECUTIVE SUMMARY The competitive and global nature of todays business environment dictates that this direction and transformation takes place in a way that is efficient and effective as possible. Continuing emphasis on time, cost and quality improvements have sharpened the need to coordinate and cooperate with trading partners around the world to achieve results that allow customers to be successful. Thus distribution channel focuses on the integration of activities across several companies to manage the flow of products, services, people, equipment, facilities and other resources. The report gives an overview of the Indian Paper manufacturing Industry, its major players, growth and outlook. This report also provide ample of information regarding BILT Graphic Paper Product Ltd. (BGPPL), the Conglomerate AVANTA Group of which BILT is a Strategic Business Unit. This report provides an analysis of the internal as well as external situation of BILT in the form of SWOT Analysis and PORTERS FIVE FORCES Model. Task involves studying the sales and distribution pattern. Comparative study of different brands of paper in BGPPL and study of the sales trend comparison with the different product of competitors in market. To study the shipment of goods (Paper) to the different zones and also to optimize the shipment to streamline the distribution process so as to make sure that the product is delivered to business consumer. Methodology adopted will be studying the process, collecting information on problems occurred through secondary database and analysing through help of experience survey, collecting primary information from onsite officials and with their help doing onsite experiment, and further using different technique to improve the process while moving forward with the task. The learnings will be understanding the organization structure, gaining an overview of work performed in all the other department, learning the distribution channel which makes sure that the value is delivered to the customer, understanding the sales of different paper products in BGPPL.

INDRODUCTION
Place, Distribution, Channel, or Intermediary. A channel of distribution comprises a set of institutions which perform all of the activities utilized to move a product and its title from production to consumption. Bucklin - Theory of Distribution Channel Structure (1966) Another element of Neil H.Borden's Marketing Mix is Place. Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. There are six basic 'channel' decisions: Do we use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a wholesaler) Single or multiple channels Cumulative length of the multiple channels Types of intermediary (see later) Number of intermediaries at each level (e.g. how many retailers in Southern Spain). Which companies as intermediaries to avoid 'intrachannel conflict' (i.e. infighting between local distributors)

Selection Consideration - how do we decide upon a distributor? Market segment - the distributor must be familiar with your target consumer and segment. Changes during the product life cycle - different channels can be exploited at different points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold via a few specific stores. Producer - distributor fit - Is there a match between their polices, strategies, image, and yours? Look for 'synergy'. Qualification assessment - establish the experience and track record of your intermediary. How much training and support will your distributor require? Types of Channel Intermediaries. There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. The main modes of distribution will be looked at in more detail.

1. Channel Intermediaries - Wholesalers

They break down 'bulk' into smaller packages for resale by a retailer. They buy from producers and resell to retailers. They take ownership or 'title' to goods whereas agents do not (see below).

They provide storage facilities. For example, cheese manufacturers seldom wait for their product to mature. They sell on to a wholesaler that will store it and eventually resell to a retailer.

Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service costs, or sales force costs.

A wholesaler will often take on the some of the marketing responsibilities. Many produce their own brochures and use their own telesales operations.

2. Channel Intermediaries - Agents

Agents are mainly used in international markets. An agent will typically secure an order for a producer and will take a commission. They do not tend to take title to the goods. This means that capital is not tied up in goods. However, a 'stockist agent' will hold consignment stock (i.e. will store the stock, but the title will remain with the producer. This approach is used where goods need to get into a market soon after the order is placed e.g. foodstuffs).

Agents can be very expensive to train. They are difficult to keep control of due to the physical distances involved. They are difficult to motivate.

3. Channel Intermediaries - Retailers

Retailers will have a much stronger personal relationship with the consumer. The retailer will hold several other brands and products. A consumer will expect to be exposed to many products.
7

Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel agents.

Products and services are promoted and merchandised by the retailer. The retailer will give the final selling price to the product. Retailers often have a strong 'brand' themselves e.g. Ross and Wall-Mart in the USA, and Alisuper, Modelo, and Jumbo in Portugal.

4. Channel Intermediaries - Internet

The Internet has a geographically disperse market. The main benefit of the Internet is that niche products reach a wider audience e.g. Scottish Salmon direct from an Inverness fishery.

There are low barriers low barriers to entry as set up costs are low. Use e-commerce technology (for payment, shopping software, etc) There is a paradigm shift in commerce and consumption which benefits distribution via the Internet

Reason for Selection of Topic

The study is very significant to understand the distribution channels. The study is important to know the distributer satisfaction level for the distributorship. The study is important to know the distributer satisfaction level in the price of the paper. The study is important to know the distributers preference for the quality. The study is very important to know the sales volume. The study is also analyses the effective media for improving the sales. The study is important to know availability of the paper. The study is important to know margins in the paper industries.

2. PAPER INDUSTRY OVERVIEW 2.1) Global Paper Industry Overview: The total consumption of paper globally in 2009 was estimated as 364.0 million tonnes. Asia contributed the maximum to this consumption pattern with a total consumption of 155.7 million tonnes, followed by Europe and North America at 93.5 and 78.1 million tonnes respectively. The global paper and paperboard industry is dominated by North America, Europe and Asia. Global paper and paperboard production stood at around 380 million tons in 2008, the US leading with over 100 million tons and accounting for nearly a third of the worlds production. With a large number of paper production capacities shutting down in North America and growing capacity creation in Asia (especially China), the latter accounts for over a third of global paper production, while Europe and North America account for about 30% and 25% respectively. Interestingly, even as per capita paper consumption in the US is 300 kg, it is 35 kg in Asia, implying excellent growth prospects. Paper demand is unevenly distributed as 72% of the worlds paper is consumed by 22% of the worlds population in the US, Europe and Japan. The world demand for the material is expected to grow by around 3% annually, reaching an estimated 490 million tons by 2020, with significant growth coming out of Asia and Eastern Europe. Asia dominates the demand for paper and paperboard; consumption increased at a CAGR of 7% across 2003-08. China is now the worlds secondlargest household paper consuming nation.

10

Table 1 below describes the patterns for world consumption of paper since 2004:

Per Capita Consumption of Paper in World: India consumed only about 3% of global paper production. As can be seen from Table 2 below, Indias per capita consumption of paper averaged around 8.4 kgs in 2009, as compared to a global average of 54.3 kgs (Source: CRISIL Research

11

2.2) Indian Paper Industry Overview: The Indian Paper Industry accounts for about 1.6% of the worlds production of paper and paperboard. The estimated turnover of the industry is Rs 25,000 crore (USD 5.95 billion) approximately and its contribution to the exchequer is around Rs. 2918 crore (USD 0.69 billion). The industry provides employment to more than 0.12 million people directly and 0.34 million people indirectly. The industry was delicenced effective from July, 1997 by the Government of India; foreign participation is permissible. Most of the paper mills are in existence for a long time and hence present technologies fall in a wide spectrum ranging from oldest to the most modern. The mills use a variety of raw material viz. wood, bamboo, recycled fibre, bagasse, wheat straw, rice husk, etc.; approximately 35% are based on chemical pulp, 44% on recycled fibre and 21% on agro-residues. The geographical spread of the industry as well as market is mainly responsible for regional balance of production and consumption. With added capacity of approximately 0.8 million tons during 2007-08 the operating capacity of the industry currently stands at 9.3 million tons. During this fiscal year, domestic production of paper and paperboard is estimated to be 7.6 million tons. As per industry guesstimates, over all paper consumption (including newsprint) has now touched 8.86 million tons and per capita consumption is pegged at 8.3 kg. Demand of paper has been hovering around 8% for some time. During the period 2002-07 while newsprint registered a growth of 13%, Writing & Printing, Containerboard, Cartonboard and others registered growth of 5%, 11%, 9% and 1% respectively. So far, the growth in paper industry has mirrored the growth in GDP and has grown on an average 6-7 per cent over the last few years. India is the fastest growing market for paper globally and it presents an exciting scenario; paper consumption is poised for a big leap forward in sync with the economic growth and is estimated to touch 13.95 million tons by 2015-16. The futuristic view is that growth in paper consumption would be in multiples of GDP and hence an increase in consumption by one kg per capita would lead to an increase in
12

demand of 1 million tons. As per industry estimates, paper production are likely to grow at a CAGR of 8.4% while paper consumption will grow at a CAGR of 9% till 2012-13. The import of pulp & paper products is likely to show a growing trend. Foreign funds interest in the Indian paper sector is growing. IFC, the investment arm of the World Bank is already associated with at least three of the IPMA member mills Agro Forestry In India, the paper industry is primarily rural based with close linkages with farming community. Over the years it has evolved into an agro-based industry from its earlier character of a forest-based industry Wood requirement of paper Industry: Currently Indian paper industry is consuming only about 7 million MT or about 3% of the total wood consumed in India; about 90% is consumed as fuel wood. Additional raw material requirement by 2012-13 is anticipated to be about 8 million tons of wood which will be about 6% of total consumption of the country. This would require afforesting 2 million Ha of land mass to maintain proper ecological balance. Myth and The Reality: While all-pervading myth that continues to slur the image of the industry is that it perpetually uses forest raw material and consequently denudes natural forests of the country, the truth is that over the last decade, industry led farm/social forestry have brought around 0.25 million hectares under pulp wood plantations, mainly degraded marginal lands of farmers. At the current estimate, wood based segment of the industry uses 80 per cent of the total requirement from farm produced wood. In particular, IPMA member mills have been actively promoting agro forestry with private land holders/farmers to meet imminent raw material needs in a sustainable manner thereby, positively impacting the Greening India mission of the Government. Also, the industry initiative has created major employment in the remote areas in close proximity to the manufacturing facilities thereby, helping rural development.
13

Global Scenario: Globally, paper industry has realized a linkage between production of paper and the farming community thereby infusing huge capital in agricultural economy. The USA, Latin America, Scandinavian countries, Australia, Japan and neighbouring Asian countries viz. China, Indonesia etc. all have been quick to create conducive land use/forestry policies to encourage large-scale production plantations and attract mega investments in pulp and paper/paperboard manufacturing and in the process creating millions of jobs. India Imperative: In order to replicate success stories of major global players in the field of Production/ Industrial Plantation, IPMA continues to advocate for at least 2% access to degraded forestland on lease. It is IPMAs firm belief that besides facilitation of social/farm forestry on private/revenue waste lands, if paper mills are permitted to grow pulpable wood in the radius of 150 to 200 KMs to their facilities on the available degraded forest land as well, it would hugely help mills to achieve cost competitiveness in terms of wood and freight and would also, help generate employment, create wealth for the rural poor and lend protection to environment. In this context, IPMA has pleaded for adoption of Multi Stakeholder Partnership (MSP) model recently propounded by MoEF for afforestation of degraded land. Issues and Concerns The Indian paper and paperboards industry has potential and also capabilities to service the growing demand in domestic and international market and also to create huge employment avenues in the rural-India through agro/production forestry and at mills, provided the competitiveness of the value chain is encouraged by the government. Major Deterrent Fibre Deficiency Wood: Indias wood resources are limited therefore; cost of wood is much higher in global comparison. Since there is conspicuous absence of Governments enabling policies favouring industrial/production plantation, securing future wood supplies will be Industrys biggest challenge. Wood based segment of the paper industry
14

meets its current wood requirements mainly through social/farm forestry and supplements with purchases made from the State Forest Development Corporations.

Bagasse/ Straw: Though annual availability of agro residues is large yet, this may not be able to sustain the future growth of the Industry, taking due account of quality of paper required, environmental issues involved, etc. Moreover, bagasse is increasingly used by sugar mills for co-generation of power and no more easily available to the paper mills as raw material.

Waste Paper: Recovered fibre consumption is going up globally. In India about 850,000-1,000,000 tons of waste paper is being currently recovered annually. The recovery rate works out to about 20% which is much lower in comparison with 65% recovery achieved by many global players. Low recovery is on account of alternate use of paper in wrapping, packing, etc. The utilization rate of recovered fibre is only 47%. Paper mills are heavily dependent on imported waste paper which commands exorbitant price due to inadequate availability. India needs a well-defined and aggressive system for collection, sorting, grading and utilization recyclable waste paper to contain imports.

Energy Cost: The Government of India has recently withdrawn core sector status hitherto enjoyed by the paper industry. Cost of coal is escalating and prospect of availability of quality coal is diminishing. The imported coal price (Indonesian Origin GCV 6000Kcal/Kg) had crossed USD 100/MT; such steep price rise had resulted in escalation of cost of production of those mills which happened to be dependent on imported coal for generation of steam/power. Also, power purchased from the grid is proving expensive for the industry.

Certification: Forest stewardship council certification is becoming a non-trade barrier for Indian paper companies. As bulk of the raw material is obtained from farm and agro- forestry, IPMA is of the view that it would not be practical for huge number of farmers involved in social/farm forestry to group and obtain the FSC
15

certificate for their produce. Though the farm forestry is a sustainable model promoted by the paper industry, the FSC principles and criterions are difficult to satisfy. IPMA is monitoring the move set afoot by the Government of India to establish Indian Forest Stewardship Council to help the process of certification.

Developmental Challenges

Enhancing Industrys competitiveness to face global competition Economies of scale De-fragmentation of industry Modernization of mills Building new capacities Meeting incremental demand of paper Productivity/quality improvement
16

Creation of robust raw material base Environmental upgradation and green technologies Setting mechanism for collection, sorting, grading and utilisation of recyclable waste paper

Variety wise Production Printing & Writing paper accounts for a bulk (more than 60%) of total paper/board produced by IPMA members. Other significant varieties are corrugated paper/board and packaging paper. Presented here is respective share of different varieties of paper/paperboard produced by IPMA members over the years in graphical format

Varietywise Production %age (2004-05)

2% 12% P & W Paper Pkg. Paper 17% 65% Ctd. Paper/Board Speciality Paper Misc. Varities 4%

17

Varietrwise Production %age (2005-06)

2% 17% P & W Paper Pkg. Paper Ctd. Paper/Board 15% 62% Speciality Paper Misc. Varities 4%

Varietywise Production %age (2006-07)

2% 3% 20% P & W Paper Pkg. Paper Ctd. Paper/Board 13% 62% Speciality Paper Misc. Varities

18

Varietywise Production %age (2007-08)

1%1% 20% P & W Paper Pkg. Paper Ctd. Paper/Board 13% 65% Speciality Paper Misc. Varities

19

20

India is among the worlds fastest growing paper markets; an increase in consumption by one kg per capita can potentially increase annual paper demand by a million tons. Indias paper production is forecasted to grow at a CAGR of 8.4% while consumption is pegged at a CAGR of 9% till 2012-13 on account of a growing demand fort issue paper, tea bags, filter paper, light weight online coated paper and medical grade coated paper (Source: Business Line, 7 May, 2010). Low per capita consumption: Indias per capita paper consumption grew 10.6% in 2009-10 (from 8.3 kg in 2008-09 to 9.18 kg) compared with 42 kg in China and 350 kg in developed countries (Source: Assocham), implying a large scope for correction. Export opportunity: A number of European and US paper mills are shutting down owing to over capacity and cost issues, an attractive export opportunity for Indian paper mills. Besides, Indian paper manufacturers, utilising agriculture-based raw material, possess a sustainable growth opportunity on account of growing environment consciousness. Packaging industry: The Rs. 77,570-crore Indian packaging industry (as on April 2010) grew around 15% year-on-years (Source: Indianpackagingshow.com). The paper board market size was about Rs. 120 billion in 2009; demand grew at a 3.4% CAGR from 3.7 million tons in 2004 to 4.4 million tons in 2009 (Source: CRISIL Research), riding a growth in the pharmaceutical, cigarettes, textile, FMCG, consumer durable and retail segments. Changing lifestyles: With improving domestic living standards, demand for speciality paper (tissue paper, fine art paper, business card paper and greeting card paper) is expected to increase at around 8% CAGR

21

Paper type Uses Varieties Writing and Writing, printing, Creamwove, printing paper stationery Maplitho, paperboard, copier and coated paper

Demand drivers Population growth, level of literacy, public and private spending on education, level of business activity, increasing presence of modern retail formats and growth in the printing industry

Paperboard

Industrial purpose

Kraft paper, Growth in the packaging recycled board industry, industrial and virgin board production and development in packaging technology and substitution by other materials

Newsprint paper

Printing newspapers magazines

of Glazed and Growing economy, and standard paper growing circulation and readership

Speciality paper

Tissue paper, fine Duplex, grey and Consumption of this art paper, paper for white board and paper variety is linked to specialised MG posters the standard of living as industrial usages well as per capita income such as steel mill kraft, insulation grades, etc

22

2.3) Major Players in Indian Paper Industry

1) The Andhra Pradesh Paper Mill Ltd Incorporated in 1964, the company has two manufacturing units and an off-site conversion centre with a total capacity of 153,500 MT per annum. There are five paper machines installed in the mill, which produces paper of different M.F & M.G varieties in the range of 21 to 250 GSM. The mill is manufacturing largest range of papers and boards. Annual sales volume is around USD 82 million.

23

2) ITC Limited ITC is one of the world's most modern and contemporary manufacturers of packaging and graphic series of boards. ITC's Paperboards business has a manufacturing capacity of over 360,000 MT per annum and is India's market leader across all carton-consuming segments including cigarettes, foods, beverages, pharmacy, personal care & toiletries, durables and match shells. 3) JK Paper Ltd JK Paper Ltd., Indias largest producer of branded papers is a leading player in the Printing and Writing segment. The company operates two plants in India, one in the East JK Paper Mills (JKPM) in Rayagada, Orissa with a capacity of 125,000 MT per annum, and the other in the West Central Pulp Mills (CPM), located in Songadh, Gujarat with a production capacity of 55,000 MT per annum. Both plants are ISO 9001 2000 and ISO 14001 certified and operate at around 120% capacity utilization. The aggregate annual output is over 180,000 MT per annum of paper and Pulp, using contemporary technology. 4) Pudumjee Pulp & Paper Mills Limited (PUDUMJEE) A Pune (Maharashtra, India) based Company engaged in the manufacture and sale of Specialty Papers is a flagship Company of the M.P. Jatia Group of Companies. Beginning with manufacture of Indias first indigenous Greaseproof and Glassine papers for packaging for the first time in India, PUDUMJEE went on to extend range of papers to include Security Papers such as MICR Paper, Sensitized Paper, Postal Stamp, Impressed Stamp, Passport and Excise Banderoll, Laminating Base, Silicone base paper, Wax Match paper, Packaging Papers of various kinds and types, Tissue Papers, catering to wide range of industrial applications specially manufactured to meet customers` specific requirements. Starting with a capacity of 6,000 MT of paper per annum in 1968, PUDUMJEE has now reached a capacity of 38,500 MT per annum of Specialty Papers. 5) Seshasayee Paper and Boards Limited (SPB) Incorporated in 1960, the company was promoted by Seshasayee Brothers Pvt. Ltd., in collaboration with Parsons and Whittemore, USA. SPB commenced
24

production in 1962, on commissioning a 20,000 MT per annum integrated facility comprising a pulp mill and two paper machines capable of producing, writing, printing, and Kraft and poster varieties of paper. The plant capacity was expanded to 35,000 MT per annum in 1967-68, and in 1976 to 55,000 tpa. SPB undertook various equipment balancing and modernization programs improving its operating efficiency, captive power generation capacity. The current installed capacity of the company stands at 1,15,000 MT per annum. 6) Tamil Nadu Newsprint and Papers Ltd (TNPL) Promoted by the Government of Tamil Nadu in 1979, and with an installed capacity of 2,30,000 MT per annum, TNPL is the largest producer of bagasse based paper. 7) The West Coast Paper Mills Ltd Promoted by Shree Digvijay Cement Company Limited, Sikka, and Gujarat in 1955 and located at Dandeli in Karnataka, the mill manufactures writing, printing and wrapping papers. The Mill is based on conventional Kraft process using wood as main raw material. Annual Production capacity is 157,750 TPA. In 1964 the company promoted The Andhra Pradesh Paper Mill Ltd., to take over Andhra Paper Mills owned by the Government of Andhra-Pradesh. 8) Khanna Paper Mills Private Ltd Khanna Paper Mills produces around 1,42,000 MT of paper per annum. Khanna has also become the first paper mill in India to produce high quality writing and printing board from 100% deinked wood free recovered paper across the globe with a focus on demand markets and exporting their products to the SAARC countries, Africa and the Middle East. Khanna Paper Mills Private Limited, paper is traditionally identified with reading and writing, communication has now been replaced by packaging as the single largest category of paper use at 41% of all paper used. Khanna Paper Mills is the largest paper mill production house of its kind and is among the top ten in paper production in India.

25

9) Century Paper Mills Century Pulp and Paper (CPP) located at Lalkua, Nainital, Uttarakhand a division of Century Textile and Industries Ltd (CTIL) is manufacturer of Rayon Grade Pulp (RGP) and an exhaustive range of excellent quality of Writing & Printing Paper. The unit successfully achieved significant efficiencies in various disciplines within a short span of time.

Percentage Share The percentage share of IPMA members in overall IPMA production data over the last four years is presented here:

Percentage Share of Mills in Total Production ABHISHEK (2004-05) APPM

WCPM, 7% YASH, 1% ABHISHEK, 2% APPM, 6% TNPL, 8% STAR, 3% SIRAPUR, 3% RAMA, 1% PADUMJEE, 1% OPM, 3% MPM, 1% KHANNA, 5% JKPL, 7% ITC, 14% HPC, 9% SPB, 5% CENTURY, 6% EMAMI, 1% BILT, 17% BILT CENTURY EMAMI HPC ITC JKPL KHANNA MPM OPM PADUMJEE RAMA SPB SIRAPUR STAR TNPL WCPM YASH

26

Percentage Share of Mills in Total Production ABHISHEK (2005-06) APPM

WCPM, 7% YASH, 1% ABHISHEK, 2% APPM, 5% BILT CENTURY EMAMI HPC ITC JKPL KHANNA MPM OPM PADUMJEE RAMA SPB SIRAPUR STAR TNPL WCPM YASH

STAR, 3% SIRAPUR, 3% RAMA, 0% PADUMJEE, 1% OPM, 3% MPM, 1% KHANNA, 7%

TNPL, 9% SPB, 5%

BILT, 16% CENTURY, 5% HPC, 9% EMAMI, 1%

JKPL, 7%

ITC, 15%

Percentage Share of Mills in Total Production ABHISHEK (2006-07) APPM

WCPM, 7% YASH, 1% ABHISHEK, 1% APPM, 5% BILT CENTURY EMAMI HPC ITC JKPL KHANNA MPM OPM PADUMJEE RAMA SPB SIRAPUR STAR TNPL WCPM YASH

STAR, 3% SIRAPUR, 3% RAMA, 0% PADUMJEE, 1% OPM, 3% MPM, 1% KHANNA, 7%

TNPL, 9%

BILT, 18% CENTURY, 5% HPC, 8% ITC, 16% EMAMI, 1%

SPB, 5%

JKPL, 7%

27

Percentage Share of Mills in Total Production ABHISHEK (2007-08) APPM

WCPM, 6% YASH, 1% ABHISHEK, 1% APPM, 5% BILT CENTURY EMAMI HPC ITC JKPL KHANNA MPM OPM PADUMJEE RAMA SPB SIRAPUR STAR TNPL WCPM YASH

STAR, 3% SIRAPUR, 3%

TNPL, 9%

BILT, 17%

RAMA, 0% SPB, 5% PADUMJEE, 1% OPM, 3% MPM, 1% KHANNA, 7% JKPL, 7% ITC, 16% HPC, 8%

CENTURY, 8% EMAMI, 1%

28

Paper Mill Plant Locations all over India

Growth of paper industry in India The Indian Paper Mills Association (IPMA) has suggested to setting up of a Rs. 20,000 crores 'paper fund'. IPMA also, suggested to setting up existing technology up gradation fund (TUF) for improvement of energy conversation, quality up gradation and product improvement. The Indian paper industry is growing at 8 per cent per annum. It is also, expected to grow by 10 per cent by the year 2010. IPMA also, urged the Government to reduce the excise duty from 12 per cent to 8 per cent for all type of paper mills as they are looking to up gradation of 25 per cent of their capacity. Indian paper industry has direct linkage with educational sector, manufacturing sector, as a result near about 20 per cent direct and indirect taxation on paper industry including 12% VAT, Octroi, etc. Reduction of direct and indirect taxation can make more competitive player in the world.
29

Demand and Supply: Domestic paper demand grew steadily at a CAGR of 6.5% from6.8 million tons in 2003 to 9.3 million tons in 2009 (Source: CRISIL Research).With rising economic growth, share of the paperboard segment in total demand has increased. The paperboard segment accounts for around 47% of demand, while the writing and printing, newsprint and speciality paper segment accounts for nearly 30%, 20% and 3%respectively. It is expected that by 2014, paperboard demand will grow at a 7% CAGR due to a healthy growth in industrial production and recovery in the consumer goods sector. Demand for writing and printing paper is expected to grow 6.5% CAGR, driven by the governments thrust on education and overall economic growth.

30

3. COMPANY OVERVIEW

Avantha Group The US$ 3 bn Avantha Group, led by Chairman & CEO Mr. Gautam Thapar, is one of Indias leading business conglomerates. The genesis of the Avantha Group lies in the erstwhile Thapar Group, amongst India's top ten business houses, founded by Lala Karam Chand Thapar in Calcutta (now Kolkata) over eighty years ago. Indias second largest producer of coal prior to coal nationalisation, the Thapar Group also had interests in sugar, paper, chemicals, textiles, banking, insurance, and engineering products and services. The Thapar Group went on to establish some of Indias most respected institutions, including Oriental Bank of Commerce, Oriental Insurance and Thapar University, to name a few. The partition of the Thapar Groups assets amongst its family members was completed at the turn of the century. Avantha is a thriving consolidation of the old conglomerate and Mr. Gautam Thapar represents the third generation of the illustrious business family, the baton having been passed on to him by his uncle, Mr. L.M. Thapar and his father, Mr. B.M. Thapar. The group of companies run by Mr. Gautam Thapar was rebranded as Avantha, and the new identity launched worldwide on 15th November 2007. Today, the Avantha Group has business interests in diverse areas, including power transmission and distribution equipment and services, paper and pulp, food processing, energy and infrastructure, farm forestry, chemicals, IT and ITES. With an impressive global footprint, the Group operates in over ten countries with 20,000 employees. Group companies include Crompton Greaves Limited (CG), Indias largest power equipment company, and Ballarpur Industries Limited (BILT), Indias largest paper manufacturer, both listed on the Indian stock exchanges. Recently, CG
31

acquired Pauwels (Belgium), Ganz (Hungary), Microsol (Ireland), Sonomatra (France) and MSE Power Systems (USA). BILT acquired Sabah Forest Industries (SFI) of Malaysia. Another group entity, The Global Green Company acquired Intergarden (Belgium) and Puszta Konzerv (Hungary). With these acquisitions, products from the Group are not just at the apex in India but ranked at the uppermost worldwide. Avantha Groups other successful companies include Solaris ChemTech Industries, Avantha Power & Infrastructure, Biltech Building Elements, Salient Business Solutions and, of course, Avantha Technologies. Across Avantha, good citizenship is a defined objective, with focused emphasis on education, community development and healthcare. Avantha demonstrates strong leadership globally and emerges as a focused corporate, leveraging its knowledge, leadership and operations, adding lasting value for its stakeholders and investors. 'Avan' comes from the French 'avant,' meaning forward, vanguard, advancing; and the Sanskrit 'ntha' stands for stability. Also, the last three letters 'Tha' are short form for Thapar.

32

33

34

3.1) INTRODUCTION TO BALLARPUR INDUSTRIES LIMITED Ballarpur Industries Limited (BILT), part of the US$ 3 billion Avantha Group, is the undisputed leader of the Indian paper industry. It is India's largest manufacturer and exporter of paper, with a strong presence in all segments of the usage spectrum, including writing and printing (W&P) paper, industrial paper and specialty paper. Complementing this is a diversified production infrastructure with six manufacturing units spread across the country. In recent years, BILT has evolved as a dynamic, knowledge-driven organization focused towards creation of stakeholder value. In the process, it has also transformed the paper industry from its traditional 'commodity market' mindset to a branded one. A concerted program of innovation and technological excellence helps it proactively respond to the needs of each individual segment. Today, BILT not only has the range, but also a well-entrenched distribution network that enables it to reach customers, any time, any place. As the industry leader, BILT is committed to developing its business towards ecological, social and economic sustainability. Community development and upliftment of the marginalized sections have been identified as focus areas. BILT offers vocational training and program on micro financing for the unemployed. The company works extensively with the communities on a broad range of issues, including health, education and strengthening of the village panchayat system through training of members on issues relating to governance, development, and fund management. BILT, in collaboration with its partner NGOs, has helped established Self Help Groups (SHGs) at the village level to implement its social programmes. It has also joined hands with Pratham, an NGO that runs primary education programmes all over the country.

35

VISION & MISSION of BILT Vision Statement -: To become a leading creator of Shareholder Value in the Paper Industry. Mission Statement -: To consistently outperform expectations and deliver superior value to both our Customers and Stakeholders.

36

3.2) Indian and Global Operations of BILT: Unit Locations OF BILT all over INDIA

1. 2. 3. 4. 5. 6.

UNIT BALLARPUR (Maharashtra) UNIT BHIGWAN (Maharashtra) UNIT SHREE GOPAL (Haryana) UNIT SEWA (Orissa) UNIT ASHTI (Maharashtra) UNIT KAMALAPURAM (Andra Pradesh)
37

With the acquisition of Sinarmas India renamed as BILT Graphic Paper Product Ltd (BGPPL), which brings with it manufacturing capability of international calibre, more than the addition to its capacity. This acquisition brings with it immense synergies and growth opportunity that are completely aligned to our corporate focus, this move has been in line with the philosophy to actively pursue acquisition opportunities to strengthen core business and to achieve an incremental financial performance one long-term basis. BILT obtain a 40% market. An increase is the proportion of value added paper sales would enable the company to post higher realizations even without an increase in paper prices. OPERATIONS BILTs consolidated paper manufacturing operations span across six production Units, five of which are in India and one in Malaysia. The Indian Units are located at Ballarpur (Maharashtra), Bhigwan (Maharashtra), Shree Gopal (Haryana), Sewa (Orissa) and Ashti (Maharashtra). The Malaysian Unit, SFI is in the State of Sabah. The rayon grade pulp manufacturing Unit is located at Kamalapuram (Andhra Pradesh). The details of operational developments across the different Units are given below. Unit: Ballarpur (Maharashtra) During 2010-11, Unit Ballarpur produced 230,752 MT of paper. There has been a significant increase in capacity of Unit Ballarpur with the installation of a new state of art paper machine, which was commissioned by Allimand, France with an installed capacity of 165,000 MTPA. During 2010-11, this new machine produced 118,134 MT of Paper. The state of art machine and finishing section has enhanced quality, provided better packaging for customers and reduced manpower engagement. On the product development front, the Unit has successfully manufactured new shades in various products, namely BILT Magna Print, Wisdom Print, MICR Cheque Paper, Maplitho and Extensible Sack Kraft Paper (ESKP) to meet customer requirements, in domestic as well as export markets. At the back-end, bleached pulp production was 115,329 MTPA. Enhanced operational efficiencies resulted in increased pulp production with uniform
38

brightness and increased viscosity. The Pulp mill operations have been further optimized with change in the raw material mix of wood and bamboo, which has resulted in enhanced performance of the paper machines in terms of quality of paper produced. Environment management and resource conservation continued to be a key focus area. Water conservation is a key area where the mill has reduced consumption by over 30 per cent per MT of paper produced. This was achieved by adopting the 3-R (Reduce-Reuse-Recycle) methodology, which is much lower than the national standard. While the Unit has added additional equipment for improving quality of paper which has increased electrical load, power consumption was reduced by 5 per cent per MT of paper produced. This was achieved through implementation of various energy saving innovations across the pulp and paper manufacturing process. During the year, Non-Condensable Gas Incineration system was commissioned for control of bad odour from the plant. As a part of technology adoption for energy and environmental sustainability, the existing pulp mill is being replaced with a modernized pulp mill for which civil and erection work is in progress. The modernized pulp mill will have all advanced energy and resource efficient control systems. Achievements and awards Unit Ballarpur is certified for the FSC COC and Control Wood certificate by the Forest Stewardship Council. Unit Ballarpur has a certified Integrated Management System of ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. Unit Ballarpur also secured the Environmental Best Practices Award 2011 from CII GBC Hyderabad for innovative environmental best practices. Address: Unit Ballarpur P.O. Ballarpur Paper Mills, Distt. Chandrapur, Maharashtra-440 901 Tel: 07172-240200 Fax: 07172-240548

39

Unit: Bhigwan (Maharashtra) During 2010-11, Bhigwan PM-1 line produced 142,646 MT of Coated Paper and Coated Boards - an increase of 9,412 MT over 2009-10. The newly commissioned state of the art PM-2 paper manufacturing line, which started commercial production in March 2009 produced 140,670 MT of Coated Paper during 2010-11, an increase of 24,921 MT over 2009-10. The total production of the Unit was 283,316 MTPA, an increase of 34,333 MTPA over 2009-10. The Unit successfully developed several new products during the year. This includes art paper for digital printing and gravure printing, art card suitable for injection molding painting process (paint shade cards job) and new shade development (High whiteness) in printed circuit board. All the new products were well received by the market. Resource conservation continued to be a key focus area for the Unit. Innovative process changes, optimization of coating formulations and wet end chemical usage has helped in reducing usage of chemicals and fiber consumption, which has offset the impact of rising input prices to a large extent. A number of energy conservation measures have resulted in significant reduction in power consumption in the existing paper machine by over 9.2 per cent per MT of paper produced in 2010-11. Water consumption in mill has further reduced by 22.3 per cent per MT of paper in 2010-11. These efforts have been recognized at various national and international fora and the Unit has received the following prestigious awards in the 2010-11: Pulp and Paper International award for efficiency improvement from RISI Greentech Safety Gold Award from Greentech Foundation, New Delhi National Award for Prevention of Pollution from Ministry of Environment and Forests, India Good Green Governance (G3) Award from Srushti Publications, New Delhi

Unit: Shree Gopal (Haryana) During 2010-11, Unit Shree Gopal produced 79,694 MT of paper. Unit Shree Gopal undertook various quality improvement initiatives to improve customer servicing and satisfaction. Some of these include: Achieved On Time In Full (OTIF) score consistently above 95 per cent Reduction in customer complaints by 20 per cent in 2010-11
40

Developed Royal Executive Bond of 100 GSM on another machine Installed new process technology Installed new bundling machine and new reel stretch wrapping machine to improve customer servicing Introduced new labels with bar code to improve customer servicing. In the area of environment protection, the Unit has continuously ensured compliance with CREP norms and achieved all the norms of treated effluent and boiler stacks emissions, well below the norms laid down by Haryana State Pollution Control Board. Overall water consumption in the mills reduced by 12.7 per cent per MT of paper produced, while effluent discharge decreased by 6.3 percent per MT of paper produced. The Unit also installed a NCG Collection and Incineration system in February 2011, a Sewage Treatment Plant for handling colony sewage and 5 new rain water harvesting pits. On energy consumption, the Unit achieved major reduction in power consumption for manufacture of paper. This was achieved by taking measures such as replacing inefficient motors with energy efficient motors, installing Variable Frequency Drives, Screw compressor at Pasaban sheeter and shutting down of four water tube wells. In order to improve material handling facilities, the Unit has procured one mobile log grabber for handling wood from yard /unloading sites. As a part of the management commitment towards system implementation in 2010-11, Unit Shree Gopal continued to maintain the following certifications: Quality system ISO 9001-2008 ISO 14001-2004 certification OSHAS 18001-2007 certification FSC COC certification Implemented 5S initiative across the Unit Address: Unit Shreegopal P.O. Yamunanagar, Distt. Yamunanagar, Haryana-135 001 Tel: 01732-251603/ 611
41

Unit: Sewa (Orissa) During 2010-11, Sewa produced 67,260 MT of paper which was 2,883 MT lower than the output in 2009-10. The Unit undertook various quality initiatives for new product development and to improve Customer Servicing and Satisfaction. Some of these include: Achieved On Time In Full (OTIF) score consistently above 95 per cent Reduction in customer complaints by 20 per cent New shade for Ten on Ten market in Copier grades Catering to Export Market in 80 GSM Copier multi-purpose paper Commissioning of Satellite plant of SMI for PCC at the Unit for 100 per cent utilization of PCC in place of Talc as filler Switched over to Alkaline sizing, resulting in quality improvement with respect to brightness, opacity and bulk Commissioned Oxygen plant and started using in bleaching sequence Eop stage for reduction of Hydrogen peroxide consumption Commissioned DCS for Bleach Plant operation. Resource conservation continued to be a key focus area for the Unit. In terms of environment protection, the Unit has continuously ensured compliance with CREP norms and achieved all the norms of treated effluent and boiler stack emissions as per the norms laid by Orissa Pollution Control Board. During 2010-11, various initiatives taken to improve the environment included: Commissioned NCG incineration system for odour control Installed on-line stack monitoring system for boiler stack emission Introduced cascading system in the inlet of effluent lagoon for temperature reduction and made additional settling pit in the inlet of Pulp Mill Clarifier Utilization of 10 per cent of effluent discharge for plantation inside the plant Identified potential consumers for fly ash generated from the coal boilers and doubled the supply from 30 MT per day (2009-10) to 60 MT per day (2010-11) 100 per cent utilization of waste acid generated from Clo2 Plant in bleaching stage for pH control, which resulted in improvement of effluent quality As a green initiative, constructed five rain water collection pits for rain water harvesting.
42

Address: Unit Sewa Gaganapur, P.O. Jeypore, Distt. Koratpur, Orrisa-746 002 Tel: 06854-230222 Fax: 06854-232931 Unit: Ashti (Maharashtra) In 2010-11, the Unit produced 53,299 MT of paper, which was 1,691 MT lower than the output in 2009-10. This production has been lower on account of higher downtime and adverse product mix. After commissioning of the satellite plant of SMI at Ballarpur, the Unit completely changed over to Precipitated Calcium Carbonate (PCC) as filler, which has helped in improving product quality as well as cost reduction. Further, the Unit has replaced the primary centri-cleaner pump to a higher capacity one for improving the centri-cleaning efficiency, which resulted in the improvement of product quality. This combined with other quality improvement initiatives have resulted in substantial reduction of customer complaints by 65 per cent in 2010-11. In the area of environment protection, the Unit has successfully carried out retrofitting and up-gradation of Electrostatic Precipitator (ESP) to achieve suspended particulate matter at 50 mg/NM3, which is much below the statutory norms. The Unit has also been able to reduce water consumption by 16 percent per MT of paper produced during the year by improving the vacuum flume recycling system and reuse of water in the process which has finally reduced the effluent water of the mill by 20 per cent per day thereby improving the ETP discharge effluent quality. The Unit catered to the retail business by producing around 15,214 MT of paper for various brands like Ten on Ten, Matrix Premium Multi Purpose Paper (MMPP), Matrix Premium Digital Paper (MPDP) and P3 segment. A testimony to the Units improvement in product quality is the success achieved in exporting paper to 20 countries across the globe, where the products are competing with international brands and meet high quality norms.
43

In addition to the existing A-4 packing line, a second A-4 line has also been shifted from Unit Sewa and re-commissioned at this Unit, enabling it to increase the volume of inside cutting and packing of A-4 Copy paper to 43,242 MT in 2010-11, which is 6,088 MT higher than the previous year. As part of management commitment towards systems implementation, in 2010-11, the Unit obtained recertification of QMS ISO 9001:2008, EMS ISO 14001:2004 and ISO 18001:2007 certification of OHSAS. The Unit is also Forest Stewardship Council FSCCOC certified. Address: Unit Ashti P.O. Ashti, Vill. Ullur, Distt. Gadchiroli, Maharashtra-442 707 Tel: 07135-244128 Fax: 07172-240548 Unit: SFI During 2010-11, paper production from the Unit was 131,909 MTPA, which is about 12 per cent lower than 2009-10. Lower paper production was mainly due to an annual shut-down in September and October, 2010. The annual shut-down is normally once in 18 months for inspection and servicing of pressure vessels as per the requirements of Department of Safety and Health (DOSH), Malaysia. There was an overrun of 9 days in this annual shut-down, mainly due to delay in implementation of DCS system on paper machines. The other factor which led to lower production was the start up and commissioning of the new MCO2 plant in Pulp Mill tie in shut in June 2011. Out of the total paper production of the Unit, 40,631 MTPA was exported. The bleached pulp production was 100,067 MTPA, which was 12 per cent lower than 2009-10. On the raw material front, the mix has been changed to increase consumption of Acacia Mangium against Mixed Tropical Hardwood to improve paper formation and reduce production cost. SFI paper grades have moved up in positioning in terms of quality amongst its regional competitors. Another notable parallel occurrence is the significant drop in paper dirt count. One of the major achievements on the Customer servicing side during 2010 11 was a 40 per cent drop in customer complaints as compared to 200910. This is
44

mainly due to proactive steps taken in maintaining quality during production and tight Quality Control Systems across processes. As regards plantation activities, the major change from past practices has been to directly employ labour rather than relying entirely on contractors. By the end of 2010-11, more than 200 Indonesian nationals were employed on land preparation and planting activities. This was necessary as contractors were unable to meet the plantation targets. The plan is to increase the numbers of such workers to more than 500 in 2011-12. Consequently, plantation coverage increased from 2,200 hectares (ha) in 2009-10 to 4,100 ha in 2010-11 with more than 800 ha planted in the month of June 2011. SFI was awarded a Compliance Certificate by the Sabah Forestry Department for CY 2010 and maintained its SmartWood Verified Legal Origin (VLO) certification for its established plantation and its Natural Forest Management (NFM) areas and its Forest Stewardship Council (FSC) Controlled Wood certification for its NFM area. The Pulp Mill upgradation project is in an advanced stage of erection and commissioning. New Wood Handling line and Oxygen Delignification plant have already been taken in line and the complete Pulp Mill is likely to come on stream by October 2011. -

45

3.3) ORGANIZATION STRUCTURE OF BGPPL

UNIT HEAD (CGM)

GM Process

GM Engineering

DGM Recovery & Chemical Complex

DGM Pulp Mill

Manager - MSD

HeadR&D

HeadCommercial

HeadAccounts

HeadRaw Material

HR

1. Head Stores 2. Head Purchase

DGM Process

1. Head Machine House 2. Head Electrical 3. Head Instrumentation 4. Head Pulp Mill 5. Head safety

Deputy Raw material

Head Recover y

Head Chemical Complex

Head Warehouse Operation

Head Production Planning & Order Scheduling

1. Head Order Management 2. Head Chemical dispatch & Freight Payment 3. Head Factory Excise

1. Head A/c payable & Imports 2. Head Stores Bill, Inter unit Transaction 3. Head Cost Accounting

1. IR 2. Deputy Administration & security 3. Deputy HR 4. Head Medical

Assistant Manager

SHIFT INCHARGES / OFFICERS

EMPLOYEE

46

Structure of MSD (Marketing Servicing Department)

Manager MSD Dy. Manager MSD Executive Domestic Executive Export Executive Domestic Executive Domestic Executive Domestic Executive Export

47

3.4) Products Offered By B.G.P.P.L

1 2 3 4 5 6 7 8 9 10 BOOK PTG ESKP (SACK CRAFT PAPER) CREAM WOVE SEMI ABSORBANT MG WHITE POSTER TDL WHITE POSTER NS MAPLITHO COPIER GRADE UNRULED PAPER (new shade) MG TD POSTER GRADE 2 BILT MAGNA PRIENT 11 12 13 14 15 16 17 18 19 20 MG WHITE POSTER AR GRADE 2 MAPLITHO NSS FS GRADE 2 MAPLITHO NSD PREMIUM AZURE LAID LEDGER SUNLIT BOND PREMIUM SUNSHINE SUPER PTG WHITE MAPLITHO TINTED UC WOOD FREE PAPER WHITE POSTER ACID FREE WISDOM PRIENT

48

3.5) SWOT Analysis of BILT Strength (S) Maximum Varity & high quality Of Paper Good Employer-employee Relationship Efficient management Totally Computerized CSR by keeping Environment clean Strategic Location for easy availability Of Raw material Weaknesses (W) Large Structure of organization Old Machinery High Fixed Cost Remote Location of Plants Logistic Issues Opportunities (O) Setting up a new plant in central part of India Exploring new overseas market Maximize production capacity by replacing old machinery Decreasing cost by increasing Rail & Water as mode of Transportation Acquiring some weak and poor Paper manufacturing companies Threats (T) Global Warming Raw material Unavailability Increasing Competition Import of Papers NGO s Working against cutting down of trees & using of Paper Technological advancements such as mobile facilities and internet usages Strict Govt. Policies, high Taxes and Duties

49

3.6) PORTERS FIVE FORCES MODEL for BILT

POTENTIAL ENTRANTS Threats of New Entrance is LOW

SUPPLIERS POWER Bargaining power of Supplier is HIGH

BUYERS POWER INDUSTRY RIVALRY Industry Rivalry is HIGH Bargaining Power of Buyer is HIGH

SUBSTITUTES Threat of Substitute is LOW

1. Threat of New Entrants: For BILT, the threat of new entrants is low because despite of Govt. of Indias persuasion by providing land for plant in low cost and various TAX exemptions it appears no business house is taking interest in establishing new paper manufacturing industry because of low availability of Raw material and high installation cost. Rather the existing players are either taking over some weak
50

industries or adopting some expansion plans and adding to their production Capacity. 2) Industry Rivalry: Though there are few players in this segment, there is existence of a strong competition because of fluctuation of variable costs and customers choices. 3) Suppliers Power: The Suppliers power is very high in paper manufacturing industry because the factors of product-ion such as Fibre and Bamboo are becoming high cost due to decrease in forest and high civilization. And the machinery is imported from other countries so it is not a quite easy task. 4) Buyers Power: The buyers power is also very high because of the import of paper products from neighbouring countries and the companies have to provide various discounts to attract customers. 5) Threat of Substitutes: The Threat of Substitute is very low because there is hardly any substitute for paper. The demand will always be there for paper and paper by-products. Transportation When the finished product arrives in the warehouse, the shipping department determines the most efficient method to ship the products so that they are delivered on or before the date specified by the customer. When the goods are received by the customer, the company will send an invoice for the delivered products.

51

Transportation in context with BILT Unit BALLARPUR Transportation is an important function of Marketing. Goods must be transported from their place of Production to the many locations of their customers. This can be done through various means such as Air, Water, Rail and Road. Here at BILT Unit BALLARPUR all the transportation activities of raw material and finished goods are done by Road Transportation. The transporters those who are indulged in these activities are either nominated by the Party itself or Selected and awarded the contract for the specific year by the Company. The selections of Transporters are basically done in two ways. One is Offline negotiation and other one is Online Reverse Auction where the company finds out the various transporters providing services for those particular areas and after doing a comparative statement they finalize and award them the contract. And For the current year the company has selected the transporters by online reverse auction method. The processes that the company follows for the online reverse auction method are as follows.

After manufacturing the Quality Assurance Department certify the Product, then the goods comes to finishing department and here all the people of finishing department do all the counting and primary packing of the goods through wrappers manually. Then it comes to MSD warehouse and after doing the secondary packing the MSD plans for the transportation by appointing the transporters to dispatch the goods to the Customers destination.

52

MSD

Respective Zones N/E/W/S

Manufacturin g Dept.

Customer

Finishing Dept.

MSD Warehouse

53

DISTRIBUTION CHANNEL OF BILT

Wholesaler Retailer

Retailer

Production Unit

Customer

Distributor

Jobber

Deport

Deport

Retailer

54

Scope and Objective of the study Scope: 1)The project will act as a broad straightforward guide to the management for further expansion and improvement of distribution channel. 2) The study will encourage the marketing official and the dealers to take sufficient measures to the overcome the limitation of the channel of distribution. Objective : 1)To study the existing distribution channel of the organization . 2)To find out the satisfaction level of supplier of BGPPL ltd. Regarding supply of paper. 3)To study will help to improve the sales volume of the BGPPL.

55

RESEARCH METHODOLOGY
Research refers to a search for knowledge. It is also defined as scientific and systematic search for relevant information on a specific topic. In fact research is an art of scientific investigation. It is also defined as an a careful information or inquiry especially through search for new facts in any branch of knowledge. According to Clifford Woody Research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data, making deduction and reaching conclusions; and at last carefully testing the conclusion to determine whether they fit the formulating hypothesis. In short, the search for knowledge through objective and systematic method of finding solution to a problem is Research.

TYPE OF RESEARCH

Market Research is being used to measure the characteristics of market, to obtain information needed foe forecasting to evaluate new product ideas and improve existing product. There are number of decisions or alternatives in the market, one course of action is to be selected from them.

The market research project can be classified into two parts on the basis of fundamental objective of the research

56

1. Exploratory Research 2. Descriptive Research

Exploratory Research- The major emphasis of exploratory research is on the discovery of ideas. The idea is to clarify concepts and subsequently, make more extensive research on them. The primary advantages of exploratory research studies are low cost and less time requirement

Descriptive Research- Descriptive studies attempt to determine the frequency with

which something occurs or the relationship between two phenomena e.g. to identify the
characteristics of users of certain product; the degree to which product consumption varies with different types of users; or the consumers who buy the product on credit etc.

Method of Research

The study falls under the category of Descriptive research and uses questionnaire method. Descriptive research includes survey and fact finding enquiries of different kinds. It is the description of state of affair, as it exists at present. Main characteristics of this method are that, the researcher has no control over the variables. He can only report

57

what is happening. The method of research used in this research was questionnaire method.

Research Approach

The most suitable approach for this research was the survey. The survey method is the most widely used technology in data collection and is suited for descriptive research. Survey usually includes research instruments, sampling plans and contact methods.

Research Instrument: The questionnaire is the most important instrument to collect the primary data. It consists of a set of questions presented to the respondent for the

awareness to take their feedback. In marketing research, careful choice of the

questionnaire and their form, wordings and sequence is important. Care should be taken to see that there are no ambiguous terms in the questionnaire and it is not too long.

In this project I have prepared questionnaires catering to caterers as target segments .These questionnaire are in close format .

58

SAMPLE DESIGN:

Type of Sampling: There are in all two types of sampling:

a) Probability Sampling b) Non-Probability Sampling

Probability Sampling:

Each and every unit in sampling frame has equal or known chance of being included as sample.

Random selection process is undertaken to rule out biasness.

Whenever large size of sample is to be accessed, this method is used.

This method of sampling is normally used for consumer products sampling decision.

Non-Probability Sampling:

Here the chance of the unit getting selected as sample cannot be estimated.

Sampling units are selected without identifying sample frame

The judgment of researcher for some prior knowledge are applied to the selected samples

59

This method is used for accessing small size of samples.

It is used in exploratory research. Normally used for industrial products sampling decisions.

Here I used Convenience & Referral Sampling Method, with a sample size of 50 Caterers all across from Ballarpur reason.

Lets see how random sampling beneficial for our research work. As consider caterers population in Ballarpur region is near about more than 1000.Though the Caterering business is unorganized one so to reach every caterer is not possible. For research work I

had approached as per our convenience & referred by others as sample under nonprobability sampling method.

SAMPLE SELECTION

Type of Universe: The universe for my research was the Caterers of Ballarpur .

Sample size :- Among the total population of the caterers I had selected sample unitDATA COLLECTION

60

In data collection process some structural process has been adopted, in which list of questions were specified in the form of questionnaire.

Types of data:

A. Primary data B. Secondary data

Primary data:

The data, which is being collected from first-hand information on any happening or event or either being observed for the purpose of the study, is known as primary data.

THE SORCES OF PRIMARY DATA COLLECTION

1. Observation
2. Questionnaire 3. Intereview Schedule 4. Discussion with some concerned people

61

Secondary data:

Any data, which have been gathered earlier for some other purpose, are known as Secondary Data.

Though It is a Descriptive research. Descriptive research includes survey and fact finding enquiries of different kinds. It is the description of state of affair, as it exists at present. In this method, the researcher has no control over the variables. He can only report what is happening. The method of research used in this research was Survey method.

In my research work I had used Questionnaire as tool for collecting the primary data.
purpose through conducting survey & observation.

In some cases where to reach to caterers are not possible then I had conducted telephonic interview for data collection.

Collection of data through Questionnaires:

This method of data collection is quite popular, particularly incase of big enquiries. It is being adopted by private individuals, research worker, private and public organizations and even by the persons concerned with a request to answer the questions and return the questionnaire. A questionnaire consists of a number of questions printed or typed in responded who are expected to read understand the questions and write down the
62

reply in the space meant for the purpose in the questionnaire itself. The respondents have to answer their questions on their own. Here in this research a structured questionnaire was prepared and the people were contacted personally and they filled the questionnaires on the spot only. A structured questionnaire is that type of questionnaire, which includes closed ended questions and is in a structured and printed format.

Collection of secondary data:

Secondary data means data that are already available i.e. they refer to the data which have already been collected and analyzed by someone else. When the researcher utilizes the secondary data, then he has to look into various sources form where he can obtain them. In this case he is certainly not confronted with the problems that are usually associated with the collection of the original data. Secondary data may either be published data or unpublished data.

While taking into consideration the secondary data the researcher must see that they possess the following characteristics. 1. Reliability of data 2. Suitability of data 3. Adequacy of data

63

Here in this research, the secondary data that has being collected is mainly from the past records available with internet.

64

DATA ANALYSIS

1) Does MSD (Marketind service Department) play a major role in marketing ?

a)Yes b)No

Marketing
yes No

18%

82%

Interpretation:
It was found that the MSD play the major role in marketing .This shows that MSD is the key factor for sale.

65

2) Is an R&D officer necessary at loading point for inspection ?

a) Yes b) No

R&D
Yes No

10%

90%

Interpretation: It was found that R & D play a major role in inspection.This shows that without R&D export did not take place.

66

3)For export which type of vehicle is used for loading ? a) Container b) Truck c)Railway

Vehicle
Container Truck 0% 10% Railway

90%

Interpretation:
The analysis shows that container play a major role in export rather than turck and railway this shows that export of good done through container.

67

4)For identification of material in warehouse does cherkers are must ? a)Yes b) No

Checkers
Yes No

20%

80%

Interpretation:
It was founded that checkers are the key people to identify the product in warehouse. This shows that checker can save the time to identify the goods rather than any other employ.

68

5) Is safety instrument like helmet, handglows, shoes are necessary ? a) Yes b) No

Safety
Yes 2% No

98%

Interpretation:
The analysis shows that safety is needed compulsory in warehouse. This shows that without safety employ dont want work in warehouse so safety is first preference of employ.

69

6)Average number of days for in and out of finished product, loaded vehicle should be ? a) 1-2 days b) 3 days c) 4 days d) above 4- days

Loading days
1-2 days 3 days 0% 12% 5% 4 days above 4 days

83%

Interpretation:
It was founded that 1-2 day is the most preferable days for in and out of vehicle. This shows that truck drivers and loading mate preferd 1-2 day as best rather than 3 and 4 days.

70

7) Mention the equipment for loading the vehicle ?

a) By fore Clift b) By hand c) other machinery

Loading vehicle
Foreclift By hand 0% Other machinery

40%

60%

Interpretation:
The analysis shows that loading of vehicle mostly done through fore Clift. This shows that employ and drivers like to load the vehicle through fore clift and some of the vehicle are loaded through hand.

71

8) Which are the best selling products ?

a) Wisdom print

b) Bilt Magna print

products
wisdom print magna print

44% 56%

Interpretation:
It was founded that wisdom print paper have high demand in market then bilt magna print. This shows that customer demand wisdom print more than magna print paper.

72

9) Which of the following factor influences the customers buying attitude most ? a) Quality b) Price c) Brad name d) Any other

Factors
Quality Price Brand name Any other

10% 20%

20%

50%

Interpretation:
It was founded that customers purchase the paper due to less in price giving less preference to quality ,brand name.This shows that price play a major role in customer point of view.

73

10) How do you compare your products performance with other leading products ? a) Excellent b) Good c) Average d) Poor

Performance
Excellent Good 0% 8% 22% Average Poor

70%

Interpretation:
The analysis shows that BGPPL product is more preferable than any other product in market.

74

11) Does the customer are satisfied with your service ?

a) Yes

b) No

Service
Yes No

21%

79%

Interpretation:
It was founded that BGPPL provide excellent service to its customer. This shows that customers are more happy with the service provided by BGPPL some are unhappy and some are satisfied with BGPPL service.

75

12) As per the requirement of MSD ,does transporter provide their service ?

a) Yes b) No

service
Yes No

20%

80%

Interpretation:
It was found that transporter provide their service in time to MSD as required. This shows that almost all transporter provide their service in time and some are fail to give the service.

76

13) Does the inventory is properly maintain in MSD ? a) Yes b) No

Inventory
Yes No

20%

80%

Interpretation:
The analysis shows that inventory is properly maintain in MSD .This data shows that at the most inventory is maintain in MSD but some time it is disturb.

77

14) Mention the storage condition of MSD warehouse ?

a) Very good b) Good c) Average d) Poor

storage
verygoog Good 2% 8% 20% Average Poor

70%

Interpretation:
It was founded that MSD maintain very good storage condition of warehouse to store the finished product..

78

15) Which form of paper did you export ? a) Real b) Bundle c) Pallet d) Loose Ream

Export
Real Bundle Pallet 0% 18% 0% Loose Ream

82%

Interpretation:
It was founded that in BGPPL Pallet form of paper have high demand than Real, Bundle, Loose ream. This shows that pallet paper have high demand in out of country ie. India.

79

16) Mention the mode of transportation for export ?

a) Sea b) Airway c) Roadway

Rout
sea Airway 2% 0% Roadway

98%

Interpretation:
The analysis shows that almost 98% export is done through sea rout and 2% through airway. This shows that sea is the main rout for export rather than anyother way.

80

CONCLUSION
Distribution channel management is a very important and complex procedure. Process needs to follow too many manual procedures related documentations, customs, quality, etc. Study shows how all procedures are followed in line with all the rules and regulations. The study has indicates that there are too many issues which are totally different from the theory based procedures, too many things need to take care while the processing of an supply chain management which not in the books. In the process of distribution channel management the firm has to follow all the rules and regulations as prescribed in the rule book of the Exim policy. Company has to go through the process and avail all the documents which are said in the rule book.

81

RECOMMENDATION
The industry may try to adopt a marketing orientation to find out new customers like educational institution and government sectors if applicable, rather than depending much on the demand from the existing customers only. The industry as a whole can go for different incentives and discount plans to meet the customers choice and competitor price in the market. To increase the demand for the existing product it must go for proper advertisements and awareness programmes to create brand awareness. The order management and scheduling process should make preplanning of date on which the product of customer will be ready so that the transporters can be intimated in advance. Turnaround Time should be reduce which requires proper organization of stocks, pallets or reams reducing the time required. Other offers in the market BGPPL though provide better offers than other companies in market it is transporters do have some priorities based on the time of demand for placement of vehicle by other companies or relationship marketing. Which can be overcome by intimation in advance and making better relationship Freight charges and time period of clearance of payment which constitute for another most important factor should be taken into considered. Though BGPPL provide fairly rated freight charges more than others in the market. It lags behind in terms of clearance of period so BGPPL should take few steps to improve it. BGPPL should maintain the quality norms so as to be the quality as well as price leader in market.

82

Limitation of the study

1. Small sample size due to Time constraints. 2. Due to nature of certain questions respondents were reluctant to part with certain information.

3. Most of the caterers did not allow telling the competitors details

83

BIBLIOGRAPHY
Books:

Magazines: BILT magazine

Websites: www.ipma.co.in www.bilt.com www.avantha.com

84