Strategic Management Report on Ballarpur Industries Ltd.

Prepared By, J Sree Harsha PGDM-1, Roll No: 55 Xavier Institute of Management

Strategic Management Report

Contents
1. Company introduction, Vision and Mission .................................................................................... 2 Mission ................................................................................................................................................ 2 Vision................................................................................................................................................... 2 2. 3. 4. Core Competencies ......................................................................................................................... 3 Mintzbergs deliberate to emergent strategies .............................................................................. 4 Industry Evolution ........................................................................................................................... 5 Ancient Indian Writing Materials ........................................................................................................ 5 Industry Structure ............................................................................................................................... 5 5. Porters 5 Forces analysis of BILT .................................................................................................... 7 Industry Rivalry ................................................................................................................................... 7 Suppliers Power .................................................................................................................................. 7 Buyers Power ..................................................................................................................................... 7 Potential Entrants ............................................................................................................................... 7 Substitutes .......................................................................................................................................... 7 6. Generic Strategies, capabilities, and competitive advantage ......................................................... 8 Innovations ......................................................................................................................................... 8 7. Generic Strategies, capabilities, and competitive advantage ......................................................... 9 Generic Strategies ............................................................................................................................... 9 BILT .................................................................................................................................................. 9 JK Papers ......................................................................................................................................... 9 TamilNadu Newsprint & Papers limited ......................................................................................... 9 Financial Ratios ............................................................................................................................. 10 8. On Business Groups, Leadership style, and restructuring ...................................................... 11 Avantha Group .................................................................................................................................. 11 9. 10. 11. Expansion Strategies ..................................................................................................................... 13 Strategy implementation issues................................................................................................ 14 References ................................................................................................................................ 14

Strategic Management Report

1. Company introduction, Vision and Mission

Ballarpur Papers limited is India's largest paper company and the only Indian company to rank amongst the top 100 paper companies in the world. Ballarpur Papers limited is part of the US$ 4Billon Avantha Group which is Indias leading business conglomerates. The Group has business interests in diverse areas, including pulp and paper, power transmission and distribution equipment and services, food processing, farm forestry, chemicals, energy, infrastructure, information technology (IT) and IT-enabled services. Ballarpur Industries Limited (BILT) is Indias largest manufacturer of writing and printing (W&P) paper. BILTs subsidiaries include Ballarpur International Graphic Paper Holdings B.V. (BIGPH); BILT Graphic Paper Products Limited (BGPPL); Sabah Forest Industries (SFI), Malaysias largest pulp and paper company; and BILT Tree Tech Limited (BTTL), which runs BILTs farm forestry programme in several states in India. Building on its unmatched paper quality, BILT ventured into the paper-based office stationery segment. BILT has mega brands such as BILT Royal Executive Bond, BILT Copy Power, BILT Image Copier and BILT Matrix that have now become an integral part of office stationery. BILTs acquisition of SFI, Malaysia, in 2007 was a watershed event it was the first overseas acquisition by an Indian paper company, it transformed BILT into a major regional player, and elevated BILTs ranking among the global top 100.

Mission
To consistently outperform expectations and deliver superior value to our Customers and Stakeholders

Vision
To become a leading creator of Shareholder value in the Paper industry Indian paper industry is mostly concentrated in states of Andhra Pradesh, Orissa and Maharashtra. Some of the leading players are BILT Papers limited, West Coast Paper Mills Ltd, JK Papers, Tamil Nadu Newsprint & Papers Ltd and Emami Paper Mills Ltd. Over All Pulp and Paper industry (Sales Value)

Though the company ranks 2nd in the overall paper and pulp market, The company accounts for over 50% of the coated wood-free paper market, an impressive 85% of the bond paper market and nearly 45% of the hi-bright Maplitho market, besides being India's largest exporter of coated paper.

Strategic Management Report

2. Core Competencies
The core Competencies of BILT lies in the area of paper and chemicals. BILT has launched a Research and Development Division in Paper and Pulp (RCDP). RCDP will engage in conducting research and development studies in paper manufacturing including pulping/bleaching, stock preparation, coating and environment safety and provide expertise to the Pulp & Paper industry. BILT has also been developing Farm Forestry since 1990 through its subsidiary company BILT Tree Tech Ltd. (BTTL). Since its inception in 1989, BTTL has concentrated on developing core competency in forestry and is manned by experienced forestry professionals. BILT has taken a special care to target marginal land belonging to farmers below poverty line. Farmers covered under this scheme are assured purchase of their pulpwood produce by BILT at declared support price or market price which ever may be higher. Tailor-made bank loans on long-term basis are made available to the needy farmers. Having such a network has enabled to BILT to perform well in this business of Pulp and Paper. Build also has an extensive network of 350 retail distributors spread over 270 locations. I do believe that BILT would be able to handle the current socio-economic environment dynamics. Being in the business of Paper and Pulp, raw material becomes very important. In this case, the raw material comes by cutting down trees in a plantation. This is in effect deforestation. Moreover, in the present world environment, this is a serious issue. However, BILT has taken many initiatives so as to see to it that the environment doesnt get effected. On-going Research & Development activities aimed at tree improvement and clonal development have already started contributing to increased returns to farmers through improved productivity. BTTL has initiated site-specific forestry research projects to identify and produce high yielding clones of pulpwood species like Eucalyptus, Casuarina and Leucaena leucocephala. Plantations raised with high yielding clones of Eucalyptus have achieved substantial increase in yield giving significantly higher returns to farmers. The company plans to progressively increase usage of high yielding clones in the farm forestry programme by adopting tissue culture route. BILT Tree Tech Ltd has also established high quality seed orchards of above species to improve availability of good quality seed and ensure better productivity of its farm forestry programme. The programme is being implemented in six states of India namely, Maharashtra, Andhra Pradesh, Orissa, Chhattishgarh, Haryana, and Tamil Nadu, through a network of central and decentralized nurseries. Till date 80 million plants have been distributed covering approximately 16,000 hectares land belonging to 13,300 farmers. Long-term target is to progressively increase this farmer base to 60, 000 farmers and annual planting to more than 70 million plants. Community development and upliftment of the marginalized class have also been identified as focus areas. BILT has joined hands with Pratham, an NGO that runs primary education programs all over the country

Strategic Management Report

3. Mintzbergs deliberate to emergent strategies

Strategies can be classified on the basis of the following three conditions How well an idea in mind was completely documented Complete buy in of the idea inside the organisation External environment should behave exactly as per the planning Ballarpur was incorporated on 26th April 1945, at Nagpur. It manufactured all kinds of paper and allied products, Vanaspati, Chemicals, Tin Containers and soaps. The company has performed exceedingly well over the years. 'Three Aces' (paper) and 'Wisdom' (stationery) were its first two brands. Over the years the company has grown big and has six manufacturing units across India. Though the Paper industry has been cyclical over the years, the pattern has been very much predictable. Hence, I feel the strategy type of Ballarpur industries in the early days was planned strategy. However, BILT was taken under the Avantha group. The group has of late been trying to build a brand of its own. The group is being led by Gautam Thapar. A brief insight into how Gautham Thapar has worked over the years would help us in getting an understanding into his leadership style. In his initial days Gautam was asked to rescue sick companies like pulp manufacturer AP Rayons. He did so with great success. Gautham Thapar salvaged the empire's bleeding outposts, reinvigorating the group's ailing flagship -- paper manufacturer Ballarpur Industries Ltd. (BILT) -- and participating in the split of the group into four separate entities in 1998. But the next three years were disastrous for the company, and in 1998, Gautam took over as managing director. He has been successfully running the show since. Gautam has renamed the US$3 billion group Avantha. Its two major companies are the $1.7 billion power transmission and distribution equipment manufacturer Crompton Greaves and the $600 million BILT. It has a number of smaller outfits such as BILT Tree Tech (forestry), Global Green Company (India's largest exporter of gherkins, pickles and the like), Solaris Chemtech (a manufacturer of caustic soda and allied chemicals), Avantha Power & Infrastructure (coal-fired power) and Avantha Technologies (technology outsourcing services). Avantha now has globalization on the agenda. Its overseas acquisitions began in 2005 with Crompton Greaves taking over Belgium-based power transformer maker Pauwels. In September 2008, Global Green acquired Hungarian foods company Puszta Konzerv. The group is targeting revenues of US$10 billion and a market capitalization of US$25 billion by 2013. Looking at the way he has run the business over the years, we can observe that he had been actively involved in each of the strategic decisions and not someone who would give free reign to any of his sub-ordinates as far as the decision making is concerned. I feel, Ballarpur industries under Gautham Thapar has of late been following the Process Strategy

Strategic Management Report

4. Industry Evolution

Ancient Indian Writing Materials

In India, the available writing materials were generally of two types: hard and soft. Stone, metal, shells and earthenware were the examples of hard material. Engraving, embossing, painting and scratching were used for writing. Soft materials were wooden board (pati), dust (dhuli), birch-bark (bhurja-patra), palm-leaves (tada-patra), leather (ajina), cotton cloths (karpasika pata) and paper The Chinese prisoners of war brought to Samarkand after the battle of Atlakh near Talas, first introduced (AD 751) the technique of papermaking from linen, flax or hemp rags based on methods used in China. In India, the first paper industry was developed in Kashmir, established by Sultan Zainul Abedin (Shahi Khan) of Kashmir in 1417-67 AD. With the rapid demand of writing materials the paper making centers were established in different parts of the country like in Sialkot (Punjab); Zafarabad in district Jaunpur (Oudh); Generally Indian papermaking centers produced glazed paper. Rahman has categorized ancient paper into seven categories: Kashmiri, Ahmedabadi, Hyderabadi, Faizabadi, Khasah-i-Jahangiri, Kanpuri and Aurangabadi. In 1924, more and more paper mills of India began to use bamboo as main raw material. In 1925, Bamboo Paper Industry (Protection) Act and in 1931, Indian Finance (Supplementary and Extending) Act came into existence which provided the protection, and some more mills appeared on the scene.

Industry Structure
The Indian paper industry consists of 500 mills with mill capacities ranging from less than 1000 t/a to over 100 000 t/a. In 2002, the country's total paper and paperboard capacity amounted to 6.2 million t/a, of which about 5.1 million t/a was registered as operational while the balance 1.1 million t/a was reported as idle capacity. The industry is highly fragmented. Top five producers account for about 25 % of the capacity. The largest paper companies in India are typically owned by large private industrial conglomerates, or by the state. The paper companies belonging to major industrial groups have a better financial structure to carry out large expansion or modernization investments. Most of Indian pulp and paper companies are small, independent producers running only one mill. Most of them are village-scale producers with limited influence beyond their respective market areas. The geographical concentration of the industry is determined by market access, raw material availability and availability of other production inputs (water, electricity, skilled labour, etc.). The main production centres are: Bombay area, Delhi area (widely spread in Uttar Pradesh, Punjab and Haryana), around Kolkata in West Bengal and north of the city of Madurai in Tamil Nadu. The Indian paper machines are mostly small units. In an international comparison, even the largest machines are medium-size, as large-scale machines are today in the range of 400 000-600 000 t/a, and have a trim width up to 10 metres. The following parameters are illustrative of the Indian paper industry: The average capacity of paper machines is about 14 000 t/a Most of Indian paper machines have a trim width from 1.5 to 3.5 m There are only 9 paper machines with trim width of 5 m or more
5

Strategic Management Report

Only 14 machines have capacities 50 000 t/a Major structural changes in the paper industry over the years have been in the use of raw material. The Sabei grass has replaced the bamboo. Modernisation of the plants and reduction in costs are few more changes which have happened. There also has been a general tendency to substitute electric drive for the machines. There is now a wider range of output and marked improvement in the quality. India now manufactures almost all qualities of paper. Also, India now manufactures satisfactory quality of drawing cartridge. However, we lack specialisation. Ours is a combined pulp-making and paper making industry, whereas the paper mills in Europe and America get the pulp readymade. In the future, the industry is projected to go up with the leap in technology, Capacity and quality. By 2020, India is projected to be the top 5 paper producing countries with a per capita consumption close to Asias average of 35 kg per person with integrated paper mills of over 1 million TPA. Finland, Sweden and Indonesia control 35% of worlds pulp production. With the projected growth, India is expected to challenge the existing countries. However, with the major economies of the world under the cloud of economic slowdown, the industries sentiments have taken a hit if not the actual performance. Therefore, the industry must look into developing the local market which has provided it with much solace in these tough times. The Indian paper industry with the support from the Government has therefore a good future ahead and efforts are required by the industry to improve their competitive strengths with the support of Govt.

Strategic Management Report

5. Porters 5 Forces analysis of BILT

Potential Entrants

Suppliers Power

Industry Rivalry

Buyes Powers

Substitues

Industry Rivalry: The industry rivalry for BILT from its competitors is very high.
Right now the market share of BILT is around 11% whereas for Tamilnadu Newsprint its 12%. The other players in the market form close to 52% which posed a serious challenge.

Suppliers Power: The bargaining power of suppliers is high because of the high
demand for Pulp. However, Since BILT has its own pulp manufacturing unit, the power of suppliers is not as much when compared with other players in the market.

Buyers Power: The bargaining power of buyers in the market is also very high
because of the existence of many players.

Potential Entrants: The threat of new entrants is low. This is because the industry
already has many players. Moreover, the start-up costs of the new business are very high. Also, the fact that the availability of the raw material is a serious issue, many new players would think twice before entering this business.

Substitutes: Threat of substitutes is moderate because of the high switching costs and
also the buyers perception. Moreover, paper has remained as the most preferred material for writing and it faces no serious threats from any of the new materials. However, the emergence of e-books and use of computers and laptops for exchanging documents and reading books might pose a considerable threat to the business.

Strategic Management Report

6. Generic Strategies, capabilities, and competitive advantage

Innovations
The basic production processes on which firms rely have undergone a fundamental transformation since the early 1800s, beginning with the invention of the Fourdrinier paper machine in France and England which paved the way for mass production of paper products, much like Henry Ford's production line did later for automobiles. Where earlier production processes relied on the craft knowledge of skilled operators and superintendents, newer production processes incorporate sophisticated sensors, information systems, and software-based process controls. Today, new paper machines are nearly 40 feet wide, hundreds of feet long, and over two stories high. The Industry's capital-intensive pulping and papermaking facilities, are designed as high tech computer-based operating systems with paper machines that run at speeds exceeding 60 miles per hour with production outputs of up to 500,000 tons per year. This significant technological advancement in the Paper Industry has required investments of hundreds of billions of dollars. This has required firms to develop and manage increasingly complex relationships with external and internal suppliers of ever more complex production equipment (including software controls). Automated process control systems also have introduced far-reaching changes into the types of skills needed by production crews, requiring firms to make substantial investments in the training of hourly workers and supervisors, growing numbers of process engineers, and new organizational systems for operations management. These shifts have required a highly focused effort on the part of Paper Industry's management teams, which have devoted much of the last several decades to developing and perfecting their massive, capital-intensive operating systems. The net outcome has been a management paradigm that has been steeped in the construction of large, complex technical systems for the mass production of paper, thereby achieving economies of scale. The Industry's world view has thus been long term in focus, technically and production efficiency-oriented and, by design, risk-averse. Some of the other major innovations in the paper industry over the years have been listed below: Minimisation of paper consumption by the introduction of innovative and efficient systems. Maximising Recycled paper content The paper industry attributes this apparent reduction to a rising proportion of energy from wood fuel and black liquor. Black liquor is a sludge of chemicals and lignin that is a by-product of the pulping process. Emissions from these sources are currently excluded from measurements of greenhouse gases. However, this practice is extremely controversial and is currently being reviewed by the U.S. Environmental Protection Agency and others Exexposure to international products have forced the Indian firms to change pro duct packaging.Firms have started improving the printing and packaging of their produ
cts to retain the product appeal among the customers both in Indian and abroad 8

Strategic Management Report

7. Generic Strategies, capabilities, and competitive advantage

Generic Strategies

BILT
Ballarpur industries have adopted the low cost generic strategy. BILT is planning to become a fully integrated paper player in the industry. It has a large distribution network to cater to the fragmented paper market and it has a vertically integrated business model from wood to pulping, chemicals and captive power. BILT's cost structure would improve after the successful completion of its backward integration into hardwood pulp, which will generate significant savings over market pulp costs. Additional cost savings will be driven by the company's increasing reliance on own wood from its Malaysian plantation, the pulp from which would be brought to India from September 2011. This coupled with an increase in its scale of production should lead to EBITDA margin expansion. BILTs strategy is to operate in low-cost economies such as India and Malaysia, which also have strong domestic demand. BILT also wants to ramp up its distribution network by foraying into the retail business (office supply and stationery retail), while moving up the value chain by shifting the production mix towards higher value products. This will enable the company to improve revenues.

JK Papers
JK paper has been adopting a focus-Low cost strategy with its focus on Value added segments. It has identified few of the high growth focus segment such as coated paper and boards. Increased consumption of hardwoods from 33% to 66% of total raw material, has improved productivity and brought cost savings. The company too has concentrated on vertical integration through plantations so as to reduce cost.

TamilNadu Newsprint & Papers limited

TNPL offers high-quality surface sized and non-surface sized paper to suit the needs of modern high speed printing machines. The paper produced by TNPL is eco- friendly as the pulp is manufactured out of renewable raw material and is subjected to Elemental Chlorine Free (ECF) bleaching. It produces Newsprint and Printing & Writing Paper using bagasse, a sugarcane residue, as primary raw material. Hence the Strategy being adopted by TNPL is Differentiation strategy. The factors which has helped share TNPLs strategy are Eco-friendly technology, abundantly available raw material base, captive power supply, highly flexible productmix and convertible paper machines.

Strategic Management Report

Financial Ratios
D/E Reserves ROE PAT/sales Raw Material/Sales Employee Cost/Sales power & fuel/sales Selling & Admin/Sales Sales/TA Sales/FA Sales/CA Sales/Inventory Ta/Equity ICR BILT JK TNPL 0.607243 0.914195 1.624936 1487.49 506.88 846.41 1.86% 18.07% 16.27% 2.75% 7.67% 11.96% 52.00% 7.01% 17.32% 7.09% 0.421859 1.155219 2.090658 4.073908 1.607249 2.081558 46.48% 9.41% 9.81% 14.14% 1.231131 1.643413 5.70469 10.88199 1.914178 3.982683 26.29% 9.05% 24.53% 7.89% 0.518117 0.567706 2.944003 6.075561 2.624925 5.410714

As can be seen from the ratios, though BILTs strategy has been to invest in capital assets through vertical integration, the reserves havent been used and are sitting idle on the balance sheet. This has also brought down the ROE which is only 1.9% as compared to 18% and 16% for JK and TNPL respectively. The PAT/Sales is also very less when compared to its competitors. Going deeper into the operating ratios, we can observe though even though raw material sourcing should have been cheaper for BILT due to its own raw material source, it still ends up spending more when compared to its competitors. Also, the Power & fuel/Sales ratio again is quite high when compared to JK even though BILT has its own power generation unit. The sales/Inventory ratio for BILT is very low. This is so because of the high inventories which BILT is presently with. A company which is into cost leadership cannot afford to have such high level of inventories. Using bagasse as primary raw material along with a few other innovations has helped TNPL maintain its operating margins close to 25%. TNPL's raw material as a percentage of sales has been contained within 20% throughout. The same has touched the level of 37% in 2011 for BILT. The Interest coverage ratio for BILT is less when compared to its competitors even though it has better reserves.
10

Strategic Management Report

8. On Business Groups, Leadership style, and restructuring

Ballarpur Industries Limited (BILT) is a flagship of the US$ 4 bn Avantha Group and India's largest manufacturer of writing and printing (W&P) paper. The current chairman of the company is Gautam Thapar, who succeeded his late uncle L.M. Thapar. Lala Karam Chand Thapar established company in 1945 as Ballarpur Paper and Straw Board Mills Limited, with 'Three Aces' (paper) and 'Wisdom' (stationery) being its first two brands. In 1969 Shree Gopal Paper Mills Limited in Yamunanagar was merged with the company. In 1975, the organisation was renamed Ballarpur Industries Limited. In the 1990s the company was under siege from Southeast Asian companies, who set up Greenfield projects in India. But in 2001, Ballarpur Industries turned around and was able to buy out its Indonesian competitor's Sinar Mas Group Indian division. The name BILT emerged after a corporate rebranding exercise in 2002. Today, it is a well-established name, associated with not just paper, but also stationery products. BILT has six manufacturing units across India, which give the company geographic coverage over most of the domestic market. BILT has a dominant share of the high-end coated paper segment in India. The company accounts for over 50% of the coated woodfree paper market, an impressive 85% of the bond paper market and nearly 45% of the hi-bright Maplitho market, besides being India's largest exporter of coated paper.

Avantha Group
BILT is part of Avantha business group which is family owned. Avantha Group is an Indian business conglomerate in India chaired by Gautam Thapar. The US$ 4 billion company is one of Indias largest business conglomerates. Its businesses include power generation and distribution, power transmission and distribution equipment and services, paper and pulp, food processing, farming, forestry, chemicals, infrastructure, Information Technology and Information Technology Enabled Service (ITeS), also referred to as business process outsourcing (BPO).[3] Avantha Group operates in fifteen countries with 20,000 employees. Business units include, Crompton Greaves, (CG) Indias largest power transmission and distribution Equipment Company, and Ballarpur Industries (BILT), Indias largest paper manufacturer, both listed on the Indian Stock exchanges. Other group entities include Solaris ChemTech Industries, Avantha Power & Infrastructure, Biltech Building Elements, Salient Business Solutions and Avantha Technologies. Solaris ChemTech Industries is Indias largest manufacturer of bromine, brominated flame retardants, specialty bromine chemicals, and orthophosphoric acid. Avantha Power & Infrastructure is involved in power generation, while Biltech Building Elements manufactures lightweight autoclaved aerated concrete (AAC) from fly ash. Salient Business Solutions and Avantha Technologies are IT and IT-enabled services companies.

11

Strategic Management Report

BILT had revenue of US$ 0.916 FY 2011. It contributes to 23% of the revenues of Avantha group. BILT underwent a corporate rebranding exercise in 2002. BILT also ventured into the stationary business with the launch of its new brand MATRIX comprising of notebooks which changed the stationary landscape in India. Matrix went on become a premium brand and BILT has since then expanded its products in the stationary to pencils, Tapes, Files & folders to Art series. BILTs acquisition of SFI in 2007 was a watershed event it was the first overseas acquisition by an Indian paper company. This acquisition transformed BILT into a major regional player, and elevated the company's ranking among the global top 100. 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) more than 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 done in 1998. Previous to that, three years were disastrous for the company, and in 1998, Gautam Thapar took over as managing director He was instrumental in the revival of the group and since then has been performing a fabulous job. CG acquired Pauwels (Belgium) in 2005, Ganz (Hungary) in 2006, Microsol (Ireland) in 2007, Sonomatra (France) in 2008, MSE Power Systems (USA) in 2008 and Power Technology Solutions (UK) in 2010. BILT acquired Sabah Forest Industries (SFI) of Malaysia in 2007. Another group entity, The Global Green Company, acquired Intergarden (Belgium) and Puszta Konzerv (Hungary), while in 2010, the group announced the acquisition of US-based Pyramid Healthcare Solutions, a healthcare BPO firm. The new identity, Avantha, was launched worldwide on 15 November 2007.

12

Strategic Management Report

9. Expansion Strategies
Ballarpur industries have diversified heavily over the years. The revenues from the paper and pulp division accounted to roughly around 67% whereas the stationary division accounted to around 33%. Hence the diversification type of BILT can be termed as Related. However, within the paper and pulp division, the company has concentrated on lowering the cost of raw materials by going for vertical integration. BILT acquired Sabah Forest Industries which operates an integrated paper and pulp mill in Malaysia. Also, it has concentrated on Farm Forestry since 1990 through its subsidiary company BILT Tree Tech Ltd. (BTTL). Backward integration was also done with its caustic soda/chlorine manufacturing facility, which is a vital raw material in the production process of paper. BILT has expanded its presence in global market through the acquisition of Malaysian firm Sabah Forest Industries which too was into the business of paper and pulp. Hence, with in paper and pulp division, the companys diversification can be termed as Related linked. However, in the stationary division, BILT has launched numerous products. It started with the premium notebook brand MATRIX. It then went on to launch stationary products such as pencils, Tapes &Glue sticks, sticky notes, Art series, Files & Folders etc. This can be termed as an unrelated diversification. On the whole, BILTs diversification type can be termed as Related Linked diversification. Avantha group on the other hand has many companies each in different sectors. Some of the industries under Avantha group include BILT which is into paper and pulp industry, Crompton Greaves Ltd. which is into Electric engineering, The global green company which is into retail and food service, Solaris chemtec which is into chemicals, BILT power limited which is into power generation, BILTECH which is into construction and few more. Also, Avantha group has acquired heavily across the geographies. CG acquired Pauwels (Belgium) in 2005, Ganz (Hungary) in 2006, Microsol (Ireland) in 2007, Sonomatra (France) in 2008, MSE Power Systems (USA) in 2008 and Power Technology Solutions (UK) in 2010. BILT acquired Sabah Forest Industries (SFI) of Malaysia in 2007. Another group entity, The Global Green Company, acquired Intergarden (Belgium) and Puszta Konzerv (Hungary), while in 2010, the group announced the acquisition of US-based Pyramid Healthcare Solutions, a healthcare BPO firm. With such high diversified businesses across sectors and geographies, the diversification type of Avantha group is Unrelated Multi business.

13

Strategic Management Report

10.

Strategy implementation issues

One of the most important raw materials for the paper and pulp industry is the availability of wood. However the availability of wood might create a serious problem in the coming future. The depletion of forests and restrictions might be a major reason to worry. Moreover, BILT has always been in the low cost business. However, of late they have been trying to enter into high value products which would compel them to price their products much higher. This would go against the image that BILT has in the market. With growing competition where retaining the market share is going to be serious challenge, this could cause even more trouble.

11.

References

www.wikipedia.com http://www.bilt.com/ http://www.avanthagroup.com/ http://www.biltpaper.com/ http://www.slideshare.net/jaaaspal/indian-paper-industry-presentation http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/BallarpurIndustries-Ltd/500102 http://www.infinityfoundation.com/mandala/t_es/t_es_tiwar_paper_frameset.htm http://www.iloveindia.com/economy-of-india/paper-industry.html

14