Tuesday, January 08, 2013

India has been late to the party

The paper industry in India has been late to the party when it comes to creating strong brands, but they can’t afford to stay laggards in this domain anymore

In an effort to create a strong presence in consumer segment, ITC launched its ‘Papercraft’ brand in the premium stationery segment and ‘Classmate’ brand in the mass stationery segment. The most important part was the way their ads communicated the quality of the products. This was one of the very first keen attempts by a large player in India to create a positioning of superior quality and also an environment friendly image. To add to it, their CSR campaign, which said that Re.1 from the sale of every Classmate notebook is contributed towards education of underprivileged children, also proved a great fit for their branding attempts. Today, ITC’s paperboards, paper and packaging business fetches them Rs.819.24 crore in revenue (year ending March 31, 2011) & a 31% growth yoy. The company’s proposed marketing budget for the segment for 2012 is projected to be Rs.350 million with a yoy leap of around 15%.

For 2012, the Rs.3000 crore Ballarpur Industries Ltd. (BILT) has upped its advertising budget from Rs.100 million in 2009 to around Rs.180 million in 2012. As much as 65% of this goes towards print advertisements while banners, hoardings, billboards, et al make the rest. BILT has also been a regular sponsor of BILT Skins Golf Tournament since 2002. The company presently owns a premium range of paper-based stationery products under the name ‘BILT Matrix’. It also has various brands of printing paper like BILT Magna Print and BILT Wisdom Print. JK Paper also owns various well known brands like JK Excel Bond, JK Ultima and JK Evervite to name a few.

However, the industry needs to really step on the gas on branding now, with the threat of cheap imports from China and Indonesia looming large. So far, growth in the domestic paper industry has been at around 9% over the past decade compared to a mere 4.2% average yearly growth for Chinese paper products in the same period. But this may not last long. “These imports are at least 25-30% cheaper and unless Indian companies come out with an image of superior quality, they will lose the war”, says M. L. Pachisia, member, Indian Paper Manufacturers Association. Over time, Chinese players like Nine Dragons, Shandong Chenming and Lee & Man have acquired global prominence. The interesting thing to note, however, is the fact that besides price, Chinese manufacturers have also been lauded globally for their unwavering adherence to environmental standards. A. K. Ghosh, VP-Marketing Sales, JK Paper, admits in an interaction with 4Ps B&M, “Brand identity to paper globally has started much earlier than in India. This is because many top paper companies are multinationals and sell their paper in many countries. Indian manufacturers fare well in terms of branding efforts but we are constrained by the amount we can spend on marketing and branding.”


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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