namit project on distribution

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A Project Report on

A Study on Distribution channel At

BILT Graphics Paper Product LimitedUnit Ballarshah

Project Report Submitted in partial fulfilment of

Requirement for the award of degree of Master of Business Administration

ToPUNE UNIVERSITY

Submitted by

Mr. SAROJ S. NISHADMBA (MARKETING)

(2011-2013)

Under the guidance of Mrs. .

Dept. of MBA

DNYANSAGAR INSTITUTE OF MANAGEMENT ANDRESEARCH,BANNER ,BALEWADI, PUNE-411045


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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 beingsubmitted in partial fulfilment for award of degree of MBA from Matrix BusinessSchool

This content of this report is based on the information collected by meduring my tenure at of BILT Graphics Paper Product Limited at ballarpurdistrict chandrapur, maharashtra for two month of training from 02 nd May to 22 rd

July 2012.

Place: Pune Mr. SAROJ S. NISHADDate: 22 nd July 2012 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/ 4243Fax: 0124-280 4260Email: [email protected]: www.bilt.com
mailto:[email protected]://www.bilt.com/http://www.bilt.com/mailto:[email protected]


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ACKNOWLEDGEMENT

A large number of individual contributed to this project. I am thankful to allof 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 aspossible, they have been fully acknowledged at the appropriate place. I express mygratitude 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 contributiontowards 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 theProject job in timely and also sparing his valuable time and extending all necessarysupport 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 towork on this project at BILT GRAPHIC PAPER PRODUCTS LIMITED,BALLARPUR.

I also express my deepest gratitude to Mr. Shekhar Sonar, (Manager-MSD) for their kind support, inspiration, encouragement and giving the freedom tocomplete the project.

Mr. SAROJ S. NISHAD


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1. EXECUTIVE SUMMARY

The competitive and global nature of todays business environment dictatesthat this direction and transformation takes place in a way that is efficient and

effective as possible. Continuing emphasis on time, cost and quality improvementshave sharpened the need to coordinate and cooperate with trading partners aroundthe world to achieve results that allow customers to be successful. Thusdistribution channel focuses on the integration of activities across severalcompanies to manage the flow of products, services, people, equipment, facilitiesand 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 informationregarding BILT Graphic Paper Product Ltd. (BGPPL), the ConglomerateAVANTA Group of which BILT is a Strategic Business Unit. This report providesan 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 studyof different brands of paper in BGPPL and study of the sales trend comparisonwith the different product of competitors in market. To study the shipment of goods (Paper) to the different zones and also to optimize the shipment tostreamline the distribution process so as to make sure that the product is deliveredto business consumer. Methodology adopted will be studying the process,collecting information on problems occurred through secondary database andanalysing through help of experience survey, collecting primary information fromonsite officials and with their help doing onsite experiment, and further usingdifferent technique to improve the process while moving forward with the task.The learnings will be understanding the organization structure, gaining anoverview of work performed in all the other department, learning the distributionchannel which makes sure that the value is delivered to the customer,understanding the sales of different paper products in BGPPL.


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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. infightingbetween local distributors)


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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).


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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 thestock, 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.


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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


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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.


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2. PAPER INDUSTRY OVERVIEW

2.1) Global Paper Industry Overview:

The total consumption of paper globally in 2009 was estimated as 364.0million tonnes. Asia contributed the maximum to this consumption pattern with atotal consumption of 155.7 million tonnes, followed by Europe and North Americaat 93.5 and 78.1 million tonnes respectively. The global paper and paperboardindustry is dominated by North America, Europe and Asia. Global paper andpaperboard production stood at around 380 million tons in 2008, the US leadingwith over 100 million tons and accounting for nearly a third of the worldsproduction. With a large number of paper production capacities shutting down in

North America and growing capacity creation in Asia (especially China), the latteraccounts for over a third of global paper production, while Europe and NorthAmerica account for about 30% and 25% respectively. Interestingly, even as percapita paper consumption in the US is 300 kg, it is 35 kg in Asia, implyingexcellent growth prospects.

Paper demand is unevenly distributed as 72% of the worlds paper isconsumed by 22% of the worlds population in the US, Europe and Japan. Theworld demand for the material is expected to grow by around 3% annually,reaching an estimated 490 million tons by 2020, with significant growth comingout of Asia and Eastern Europe.

Asia dominates the demand for paper and paperboard; consumptionincreased at a CAGR of 7% across 2003- 08. China is now the worlds second -largest household paper consuming nation.


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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 fromTable 2 below, Indias per capita consumption of paper averaged around 8.4 kgs in2009, as compared to a global average of 54.3 kgs (Source: CRISIL Research


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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 aroundRs. 2918 crore (USD 0.69 billion). The industry provides employment to morethan 0.12 million people directly and 0.34 million people indirectly. The industrywas delicenced effective from July, 1997 by the Government of India; foreignparticipation is permissible. Most of the paper mills are in existence for a long timeand hence present technologies fall in a wide spectrum ranging from oldest to themost 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 chemicalpulp, 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 theoperating capacity of the industry currently stands at 9.3 million tons. During thisfiscal year, domestic production of paper and paperboard is estimated to be 7.6million tons. As per industry guesstimates, over all paper consumption (includingnewsprint) has now touched 8.86 million tons and per capita consumption ispegged at 8.3 kg.

Demand of paper has been hovering around 8% for some time. During theperiod 2002-07 while newsprint registered a growth of 13%, Writing & Printing,Containerboard, Cartonboard and others registered growth of 5%, 11%, 9% and1% respectively. So far, the growth in paper industry has mirrored the growth inGDP and has grown on an average 6-7 per cent over the last few years. India is thefastest growing market for paper globally and it presents an exciting scenario;paper consumption is poised for a big leap forward in sync with the economicgrowth and is estimated to touch 13.95 million tons by 2015-16. The futuristicview is that growth in paper consumption would be in multiples of GDP and hencean increase in consumption by one kg per capita would lead to an increase in


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demand of 1 million tons. As per industry estimates, paper production are likely togrow at a CAGR of 8.4% while paper consumption will grow at a CAGR of 9% till2012-13. The import of pulp & paper products is likely to show a growing trend.

Foreign funds interest in the Indian paper sector is growing. IFC, theinvestment arm of the World Bank is already associated with at least three of theIPMA member mills

Agro Forestry

In India, the paper industry is primarily rural based with close linkages withfarming 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 isconsuming only about 7 million MT or about 3% of the total wood consumed inIndia; about 90% is consumed as fuel wood.

Additional raw material requirement by 2012-13 is anticipated to be about 8million 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 properecological balance.

Myth and The Reality: While all-pervading myth that continues to slur the imageof the industry is that it perpetually uses forest raw material and consequentlydenudes 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 underpulp wood plantations, mainly degraded marginal lands of farmers. At the currentestimate, wood based segment of the industry uses 80 per cent of the totalrequirement from farm produced wood. In particular, IPMA member mills havebeen actively promoting agro forestry with private land holders/farmers to meetimminent raw material needs in a sustainable manner thereby, positively impactingthe Greening India mission of the Government. Also, the industry initiative hascreated major employment in the remote areas in close proximity to themanufacturing facilities thereby, helping rural development.


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meets its current wood requirements mainly through social/farm forestry andsupplements with purchases made from the State Forest DevelopmentCorporations.

Bagasse/ Straw: Though annual availability of agro residues is large yet, this maynot be able to sustain the future growth of the Industry, taking due account of quality of paper required, environmental issues involved, etc. Moreover, bagasse isincreasingly used by sugar mills for co-generation of power and no more easilyavailable to the paper mills as raw material.

Waste Paper: Recovered fibre consumption is going up globally. In India about850,000-1,000,000 tons of waste paper is being currently recovered annually. Therecovery rate works out to about 20% which is much lower in comparison with65% recovery achieved by many global players. Low recovery is on account of alternate use of paper in wrapping, packing, etc. The utilization rate of recoveredfibre is only 47%. Paper mills are heavily dependent on imported waste paperwhich commands exorbitant price due to inadequate availability. India needs awell-defined and aggressive system for collection, sorting, grading and utilizationrecyclable waste paper to contain imports.

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

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


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certificate for their produce. Though the farm forestry is a sustainable modelpromoted by the paper industry, the FSC principles and criterions are difficult tosatisfy. IPMA is monitoring the move set afoot by the Government of India toestablish 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


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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 ProductionPrinting & Writing paper accounts for a bulk (more than 60%) of total paper/boardproduced by IPMA members. Other significant varieties are corrugated

paper/board and packaging paper. Presented here is respective share of differentvarieties of paper/paperboard produced by IPMA members over the years ingraphical format

65%

17%

12%2% 4%

Varietywise Production %age (2004-05)

P & W Paper

Pkg. Paper

Ctd. Paper/Board

Speciality Paper

Misc. Varities


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62%15%

17%

2% 4%

Varietrwise Production %age (2005-06)

P & W Paper

Pkg. Paper

Ctd. Paper/Board

Speciality Paper

Misc. Varities

62%13%

20%

2% 3%


P & W Paper

Pkg. Paper

Ctd. Paper/Board

Speciality Paper

Misc. Varities


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65%

13%

20%

1%1%


P & W Paper

Pkg. Paper

Ctd. Paper/Board

Speciality Paper

Misc. Varities


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India is among the worlds fastest growing paper markets; an increase inconsumption by one kg per capita can potentially increase annual paper demand bya 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 coatedpaper 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 and350 kg in developed countries (Source: Assocham) , implying a large scope forcorrection.

Export opportunity: A number of European and US paper mills are shuttingdown owing to over capacity and cost issues, an attractive export opportunity forIndian paper mills. Besides, Indian paper manufacturers, utilising agriculture-basedraw material, possess a sustainable growth opportunity on account of growingenvironment consciousness.

Packaging industry: The Rs. 77,570-crore Indian packaging industry (as on April2010) grew around 15% year-on-years (Source: Indianpackagingshow.com). Thepaper 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: CRISILResearch), riding a growth in the pharmaceutical, cigarettes, textile, FMCG,consumer durable and retail segments.

Changing lifestyles: With improving domestic living standards, demand forspeciality paper (tissue paper, fine art paper, business card paper and greeting cardpaper) is expected to increase at around 8% CAGR


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Paper type Uses Varieties Demand drivers Writing andprinting paper

Writing, printing,stationery

Creamwove,Maplitho,paperboard,copier and coatedpaper

Population growth, levelof literacy, public andprivate spending oneducation, level of business activity,increasing presence of modern retail formats andgrowth in the printingindustry

Paperboard Industrial purpose Kraft paper,recycled boardand virgin board

Growth in the packagingindustry, industrialproduction anddevelopment in packagingtechnology andsubstitution by othermaterials

Newsprintpaper

Printing of newspapers andmagazines

Glazed andstandard paper

Growing economy,growing circulation andreadership

Specialitypaper

Tissue paper, fineart paper, paper forspecialisedindustrial usagessuch as steel millkraft, insulationgrades, etc

Duplex, grey andwhite board andMG posters

Consumption of thispaper variety is linked tothe standard of living aswell as per capita income


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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 fivepaper machines installed in the mill, which produces paper of different M.F & M.Gvarieties 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.


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2) ITC LimitedITC is one of the world's most modern and contemporary manufacturers of packaging and graphic series of boards. ITC's Paperboards business has amanufacturing 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 thePrinting and Writing segment. The company operates two plants in India, one inthe 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 around120% capacity utilization. The aggregate annual output is over 180,000 MT perannum 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 saleof Specialty Papers is a flagship Company of the M.P. Jatia Group of Companies.Beginning with manufacture of Indias first indigenous Greaseproof and Glassinepapers for packaging for the first time in India, PUDUMJEE went on to extendrange 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 andtypes, Tissue Papers, catering to wide range of industrial applications speciallymanufactured 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


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production in 1962, on commissioning a 20,000 MT per annum integrated facilitycomprising a pulp mill and two paper machines capable of producing, writing,printing, and Kraft and poster varieties of paper. The plant capacity was expandedto 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 operatingefficiency, captive power generation capacity. The current installed capacity of thecompany 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 installedcapacity of 2,30,000 MT per annum, TNPL is the largest producer of bagassebased paper.

7) The West Coast Paper Mills LtdPromoted by Shree Digvijay Cement Company Limited, Sikka, and Gujarat in

1955 and located at Dandeli in Karnataka, the mill manufactures writing, printingand wrapping papers. The Mill is based on conventional Kraft process using woodas main raw material. Annual Production capacity is 157,750 TPA. In 1964 thecompany promoted The Andhra Pradesh Paper Mill Ltd., to take over AndhraPaper 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. Khannahas also become the first paper mill in India to produce high quality writing andprinting board from 100% deinked wood free recovered paper across the globewith a focus on demand markets and exporting their products to the SAARCcountries, Africa and the Middle East.Khanna Paper Mills Private Limited, paper is traditionally identified with readingand writing, communication has now been replaced by packaging as the singlelargest category of paper use at 41% of all paper used. Khanna Paper Mills is thelargest paper mill production house of its kind and is among the top ten in paperproduction in India.


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9) Century Paper Mills Century Pulp and Paper (CPP) located at Lalkua, Nainital, Uttarakhand a divisionof 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 withina short span of time.

Percentage ShareThe percentage share of IPMA members in overall IPMA production data over thelast four years is presented here:

ABHISHEK, 2%APPM, 6%

BILT, 17%

CENTURY, 6%

EMAMI, 1%HPC, 9%

ITC, 14%

JKPL,7%

KHANNA, 5%

MPM, 1%

OPM, 3%PADUMJEE, 1%

RAMA, 1% SPB, 5%

SIRAPUR, 3%

STAR, 3%

TNPL, 8%

WCPM, 7%YASH, 1%

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

BILTCENTURYEMAMIHPCITCJKPLKHANNAMPMOPMPADUMJEERAMASPBSIRAPURSTARTNPLWCPMYASH


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BILT, 16%

CENTURY, 5%

EMAMI, 1%HPC, 9%

ITC, 15%JKPL,7%KHANNA, 7%

MPM, 1%

OPM, 3%

PADUMJEE, 1%

RAMA, 0% SPB, 5%

SIRAPUR, 3%

STAR, 3%TNPL,

9%

WCPM, 7%YASH, 1%


BILTCENTURY

EMAMIHPCITCJKPLKHANNAMPMOPMPADUMJEERAMASPBSIRAPURSTARTNPLWCPMYASH


BILT, 18%

CENTURY, 5%

EMAMI, 1%HPC,8%

ITC, 16%

JKPL, 7%KHANNA, 7%

MPM, 1%

OPM, 3%PADUMJEE, 1%

RAMA, 0%SPB, 5%

SIRAPUR, 3%STAR, 3%

TNPL,9%

WCPM, 7%YASH, 1%

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

ABHISHEKAPPMBILTCENTURYEMAMIHPCITC

JKPLKHANNAMPMOPMPADUMJEERAMASPBSIRAPURSTARTNPLWCPMYASH


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BILT, 17%

CENTURY, 8%

EMAMI, 1%HPC,8%

ITC, 16%JKPL, 7%

KHANNA, 7%

MPM, 1%

OPM, 3%

PADUMJEE, 1%RAMA, 0% SPB, 5%

SIRAPUR, 3%

STAR, 3% TNPL,9%

WCPM, 6%YASH, 1%


BILTCENTURY

EMAMIHPCITCJKPLKHANNAMPMOPMPADUMJEERAMASPBSIRAPURSTARTNPLWCPMYASH


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Paper Mill Plant Locations all over India

Growth of paper industry in IndiaThe 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 technologyup gradation fund (TUF) for improvement of energy conversation, quality upgradation and product improvement. The Indian paper industry is growing at 8 percent per annum. It is also, expected to grow by 10 per cent by the year 2010. IPMAalso, urged the Government to reduce the excise duty from 12 per cent to 8 per centfor all type of paper mills as they are looking to up gradation of 25 per cent of theircapacity.

Indian paper industry has direct linkage with educational sector,manufacturing sector, as a result near about 20 per cent direct and indirect taxationon paper industry including 12% VAT, Octroi, etc. Reduction of direct and indirecttaxation can make more competitive player in the world.


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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 risingeconomic growth, share of the paperboard segment in total demand has increased.The paperboard segment accounts for around 47% of demand, while the writingand printing, newsprint and speciality paper segment accounts for nearly 30%,20% and 3%respectively. It is expected that by 2014, paperboard demand willgrow at a 7% CAGR due to a healthy growth in industrial production and recoveryin the consumer goods sector. Demand for writing and printing paper is expectedto grow 6.5% CAGR, driven by the governments thrust on education and overall

economic growth.


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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 AvanthaGroup lies in the erstwhile Thapar Group, amongst India's top ten businesshouses, founded by Lala Karam Chand Thapar in Calcutta (now Kolkata) overeighty years ago. Indias se cond largest producer of coal prior to coalnationalisation, the Thapar Group also had interests in sugar, paper, chemicals,textiles, banking, insurance, and engineering products and services. The ThaparGroup went on to establish some of Indias most res pected institutions, includingOriental Bank of Commerce, Oriental Insurance and Thapar University, to name afew.

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 theold conglomerate and Mr. Gautam Thapar represents the third generation of theillustrious 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 byMr. Gautam Thapar was rebranded as Avantha, and the new identity launchedworldwide on 15th November 2007. Today, the Avantha Group has businessinterests in diverse areas, including power transmission and distributionequipment and services, paper and pulp, food processing, energy and

infrastructure, farm forestry, chemicals, IT and ITES. With an impressive globalfootprint, the Group operates in over ten countries with 20,000 employees.

Group companies include Crompton Greaves Limited (CG), Indias largestpower equipment company, and Ballarpur Industries Limited (BILT), Indias largestpaper manufacturer, both listed on the Indian stock exchanges. Recently, CG


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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 acquiredIntergarden (Belgium) and Puszta Konzerv (Hungary). With these acquisitions,products from the Group are not just at the apex in India but ranked at theuppermost worldwide.

Avantha Groups other successful companies include Solaris ChemTechIndustries, Avantha Power & Infrastructure, Biltech Building Elements, SalientBusiness Solutions and, of course, Avantha Technologies. Across Avantha, goodcitizenship is a defined objective, with focused emphasis on education,community development and healthcare. Avantha demonstrates strongleadership 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; andthe Sanskrit 'ntha' stands for stability. Also, the last three letters 'Tha' are shortform for Thapar.


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3.1) INTRODUCTION TO BALLARPUR INDUSTRIES LIMITED

Ballarpur Industries Limited ( BILT ), part of the US$ 3 billion AvanthaGroup, is the undisputed leader of the Indian paper industry. It is India's largestmanufacturer and exporter of paper, with a strong presence in all segments of theusage spectrum, including writing and printing (W&P) paper, industrial paper andspecialty paper. Complementing this is a diversified production infrastructure withsix 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 hasalso transformed the paper industry from its traditional 'commodity market'mindset to a branded one. A concerted program of innovation and technologicalexcellence helps it proactively respond to the needs of each individual segment.Today, BILT not only has the range, but also a well-entrenched distributionnetwork that enables it to reach customers, any time, any place.

As the industry leader, BILT is committed to developing its businesstowards ecological, social and economic sustainability. Community developmentand upliftment of the marginalized sections have been identified as focusareas. BILT offers vocational training and program on micro financing for theunemployed. The company works extensively with the communities on a broadrange of issues, including health, education and strengthening of thevillage panchayat system through training of members on issues relating togovernance, development, and fund management. BILT , in collaboration with itspartner NGOs, has helped established Self Help Groups (SHGs) at the village levelto implement its social programmes. It has also joined hands with Pratham, anNGO that runs primary education programmes all over the country.


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VISION & MISSION of BILT

Vision Statement -: To become a leading creator of Shareholder Value in thePaper Industry.

Mission Statement -: To consistently outperform expectations and deliver superiorvalue to both our Customers and Stakeholders.


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3.2) Indian and Global Operations of BILT:

Unit Locations OF BILT all over INDIA

1. UNIT BALLARPUR (Maharashtra)2. UNIT BHIGWAN (Maharashtra)3. UNIT SHREE GOPAL (Haryana)4. UNIT SEWA (Orissa)5. UNIT ASHTI (Maharashtra)6. UNIT KAMALAPURAM (Andra Pradesh)


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With the acquisition of Sinarmas India renamed as BILT Graphic Paper ProductLtd (BGPPL), which brings with it manufacturing capability of internationalcalibre, more than the addition to its capacity. This acquisition brings with it

immense synergies and growth opportunity that are completely aligned to ourcorporate focus, this move has been in line with the philosophy to actively pursueacquisition opportunities to strengthen core business and to achieve an incrementalfinancial performance one long-term basis. BILT obtain a 40% market. Anincrease is the proportion of value added paper sales would enable the company topost higher realizations even without an increase in paper prices.

OPERATIONS

BILTs consolidated paper manufacturing operations span across sixproduction Units, five of which are in India and one in Malaysia. The Indian Unitsare located at Ballarpur (Maharashtra), Bhigwan (Maharashtra), Shree Gopal(Haryana), Sewa (Orissa) and Ashti (Maharashtra). The Malaysian Unit, SFI is inthe State of Sabah. The rayon grade pulp manufacturing Unit is located atKamalapuram (Andhra Pradesh). The details of operational developments acrossthe different Units are given below.

Unit: Ballarpur (Maharashtra)During 2010-11, Unit Ballarpur produced 230,752 MT of paper. There has been asignificant increase in capacity of Unit Ballarpur with the installation of a newstate of art paper machine, which was commissioned by Allimand, France with aninstalled capacity of 165,000 MTPA. During 2010-11, this new machine produced118,134 MT of Paper. The state of art machine and finishing section has enhancedquality, provided better packaging for customers and reduced manpowerengagement.

On the product development front, the Unit has successfully manufacturednew shades in various products, namely BILT Magna Print, Wisdom Print, MICRCheque Paper, Maplitho and Extensible Sack Kraft Paper (ESKP) to meetcustomer requirements, in domestic as well as export markets.

At the back-end, bleached pulp production was 115,329 MTPA. Enhancedoperational efficiencies resulted in increased pulp production with uniform


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brightness and increased viscosity. The Pulp mill operations have been furtheroptimized with change in the raw material mix of wood and bamboo, which hasresulted in enhanced performance of the paper machines in terms of quality of paper produced.

Environment management and resource conservation continued to be a keyfocus area. Water conservation is a key area where the mill has reducedconsumption by over 30 per cent per MT of paper produced. This was achieved byadopting the 3-R (Reduce-Reuse-Recycle) methodology, which is much lower thanthe national standard. While the Unit has added additional equipment forimproving quality of paper which has increased electrical load, power consumptionwas reduced by 5 per cent per MT of paper produced. This was achieved throughimplementation of various energy saving innovations across the pulp and paper

manufacturing process. During the year, Non-Condensable Gas Incinerationsystem was commissioned for control of bad odour from the plant.

As a part of technology adoption for energy and environmentalsustainability, the existing pulp mill is being replaced with a modernized pulp millfor which civil and erection work is in progress. The modernized pulp mill willhave all advanced energy and resource efficient control systems.

Achievements and awards

Unit Ballarpur is certified for the FSC COC and Control Wood certificate by theForest 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 BallarpurP.O. Ballarpur Paper Mills,Distt. Chandrapur, Maharashtra-440 901Tel: 07172-240200Fax: 07172-240548


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Unit: Bhigwan (Maharashtra)During 2010-11, Bhigwan PM-1 line produced 142,646 MT of Coated Paper andCoated Boards - an increase of 9,412 MT over 2009-10. The newly commissionedstate 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 was283,316 MTPA, an increase of 34,333 MTPA over 2009-10.

The Unit successfully developed several new products during the year. Thisincludes art paper for digital printing and gravure printing, art card suitable forinjection molding painting process (paint shade cards job) and new shadedevelopment (High whiteness) in printed circuit board. All the new products werewell 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 endchemical 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 powerconsumption in the existing paper machine by over 9.2 per cent per MT of paperproduced in 2010-11. Water consumption in mill has further reduced by 22.3per cent per MT of paper in 2010-11.

These efforts have been recognized at various national and international foraand 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 improvecustomer 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


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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 ensuredcompliance with CREP norms and achieved all the norms of treated effluent andboiler stacks emissions, well below the norms laid down by Haryana StatePollution Control Board. Overall water consumption in the mills reduced by 12.7per cent per MT of paper produced, while effluent discharge decreased by 6.3percent 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 newrain water harvesting pits.

On energy consumption, the Unit achieved major reduction in powerconsumption for manufacture of paper. This was achieved by taking measures suchas replacing inefficient motors with energy efficient motors, installing VariableFrequency Drives, Screw compressor at Pasaban sheeter and shutting down of fourwater 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 in2010-11, 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 ShreegopalP.O. Yamunanagar, Distt. Yamunanagar,Haryana-135 001Tel: 01732-251603/ 611


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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 newproduct development and to improve Customer Servicing and Satisfaction. Someof 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 andboiler 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 anddoubled 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 stagefor pH control, which resulted in improvement of effluent quality

As a green initiative, constructed five rain water collection pits for rain waterharvesting.


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Address:Unit SewaGaganapur, P.O. Jeypore,

Distt. Koratpur,Orrisa-746 002Tel: 06854-230222Fax: 06854-232931

Unit: Ashti (Maharashtra) In 2010-11, the Unit produced 53,299 MT of paper, which was 1,691 MT lowerthan 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 CalciumCarbonate (PCC) as filler, which has helped in improving product quality as wellas cost reduction. Further, the Unit has replaced the primary centri-cleaner pump toa higher capacity one for improving the centri-cleaning efficiency, which resultedin the improvement of product quality. This combined with other qualityimprovement initiatives have resulted in substantial reduction of customercomplaints by 65 per cent in 2010-11.

In the area of environment protection, the Unit has successfully carried outretrofitting and up-gradation of Electrostatic Precipitator (ESP) to achievesuspended particulate matter at 50 mg/NM3, which is much below the statutorynorms. The Unit has also been able to reduce water consumption by 16 percent perMT of paper produced during the year by improving the vacuum flume recyclingsystem and reuse of water in the process which has finally reduced the effluentwater of the mill by 20 per cent per day thereby improving the ETP dischargeeffluent 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 tothe Units improvement in product quality is the success achieved in exportingpaper to 20 countries across the globe, where the products are competing withinternational brands and meet high quality norms.


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In addition to the existing A-4 packing line, a second A-4 line has also beenshifted from Unit Sewa and re-commissioned at this Unit, enabling it to increasethe volume of inside cutting and packing of A-4 Copy paper to 43,242 MT in2010-11, which is 6,088 MT higher than the previous year.

As part of management commitment towards systems implementation, in2010-11, the Unit obtained recertification of QMS ISO 9001:2008, EMS ISO14001:2004 and ISO 18001:2007 certification of OHSAS. The Unit is also ForestStewardship Council FSCCOC certified.

Address:Unit AshtiP.O. Ashti, Vill. Ullur, Distt. Gadchiroli,

Maharashtra-442 707Tel: 07135-244128Fax: 07172-240548

Unit: SFIDuring 2010-11, paper production from the Unit was 131,909 MTPA, which isabout 12 per cent lower than 2009-10. Lower paper production was mainly due toan annual shut-down in September and October, 2010. The annual shut-down isnormally once in 18 months for inspection and servicing of pressure vessels as perthe requirements of Department of Safety and Health (DOSH), Malaysia. Therewas an overrun of 9 days in this annual shut-down, mainly due to delay inimplementation of DCS system on paper machines. The other factor which led tolower production was the start up and commissioning of the new MCO2 plant inPulp 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 increaseconsumption of Acacia Mangium against Mixed Tropical Hardwood to improvepaper formation and reduce production cost. SFI paper grades have moved up inpositioning in terms of quality amongst its regional competitors. Another notableparallel 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 2009 10. This is


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mainly due to proactive steps taken in maintaining quality during production andtight Quality Control Systems across processes.

As regards plantation activities, the major change from past practices hasbeen to directly employ labour rather than relying entirely on contractors. By the

end of 2010-11, more than 200 Indonesian nationals were employed on landpreparation and planting activities. This was necessary as contractors were unableto meet the plantation targets. The plan is to increase the numbers of such workersto more than 500 in 2011-12. Consequently, plantation coverage increased from2,200 hectares (ha) in 2009-10 to 4,100 ha in 2010-11 with more than 800 haplanted in the month of June 2011.

SFI was awarded a Compliance Certificate by the Sabah ForestryDepartment for CY 2010 and maintained its SmartWood Verified Legal Origin

(VLO) certification for its established plantation and its Natural ForestManagement (NFM) areas and its Forest Stewardship Council (FSC) ControlledWood certification for its NFM area.

The Pulp Mill upgradation project is in an advanced stage of erection andcommissioning. New Wood Handling line and Oxygen Delignification plant havealready been taken in line and the complete Pulp Mill is likely to come on streamby October 2011.

-


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3.3) ORGANIZATION STRUCTURE OF BGPPL

UNIT HEAD (CGM)

Head-R & D

DGM Pulp Mill

GMEngineering

Head-Raw

Material

HRHead-Accounts

Head-Commercial

Manager- MSD

DGM Recovery&ChemicalComplex

Mocess

DeputyRawmaterial

1. HeadStores2. HeadPurchase 1. IR

2. Deputy

Administratio& security3. Deputy HR4. Head Medical

1. Head Machine

House2. HeadElectrical3. HeadInstrumentation4. Head PulpMill5. Head safety

GM

ocess

1. Head A/cpayable &Imports2. HeadStores Bill,Inter unitTransaction3. Head CostAccounting

Head ProductionPlanning & OrderScheduling

HeadChemical Complex

HeadRecovery

EMPLOYEE

SHIFT INCHARGES / OFFICERS

Assistant Manager

HeadWarehouseOperation

1. Head OrderManagement2. Head Chemicaldispatch & FreightPayment3. Head FactoryExcise


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Structure of MSD (Marketing Servicing Department)

ManagerMSD

ExecutiveDomestic

ExecutiveExport

ExecutiveDomestic

ExecutiveDomestic

ExecutiveDomestic

ExecutiveExport

Dy. ManagerMSD


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

1 BOOK PTG 11 MG WHITE POSTER AR GRADE 22 ESKP (SACK CRAFT PAPER) 12 MAPLITHO NSS FS GRADE 2

3 CREAM WOVE 13 MAPLITHO NSD PREMIUM4 SEMI ABSORBANT 14 AZURE LAID LEDGER5 MG WHITE POSTER TDL 15 SUNLIT BOND PREMIUM6 WHITE POSTER NS 16 SUNSHINE SUPER PTG WHITE7 MAPLITHO COPIER GRADE 17 MAPLITHO TINTED UC8 UNRULED PAPER (new shade) 18 WOOD FREE PAPER9 MG TD POSTER GRADE 2 19 WHITE POSTER ACID FREE

10 BILT MAGNA PRIENT 20 WISDOM PRIENT


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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


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3.6) PORTERS FIVE FORCES MODEL for BILT

1. Threat of New Entrants:

For BILT, the threat of new entrants is low because despite of Govt. of Indiaspersuasion by providing land for plant in low cost and various TAX exemptions itappears no business house is taking interest in establishing new papermanufacturing industry because of low availability of Raw material and highinstallation cost. Rather the existing players are either taking over some weak

SUBSTITUTES

Threat of Substitute is

LOW

SUPPLIERSPOWER

Bargaining powerof Supplier is HIGH

BUYERS POWER

Bargaining Powerof Buyer is HIGH

INDUSTRY RIVALRY

Industry Rivalry is HIGH

POTENTIAL

ENTRANTS

Threats of NewEntrance is LOW


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industries or adopting some expansion plans and adding to their productionCapacity.2) Industry Rivalry:

Though there are few players in this segment, there is existence of a strongcompetition because of fluctuation of variable costs and customers choices.

3) Suppliers Power:

The Suppliers power is very high in paper manufacturing industry because thefactors of product-ion such as Fibre and Bamboo are becoming high cost due todecrease 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 fromneighbouring countries and the companies have to provide various discounts toattract customers.

5) Threat of Substitutes:

The Threat of Substitute is very low because there is hardly any substitute forpaper. The demand will always be there for paper and paper by-products.

Transportation

When the finished product arrives in the warehouse, the shipping departmentdetermines the most efficient method to ship the products so that they are deliveredon or before the date specified by the customer. When the goods are received bythe customer, the company will send an invoice for the delivered products.


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Transportation in context with BILT Unit BALLARPUR

Transportation is an important function of Marketing. Goods must be transportedfrom 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 BILTUnit BALLARPUR all the transportation activities of raw material and finishedgoods are done by Road Transportation. The transporters those who are indulged inthese activities are either nominated by the Party itself or Selected and awarded thecontract for the specific year by the Company. The selections of Transporters arebasically done in two ways. One is Offline negotiation and other one is OnlineReverse Auction where the company finds out the various transporters providingservices for those particular areas and after doing a comparative statement they

finalize and award them the contract. And For the current year the company hasselected the transporters by online reverse auction method. The processes that thecompany 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 finishingdepartment do all the counting and primary packing of the goods throughwrappers manually. Then it comes to MSD warehouse and after doing thesecondary packing the MSD plans for the transportation by appointing thetransporters to dispatch the goods to the Customers destination.


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MSD

Manufacturing Dept.

FinishingDept .

MSDWarehouse

Customer

RespectiveZones

N/E/W/S


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DISTRIBUTION CHANNEL OF BILT

Wholesaler Retailer

CustomerProduction

Jobber

Deport

Distributor

RetailerDeport

Retailer


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Scope and Objective of the study

Scope:

1)The project will act as a broad straightforward guide to the management forfurther expansion and improvement of distribution channel.

2) The study will encourage the marketing official and the dealers to takesufficient 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 supplyof paper.

3)To study will help to improve the sales volume of the BGPPL.


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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 inqu iry 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


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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


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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 .


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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


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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 cons ider 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 non-

probability 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


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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


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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


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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


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Here in this research, the secondary data that has being collected is mainly from the

past records available with internet.


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DATA ANALYSIS

1) Does MSD (Marketind service Department) play a major role in marketing ?a)Yes b)No

Interpretation:

It was found that the MSD play the major role in marketing .This shows that MSD is the key

factor for sale.

82%

18%

Marketingyes No


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

a) Yes b) No

Interpretation:

It was found that R & D play a major role in inspection.This shows that without

R&D export did not take place.

90%

10%

R & DYes No


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3)For export which type of vehicle is used for loading ?

a) Container b) Truck c)Railway

Interpretation:

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

90%

10%

0%

VehicleContainer Truck Railway


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4)For identification of material in warehouse does cherkers are must ?

a)Yes b) No

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

80%

20%

CheckersYes No


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5) Is safety instrument like helmet, handglows, shoes are necessary ?

a) Yes b) No

Interpretation:

The analysis shows that safety is needed compulsory in warehouse. This shows that withoutsafety employ dont want work in warehouse so safety is first preference of employ.

98%

2%

SafetyYes No


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70

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

Interpretation:

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

83%

12%5%

0%

Loading days1-2 days 3 days 4 days above 4 days


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7) Mention the equipment for loading the vehicle ?

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

Interpretation:

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

60%

40%

0%

Loading vehicleForeclift By hand Other machinery


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8) Which are the best selling products ?

a)

Wisdom print b) Bilt Magna print

Interpretation:

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

56%

44%

productswisdom print magna print


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9) Which of the following factor influences the customers buying attitude most ?

a) Quality b) Price c) Brad name d) Any other

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

20%

50%

20%

10%

FactorsQuality Price Brand name Any other


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10) How do you compare your products performance with other leading products ?

a) Excellent b) Good c) Average d) Poor

Interpretation:

The analysis shows that BGPPL product is more preferable than any other product inmarket.

70%

22%

8%

0%

PerformanceExcellent Good Average Poor


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11) Does the customer are satisfied with your service ?

a)

Yes b) No

Interpretation:

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

79%

21%

ServiceYes No


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

a)

Yes b) No

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 theservice.

80%

20%

serviceYes No


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77

13) Does the inventory is properly maintain in MSD ?

a) Yes b) No

Interpretation:

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

80%

20%

InventoryYes No


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14) Mention the storage condition of MSD warehouse ?

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

Interpretation:

It was founded that MSD maintain very good storage condition of warehouse to store thefinished product..

70%

20%

8%

2%

storageverygoog Good Average Poor


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79

15) Which form of paper did you export ?

a) Real b) Bundle c) Pallet d) Loose Ream

Interpretation:

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

18%0%

82%

0%

ExportReal Bundle Pallet Loose Ream


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16) Mention the mode of transportation for export ?

a)

Sea b) Airway c) Roadway

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.

98%

2%0%

Routsea Airway Roadway


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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.


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RECOMMENDATION

The industry may try to adopt a marketing orientation to find out new customerslike educational institution and government sectors if applicable, rather thandepending much on the demand from the existing customers only.

The industry as a whole can go for different incentives and discount plans to meetthe customers choice and competitor price in the market.

To increase the demand for the existing product it must go for properadvertisements and awareness programmes to create brand awareness.

The order management and scheduling process should make preplanning of date onwhich the product of customer will be ready so that the transporters can beintimated 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 othercompanies 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 foranother most important factor should be taken into considered. Though BGPPLprovide fairly rated freight charges more than others in the market. It lags behind interms 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 priceleader in market.


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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.

Most of the caterers did not allow telling the competitors details3.


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BIBLIOGRAPHY

Books:

Magazines: BILT magazine

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

namit project on distribution

Documents