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R Balaji

Chennai, Nov. 28

Why do paper manufacturers get excited when IT companies start recruiting?

Simple, says a leading manufacturer, for every candidate an IT company takes on, paper manufacturers sell over five reams, about 2,500 sheets, of copier paper directly related to the recruitment process in the form of letters, instructions and training manuals.

Naturally, they are also happy when HP announces a growth in printer sales. HP sells over 70,000 machines a month and the numbers are growing, says a paper marketing executive. Also, there are over 1.6 lakh printing units and the industry is growing at about 12.5 per cent CAGR.

While paper manufacturers are seeing a drop in prices and sales across various segments in the backdrop of the global slowdown, copier paper segment alone offers reason for them to be happy. The domestic market for copier paper is estimated at about 4 lakh tonnes a year and is growing in double digits after a lull in the last few months.

Stiff competition

But this segment too is not without its concerns; just about every manufacturer has entered the segment and there is stiff competition. At about Rs 50,000 a tonne, prices are about Rs 2,500 lower than they were a year back.

But the tide is turning and the New Year is bound to see a brisk revival in sales, say most leading manufacturers. Various sectors including telecom, automobile, construction and IT are beginning to report growth. Whether it is the mobile bill, e-ticket, or photocopies of a house documents they are all on the ubiquitous copier paper. All the manufacturers are gearing up to fill the market shelves.

According to industry sources, JK Paper, the market leader in copier paper, sells about 10,000 tonnes a month and has devoted its entire paper production to copier paper. In addition, it is also importing about 800-900 tonnes of copier paper a month from Brazil under its own brand ‘Sparkle.' This is to expand the footprint of its brand in the domestic market and “augment the volume for tomorrow,” said an industry representative.

The others at the top are BILT, which sells about 3,000 tonnes a month, and TNPL, which is ‘somewhere in between,' according to market sources. Among the large players, ITC has also entered the fray and is positioning its brand, ‘Paperkraft', in the premium segment and ‘green platform.' Apart from the A-grade mills, others including recycled paper manufacturers are also entering the copier paper segment.

Global events

A representative from a leading brand said that apart from the revival in the manufacturing sector, the paper industry sees support from the Commonwealth Games in Delhi next year and five major international events in China including the Shanghai 2010 international expo and the Asian Games. That will involve a lot of communication, bookings, tickets, hotel reservations… and hard copy of everything. “Overall the Asia market will be stable,” the representative said.

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