The Hindu Business Line : On a soft roll…

It is the tissue which is making an issue. The market for this seemingly innocuous product is growing in India and soon it will pervade every sphere of life from burger wrappers to baby wipes. As consumerism rears its head and urbanisation spreads its wings, the tissue will make its presence felt more stubbornly and unwittingly.

According to estimated figures, the market for disposable paper products including tissues, toilet rolls, facial tissue, incontinence products, household care wipes and feminine hygiene wipes is on the upswing. The market for these products have shown a remarkable increase over the last decade or so among urban consumers. Apart from market leaders like Kimberly-Clark Lever, a slew of Indian companies are also making their presence felt in the organised segment. The mall culture and emergence of super-markets too have increased consumer interest in this category. The Indian disposable paper products market grew by almost 11 per cent in value terms in 2004, with sales amounting to just under Rs 710 crore, according to research reports. The retail sales of disposable paper products has increased from a mere 3 per cent in 2002 to a whopping 85 per cent. According to Mr Manoj Pachisia, Chairman and Managing Director of Origami International, “The category hitherto had not generated much enthusiasm. But of late, we see an annualised growth of over 60 per cent,” he said. The company, which has been in the business since 1995, said it is aggressively spending on branding and promotion. “We spend at least 3 per cent of our turnover on marketing activities.” Marketed under the So-soft and Origami brands, the company manufacturers a range of tissues for both homes and institutions.

Another early-mover in the organised segment is the S.R. Group. What started as a small-time unit in 1977 to cater to the needs of major five-star hotel chain has grown both in strength and size. “The use of tissue saw an increase after the 1982 Asian Games. The category has been growing consistently. If the present demand continues, then soon we will see an imbalance in the demand supply ratio,” says Rakeshh Gupta, Managing Director, S.R. Group said. The company has set up its own manufacturing facility to cater to the domestic market. “Earlier, we used to import jumbo-sized rolls and just cut and pack it. However, the buoyancy in the sector has made it mandatory for us to set our own facility,”, he said adding that the plant (with a capacity of 600 tonnes per month) has been established with an investment of Rs 25 crore. The ISO certified group sells its product under the Mistique brand name. While institutional sales contribute to as much as 40 per cent of the total sales, the retail market too adds up to 40 per cent, with export accounting for 10 per cent. The Rs 66-crore company is looking to end the fiscal with a turnover of around Rs 100 crore. Gupta says the company is actively into private labelling for mega retail giants. G.G. Shenoy of Premier Tissues, which has been in the business since 1998, says, “Tissue is the younger brother of paper. It has gained prominence after Indians started paying a premium on hygiene.”

Take a look at the statistics by the Tissue World Station, an industry body with extensive focus on tissues and wipes. The per capita consumption is at about 50,000 tonnes annually in India. Compared to the consumption in many western countries, India is notches below. “In the US, the per capita consumption per annum is 7 kg, in Japan it is 4 kg, China is 2 kg. In India, it is a mere 7 grams,” said Gupta. Besides awareness, the biggest challenge faced by manufacturers is in lowering the production cost and increasing the volume. On the use of technology, Gupta said organised players are investing heavily in it.

“Since it’s an FMCG product, standards of hygiene need to maintained. Minimal human intervention is needed and the products need to prescribe to a certain quality standards,” he said adding that the group has added capacity to meet the demand. “We will take our current capacity of 24 tonnes a day to 100 tonnes by 2010,” he says. He says big players like BILT and ITC are also evincing interest in the segment considering the huge potential it has in the domestic market. While issues such as logistics and inputs costs are big worries, the industry is also diversifying and growing, besides challenging the unorganised sector.

More Stories on : Brands | Personal Products | Paper | rd & Newsprint

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
The fizz is back

The business of creativity

‘Small retailers will benefit from our supply chain model’

Opinion leaders as thought leaders

On a soft roll…

An insider’s view of Indian advertising

The best salespeople are invisible