Business plan:

Executive summary:

Indian stationary sector is one of the rapidly growing sectors of the Indian economy as there is
rapid rise in per capita expenditure on the education. Government is also generously spending on
the education sector leading to the rapid growth of stationary business in India. According to one
research report up to 2012 this sector is poised to grow at the rapid rate of 32%.

Except 2-3 major players namely ITC, NAVNEET, and SunDaram this sector is left totally to the
unorganized sector. Most of the demand of the local market is being served by the local player.
There is not a single player who can claim that he is leader in the stationary sector. Some player
has advantageous position the production of notebook while some has advantage in writing
equipments.

Thinking on these points, our plan is to establish a stationary manufacturing plant in Dandeli,
Karnataka on the banks of river Kali. We are planning to produce different range of stationary
range like notebooks, exercise book, autograph books, Note pad, folders, stick files, engineering
equipments, and Xerox sheet.

Total cost of the production as per the assumption made will be to the tune of 2.75 crore and
company will achieve break even between 2nd and 3rd year of operation.

Looking into the fact shown above it can safely be concluded that it is profitable to foray into the
stationary sector.
Introduction

Indian Stationery Industry is a much unorganized group of business usually associated with the
Schools, Collages, and Office and plays a very crucial role in working of any organization across
the globe. It includes Paper stationery which comprises of a vast collection of products like
exercise books, note books, stitch, glued & tape pads, refill pads, flap over pads, subject books,
plastic cover books etc. The huge greeting card market, autograph books, party invites etc, is also
a part of this segment. India is the 15th largest producer of paper and it is poised for the annual
growth rate of 2% but according to the Net scribes' report Indian stationery market poised to
grow at 30% annually till 2012.Inspite of having huge young, school going population, India
consumes only about 0.6 % of total paper production and also per capita consumption of paper
and stationary items is only 8.6 kg per annum while small country with low population size like

Finland consumed around which 429 kilogram’s in 2000. So there is huge potential of growth in
the Indian stationary market.

Current Scenario in Indian stationary industry:

Indian Paper Stationery Industry, which is a part of the huge and scattered Indian stationery
Industry, has been going through tremendous alteration in recent years. Despite growing
competition from neighboring markets, Indian stationary industry has able to firm its feet into
the market with constant innovation and making it more and more customer centric.. Indian
companies have learnt that innovation, performance and versatility are the key area to be focused
upon. Taking the points under consideration, the businessmen are now researching and
developing new products, as the market is now more of consumer oriented which is always
looking for cost effective prices.
Another noteworthy thing about Indian stationary industry ids that its leaving aside few
organised and big player like Camlin, fabre Castle, ITC majority of the market is being catered
by unorganized local player which operates only in local market.They give stiff competition to
major player and eats their share. Among all type of stationary items Office stationary is growing
at the maximum rate.
Drivers of growth in Stationary market:
• Economic Growth
• Higher literacy rate
• More government spending on education
• Population growth
• Changing demographics
– Urbanization
– Higher proportion of young adults
• Better living standards
• Government regulations and taxes
• Shift in focus from inexpensive to quality products

Facts about Indian stationary market:( Source: Business line July 31, 2008)
Indian stationary market size : Rs 9000 crore
Notebook ( paper) market size : Rs 3000 crore
Pencil Market size in India : Rs 400 crore

Major Player of the Indian market:

There is not a single major player who does business in all the segment of the stationary. Some
dominates the note book segment while some dominates writing equipment. Following are the
market leader in their respective segment:
Notebook Writing equipment Other stationary
ITC( classmate) Cello Kores
Navneet Reynolds Cannon
Sundaram Montex Camlin
Fabre Castle
Camlin
ITC enjoys 16 % market share in the notebook segment while cello enjoys 68% in the writing
equipment material and in other stationary like Carbon papers, staples Kores is the market leader.

According to CLSA Asia-market report each K-12 student enrolled in a private school consumes
each year Rs400 worth of notebooks, pens, pencils, and other stationery items, and this is just
Rs70 a year for public school children. With 90m children in private and 129m in public schools,
this market is worth about US$1.3bn. We have added 10m post-secondary students, each of
whom consumes arguably larger amounts of stationery.

Education stationery - Market size estimates

Private Public Colleges Total
Students enrolled 10 229
90 129
Number of notebooks per year 20 5 30 55

Cost per notebook (Rs) 15 10 25 50

Total spend on notebooks (Rsm 27,000 6450 6000 39,450

Stationery spend, yearly (Rs) 100 20 200

Total spend on stationer (Rsm) 9,000 2580 2000 13,580

Total market (Rsm) 36,000 9030 8000 53,030

Total market (US$) 900 226 200 1326

Spending per student (Rs) 400 70 800 232

 SWOT Analysis

STRENGTH:

1. Huge market size

2. Technical expertise of group
3. Untouched stationary market
4. Single large firm which is fulfilling all the need of stationary market.
5. Established name in the field of education.

WEAKNESS

1. It will take some time to position the product.

2. Establishment of distribution channel.

OPPOURTINITY

1. Venture into Office stationary, office furniture

2. Diversify into Pen business both catering to luxury segment and mass market.

THREAT

1. Competition from low priced Chinese product

2. Infrastructure related problem like Poor power supply.

Business plan

Following raw materials used in papermaking will be described

 Fibres
 Water
 Fillers
 Retention aids
 Dyes
 Fluorescent whitening agents (FWA)
 Sizing agent
 Starch
 Wet strength agent

Fibres:
Hardwood and softwood can both be used to for paper Typical hardwood used in the paper
industry comes from:

 aspen/populus
 birch
 beech
 eucalypt
Typical softwood:

 spruce
 pine
 fir
 larch
Fibers from tropical hardwood trees are not as suitable for production of paper. This is contrary
to what people think.

Location of the plant:

Plant will be located in the Dandeli, Karnataka on the bank of river Kali.

Reason for selecting the location:

1. Situated amidst thick forest which will insure continuous supply of raw material( wood)
2. River Kali will be the source of water.
3. Well connected through roads and rail network.
4. Assured power supply.
5. Presence of semi and unskilled labour.

Product range with capacity

Notebook:

Product category Production capacity( Proposed)

50 pages 1,50,000

70 pages 1,50,000

92 pages 1,50,000

192 pages 1,50,000

Exercise book:

Product category Production capacity

100 pages 1,50,000

200 pages 1,50,000

Note pad/ stick Pad/ Folders

Product category Production capacity

Note pad/ stick Pad/ Folders 1,00,000

Lead pencil

Product category Production capacity

Lead pencil 1,50,000

Clutch pencils 1,00,000

Business paper/ Xerox sheet

Product category Production capacity

75 GSM 10,000

70 GSM 10,000

Engineering Equipment:

Product category Production capacity

Drafter 2,00,000

T-scale 2,00,000

Angles 2,00,000

Financials:

1. Land requirement: 6 acre

Average land price: 6 lakh/acre

Total expenditure on land: 36 lakh

Machinery and Equipment:

Description Qty Rate Amount

Disk rulling machine - 36" with 5 22000 1,10,000

motor

Paper cutting machine - 32" with 5 32,000 1,60,000

motor

Stitching machine with motor 0.5 5 15,000 75,000

HP

Perforating machine - manual 18" 5 3000 15,000

Press - manual - 15 x 20" 3 3500 10,500

Furniture’s and fixtures ---------- ---------------- 10,000

Installation and electrification ----------- ------------- 6,000

Miscellaneous expenses -------------- ----------------- 5000

-

Automatic Grooving Machine(Pencil) 5 30,000 1,50,000

Automatic Single Spindle Double 5 30,000 1,50,000

Shaping Machine

Computers 5 25000 1,25,000

Total 6.92 lakh

Working capital:

A. Salary and wages:

S. No Description Nos Salary

1 Manager 4 3,00,000*4=12,00,000
2. Skilled labor 18 1,50,000*18=27,00,000
3. Semiskilled labor 25 120000*25=30,00,000
4. Unskilled labor 32 72000*32=23,04,000
Total 92.04 lakh

Raw material:

Paper Pulp 25
Graphite 10
Dyes, Printing ink, binding cloth thread 2
Glass material (Engg. Equipment 4
Fibre body for pencils 5
Total 46

Utilities:

Utilities(Annual) Monthly No.of operation

Power 30000 12 360000
water 25000 12 300000
Total 6.6
 Other expenses:

Other expenses
Postage, Telephones & Stationery Expenses 0.75
Transportation & Conveyance Expenses 5
Advertisement Expenses 1.5
Repairs and Maintenance Expenses 1
Miscellaneous Expenses 0.5
Total 8.75

Total cost of production ( In first year) ( in lakh)

S. No Cost head Amount

1. Land 36
2. Plant and machinery 6.92
3. Salary/wages 92.04
4 Raw material 46
5 Utilities 6.6
6. Other expenses 8.75
Total 235.81

Profitability projection for the next 3 year

Sales YEAR 1 YEAR 2 YEAR 3

Sales Realization 249.88 299.85 429.59

Cost of manufacturing 149.91 149.91 189.76

Raw material 46 46 46

Utilities 6.6 6.6 6.6

Salary/wages 92.04 92.04 92.04

Repair/maintance 1 1 1

Selling and Distribution cost 1.5 1.5 1.5

Interest 27.05 27.05 27.05

Depreciation 6.47 12.95
Gross profit -80.694 -37.19 46.20
-
Loss carried forward 71.69
Income tax 0.00
Net profit -80.69 -37.193 46.20

First two year of operation in the business will give loss to the organization but from the third
year, it will start earning the profit to the tune of 46.20 lakh.

MARKETING STRATEGY:

a) Paper advertisements
b) Books exhibitions
c) Public relations with educational institutions
d) Direct marketing
e) Multi specialty retail chains( Big Bazaar)
Conclusion:
With above business plan it is very clear that there is much scope of development in the field of
stationary in India. With the increasing level of education and growing of service sector like
education and hospitality sector in the India there is every chance that in near future also there
will be continuous growth of stationary sector in India.
Stationary sector is still untouched by the corporate as there is not much player in market. Most
of the demand is being served by the local player who doesn’t have much technical expertise in
the production of stationary. There cost of production is very high because of usage of obsolete
technology and thus profit margin is very low.
So it is very profitable to venture into this business as there is huge demand supply gap till now,
market is fragmentd and huge growth potential above.