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ITC to grow office stationery business on green plank

Source : BUSINESS LINE
Last Updated: Fri, Aug 07, 2009 04:49 hrs

Chennai: Powered by its "green credentials" and a 750-strong distributor network, the Education and Stationery Products business of ITC Ltd, among the fastest growing of ITC's various business divisions, is hopeful of growing its office stationery business on the eco-friendly plank.

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This division of ITC, which has the capability of developing products all the way up the value chain - from saplings to notebooks as its CEO Chand Das is wont to say - had entered the office supplies segment earlier this year with the launch of its 'Paperkraft' premium business paper of varied grammage and pack sizes. The "environmentally friendly multi-purpose paper" is for print-copy-fax-scan applications.

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According to Das, this multi-purpose offering from ITC has jumped into a Rs 1,500-crore market dominated by JK Paper, BILT and TNPL, which together hold a 70 per cent share. Das says ITC's offering is different: it's a physical manifestation of the company's sustainability programme and leverages the 'ozone-treated elemental chlorine free' bleaching technology which it introduced for the first time in the country at its plant in Bhadrachalam. This treatment also enables the paper to have higher archival life, says Das. Traditional technology using chlorine to bleach paper is polluting.

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ITC's social forestry model and adoption of green technologies has resulted in its becoming the first Indian participant of WWF's Global Forest & Trade Network which the company is touting as its unique green technology.

Das says the company is approaching the market differently and is talking to "responsible corporates" with its promise of green technology backing its paper. It is now providing the entire office stationery requirements of groups such as the Tatas, Wipro, IBM, HSBC and ICICI Prudential and is looking to step up such institutional sales. "Despite the fact that corporates are moving towards paperless offices, this segment is growing at 6-7 per cent year-on-year," said Das. It has also launched highlighters under the Paperkraft brand.

ITC's stationery division also recently expanded its education stationery product portfolio by flanking its 'Classmate' range of notebooks with geometry boxes, gel and ball-point pens and pencils – imported from China, Malaysia and Korea. On the back of its efforts to "constantly innovate and develop new products", ITC currently has close to 300 stock-keeping units in this segment.

With this new range of products, the division grew 60 per cent over the previous year, posting a turnover of Rs 250 crore in 2008-09 over the Rs 160-crore registered the previous year and expects to grow at a similar clip this year as well.

"Our plan is to have a whole range of scholastic products including crayons, colour pencils and perhaps school bags as well as we go forward," says Das.

He says that of the Rs 10,000-crore stationery products market, school notebooks alone account for Rs 4,000 crore (in terms of consumer spend).

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Manufacturers realise 60 per cent of this, which makes it an Rs 2,400-crore market. Of this, only 23 per cent is catered to by the organised, branded players.

Classmate is the country's dominant brand with an 11 per cent share of the total market followed by Navneet at 6 per cent. The Classmate brand equity has been enhanced by "contemporary cover designs" and providing trivia on topics such as global warming, climate change, national leaders, inventions and incredible India, Das adds.




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