The school paper stationery market in India is about Rs. 9,000/- crore annually and little over 95% of the manufacturing is within the unorganized sector, which is the main reason for the region-wise fragmentation of the market. This is to say that there are hardly any nationally available branded paper stationery products, though the branded products do exist but they are well known in their regions only. The office paper stationery market is estimated to be around Rs. 5,000/- crore annually and about 90% of this is within the unorganized sector.

The school and office paper stationery markets are growing at 15% p.a. and it is estimated to grow even higher on account of the consolidation process that has begun within the industry as a whole. 

Sundaram markets its products in Maharashtra, Gujarat and Goa and presently commands 15% of the market share among the organised sector players and by 2010-11 would grow to command 25% of the market share of these regions. The Company has undertaken the massive expansion plans of doubling its manufacturing capacities from 60 tons per day to 120 tons per day by 2010-11 and to expand its existing dealer/retailer network from 20,000 to 40,000 in Maharashtra, from 1,000 to 12,000 in Gujarat and to establish the said network in the States of Madhya Pradesh and Chhattisgarh in next two years.

Maharashtra, India

The paper stationery business relates directly to the rate of literacy, which is currently about 61% in India. This means that there is lot to achieve in this regard. Since independence, education has been visualized in the government policies as precursor to national development as well as to better quality of life. In the education policy of 1968 it was envisaged that public expenditure on education as a proportion of GDP should touch 6%. However, it has not gone beyond 3.9% till date. The 11th FYP stresses the urgency on this front because the 86th Amendment to the Indian Constitution made free and compulsory education, a fundamental right for all children in the age group of 6-14 years.

In the present era of globalization, liberalization and privatization, education is viewed not only as an input to empowerment and social justice, but also as being basic to the very survival of individuals and nations. This is where the Sharva Siksha Abhiyan {SSA} as an important objective of National Education Policy {NEP} has addressed the need of providing elementary education and the surveys show that 90% of rural population was served by primary schools in 2002-03. Quality of education in terms of better educational attainment levels is a thrust area for the next phase of SSA in the 11th FYP.

All this augurs well for the Company’s business and its growth potential. Emphasis on education brings with it the increasing need for producing and supplying various learning materials and paper stationery products.

There are more than 600 pulp & paper mills in India, the total annual turnover is around Rs. 15,000/- crore and between 2003-04 and 2007-08 this industry grew at a CAGR of 9% and is estimated to grow at 8% over next five years. The average global per capita consumption of paper is 52 klgs; while the Indian average is 6 klgs. The continued economic reforms and emphasis on eradication of illiteracy will fuel the growth in consumption of paper.

The Company presently produces 30 tons of paper per day and expects to double this capacity in one year.