B&B Triplewall Containers Ltd Management Discussions.

Overview

B&B is one of the largest manufacturers of corrugated boxes and board. The packaging industry plays a crucial role, adding value to various manufacturing sectors including agriculture, pharma, retail, FMCG, to name a few. Basically, the market has been growing due to solid demand from food and pharma industries. The paper packaging market contributes more than 30% to overall packaging market share and dominates other packaging domains.

The market size of the countrys packaging industry is expected to touch USD 72.6 billion by Financial year 2020 on account of rising population and income levels, according to a study by Assocham-EY. "Indias packaging industry is expected to witness an outstanding growth during 2016-21, and anticipated to reach USD 72.6 billion by Financial Year 2020.

Our vision is to be "20-by-27", that is to convert 20,000 metric tons of paper per month by the year 2027. Our mission is to be the most recognized brand amongst the consumers of corrugated boxes in India.

1. Industry Structure and developments

India is an emerging economy and thus Fast-moving consumer goods is one of the primary growing segments in the retail sector and is also one of the biggest end users of the packaging industry, and pharmaceutical is yet another major user of the packaging industry.

India is the fastest growing market for the e-commerce sector and boom in e-commerce and organized retail will enhance the growth of packaging and per-capita consumption in the years to come.

We are the only company in India to have an installed capacity of 5000 tonnes/month, within a single facility, and a combined installed capacity of 7000 tonnes/month from both our facilities. The latest technology employed in manufacturing the corrugated boxes is a pointer to the high professionalism.

The manufacturing facilities are fully automated and the entire manufacturing process is managed through fully automatic machines including corrugation machine, printing, converting machines. The company has setup a neat and clean structure, invested heavily in technology and modern facility which will make it attractive to MNCs to collaborate for their India footprints. This will help the company attract investment and thus make its growth plans a reality. Companys qualitative approach has helped Company to obtain status of recognized vendors with large corporate houses and MNCs.

2. Opportunities and Threats

High level of customer satisfaction the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers. Automation of activities brought consistency of quality and has enabled the company to scale up and scale down based on the demand conditions in the market. Successful track record of developing new products product innovation. B&B has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks. Over the years B&B has built a reliable distribution network that can reach majority of its potential market. B&B is successful in installing the board line BHS (Germany), flexo folder & gluer BOBST from France.

We are easily replaceable as a supplier of a generic product, but to counter this we have setup a technically advanced facility and we provide unparalleled service to the satisfaction of the dynamic requirements of the customers.

3. Segment wise or product-wise performance

The sale from corrugated boxes and board in the Fiscal year 2019 is amounting to Rs. 1,93,70,78,827.00. The Company trades in a single business segment, so segment wise or product wise details is not applicable.

4. Outlook

The paper packaging products are an important part of the overall packaging industry in India. The packaging industry plays a crucial role, adding value to various manufacturing sectors including agriculture, pharma, retail, FMCG, to name a few. Basically, the market has been growing due to solid demand from food and pharma industries. The paper packaging market contributes more than 30% to overall packaging market share and dominates other packaging domains. The demand for packaging has been continuously increasing on account of rising disposable income, single living, on the go lifestyle and convenient packaging. Moreover, the explosive growth in ecommerce over the past few years, mainly due to faster delivery, free shipping and increasing internet penetration, is the major factor fueling the overall growth of the paper & board packaging market. Furthermore, the recyclability proposition of paper as well as growing environmental consciousness among consumers towards sustainable packaging is drawing heightened industry attention to entice customers. The growth in lifestyle and consumption patterns has increased the demand for the packaged products resulting in growth packaging industry.

5. Risks and concerns

In todays more challenging business environment companies operating in a global market are faced by uncountable numbers of risks. An increase in the prices of our basic raw material i.e. Kraft Paper & Glue could raise our manufacturing costs and could adversely affect our profitability is one of the major risks in industry. Any significant decline in the demand for our products, introduction of alternative technology or consumer habits or slowdown of the industry in which we operate may adversely affect our profitability and business prospects. We generate our major portion of sales from our operations in certain geographical regions especially Karnataka & Tamil Nadu. Any adverse developments affecting our operations in these regions could have an adverse impact on our revenue and results of operations. Our Company is mainly engaged in manufacturing of corrugated Board and boxes form corrugated paper sheets which are highly flammable. This may result to catch fire very quickly as compare to other flammable product, which may adversely affect our business. Although the Company has taken the necessary precaution as required for Fire Safety as per the Fire Service License under Section 13 of Tamil Nadu & Rescue Service Act, 1985 and adequate insurance has been taken. Change in the government policies can pose a challenge for the company.

6. Internal control systems and their adequacy

The Company has proper and adequate internal control system commensurate with the size of the business operations geared towards achieving efficiency in its various business operations, safeguarding assets, optimum utilization of resources and compliance with statutory regulations. Efforts for continued improvement of internal control system are being consistently made in this regard. The Company has put in place proper controls, which are reviewed at regular intervals to ensure that transactions are properly authorised, correctly reported and assets are safeguarded. Internal control system ensures reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations. The Companys internal controls are supplemented by an extensive Programme of internal audits, review by management and documented policies, guidelines and procedures.

7. Discussion on financial performance with respect to operational performance

Overall performance of the company in fiscal year 2019 is good and is showing a continuous growth. The Total turnover of the company is increased from Rs. 1,58,89,36,344 to Rs. 1,93,70,78,827 in the year fiscal 2019. The profitability of the company is also increased. The Company foresees increased turnover with increased profitability & earning per share in the years to come.

8. Material developments in Human Resources / Industrial Relations front, including number of people employed

The Company strongly believes that Human Resource is the most important assets of an organization. In line with this belief:

• To create a friendly, dynamic work environment under a team concept while maintaining professionalism.

• To recruit and retain best people, develop their skills, cultivate new leaders & capitalise on their collective intelligence by applying human insights to transform the organization.

• Provide an enjoyable and rewarding environment for all individuals to learn, grow and develop to their fullest potential.

• To develop all professionals to their fullest potential through the following:

• Progressive Experience and Responsibilities Based on Ability

• Performance Review Process

• Encourage our staff to be involved in and contribute to the community and to professional activities and organizations.

• Provide a competitive environment, products and services to attract and retain a diverse, high caliber staff.

• Support leadership efforts with a strategic workforce plan that creates a climate of innovation and excellence

• Create strategic processes that support organizational goals with innovation

We have built a robust leadership bench not only at the senior management level but also for all critical positions up to the middle management level and frontline roles in sales, service & operations. The Company has put in place several initiatives that focus on leadership and talent development across grades.

The total permanent staff strength of the Company as on March 31, 2019 was 279.

The Company does not engage in any form of child labour/forced labour/involuntary labour and does not adopt any discriminatory employment practices.

Date: 03.09.2019 For and on behalf of the Board
Place: Bangalore B&B Triplewall Containers Limited
(Formerly Known as B&B Triplewall Containers Private Limited AND MNM Triplewall Containers Private Limited)
Manish Kumar Gupta Ravi Agarwal
Managing Director Director cum CFO
(DIN: 03568502) (00636684)