>The Tinplate Company of India Ltd. (BAJAJ CAPITAL)

The Tinplate Company of India is based in Jamshedpur in the state of Jharkhand. The Company is essentially a producer of a single product i.e. tinplate. The tinplate consumption in India is presently ~ 400,000 tonnes per annum and imports account for more than 50% of the market share in India.

Tinplate is a coating of tin on either side of a steel sheet that is mainly used as a packaging material in the form of cans. The coating of tin is done as it is malleable, non-corrosive, non-toxic and it gives the can their slick texture. These cans can be used for storing processed food, beverages, beer, paint, lubricants etc.

Although main consumers have been the developed nations of Europe, USA & Japan consuming more than 70% of world tinplate, of late increasing production / consumption is noticeable in developing economies. With Asia becoming the driver for growth, new capacities are coming up in emerging economies like China, India and Thailand. Major producers of Europe, USA & Australia have initiated shift of manufacturing facilities to cost advantageous regions.

KEY INVESTMENT ARGUMENTS
■ India’s fast growing economy to boost tinplate sales
It is an established phenomenon world -wide that packaging industry growth is dependent on the rate of economic growth of a region / country. The growth at relatively higher rates in emerging economies of BRIC and Asia as compared to developed economies like USA, Europe & Japan will ensure that these markets including India will be the prime driver of growth.
Consumption of tinplate in India at approx 0.30-0.40 kg /capita is much lower compared to 8 to 12kg/capita in many developed nations. Even a similar developing economy like China, consumes 1kg / capita. With expectation of economic growth, it is estimated that the packaging industry in India is also poised for growth and hence the tinplate demand will also grow.

■ The company is the market leader in Industry
The company is the largest tinplate producer in South East and South West Asia. Without saying, it is the largest player in India with a 35% to 40% share of the total domestic consumption.50% of the demand in the country is met through imports while the balance 10-15% is in the unorganized sector. The company is aiming for full backward integration with the second cold rolling mill (CRM) under implementation to ensure self sufficiency of raw material for the tinning line.

■ Growth of organized retail in India
The growth of the organized retail sector in India would be a big boost for the growth of the tinplate Industry as this sector encourages consumers to buy more canned products.

■Most Eco Friendly packaging medium
The world is today grappling with environment concerns and packaging waste is a cause of concern. Tinplate is the most eco friendly packaging medium. This would give it an edge over other substitutes.

■ Excellent pedigree and related advantages
In 1982, Tata Steel bought the shareholding of Burmah Oil, the then major shareholder and took over the management of The Tinplate Company of India. The company has recently started collaborating with Corus, one of the world leaders in tinplate business and a subsidiary of Tata Steel. The company will be in a position to leverage the excellent R&D and engineering capabilities at Corus.

To read the full report: TINPLATE COMPANY