PROJECT REPORT

ON

MOSER BAER

SUBMITTED IN PARTIAL FULFILLMENT FOR THE

AWARD OF THE

DEGREE OF BACHELOR OF BUSINESS

ADMINISTRATION 2008-11

UNDER THE GUIDANCE OF

MR.VIKAS
FACULTY, MAIMS
SUBMITTED BY:
Mr. AASHISH VERMA
ENROL.NO. (BBA (GEN) 3RD SEM-“B”)

MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT

STUDIES
Affiliated to Guru Gobind Singh Indraprastha University, Delhi
PSP Area, Plot No. 1, Sector 22, Rohini Delhi 110086

1
 STUDENT UNDERTAKING

This is to certify that I have completed the Project titled “Moser Baer – Rewriting The
Future” in “Maharaja Agrasen Institute Of Management Studies” under the guidance of
“Mr. Vikas” in partial fulfillment of the requirement for the award of degree of
Bachelor of Business Administration at Maharaja Agrasen Institute of Management
Studies, Delhi. This is an original piece of work & I have not submitted it earlier
elsewhere.

Name of the Student

Aashish Verma

Enrl.no.

2
 CERTIFICATE

This is to certify that the project titled “Moser Baer – Rewriting The Future”

Is an academic work done by “Mr. Aashish Verma” submitted in the

Partial fulfillment of the requirement for the award of the degree of Bachelor of Business
Administration from Maharaja Agrasen Institute of Management Studies, Delhi, under
my guidance & direction. To the best of my knowledge and belief the data & information
presented by her in the project has not been submitted earlier.

Name of the Faculty Guide

Mr. Vikas

3
 Acknowledgement

In the making of this project, I have received encouraging feedback and useful
suggestions from various teachers, especially our teacher co-coordinator ‘Mr. Vikas’
which I acknowledge gratefully.

But specifically, I would like to acknowledge the contribution from my guide and mentor
for this project ‘Mr. Vikas for his good suggestions and ideas in improving the project in
the best possible way.

I hope this project lives upto its purpose and use.

Thanking you

Name of the student

Mr. Aashish Verma

Enrol. No.

4
5
 TABLE OF CONTENTS

Student Declaration………………………………………………………..I

Certificate from Guide…………………………………………………….Ii

Acknowledgement…………………………………………………………Iii

Chapter-1 Introduction
1.1 Purpose of the study 7
1.2 Objective/Misson 8

Chapter 2 Research Methodology 13

Chapter 3 Company profile 17

3.1 History 18

Chapter 4 4 P’S 22

Chapter 5 MOSER BAER – SWOT ANALYSIS 50

Awards 72

Conclusions 74

Limitations 75

Bibliography 76

6
 CHAPTER 1

INTRODUCTION

7
 Purpose of Study

Moser Baer was set up in 1983 by Deepak Puri to manufacture

magnetic media products. It started with manufacturing the 8
inch floppy disc. As formats moved, the company has built
across formats and moved from manufacturing 8 inch to the
5.25 inch to 3.5 inch floppy diskettes. Over the last five years,
revenues have grown at a compounded annual growth rate of 36
per cent and profits at 60 per cent. The company has an 11%
share of the global recordable optical media market, making it
the largest player in India and third largest in the world. Over 80
per cent of Moser Baer's production is exported to 82 countries
across six continents and the company has strong tie-ups with
all the major technology brands in the world. Today, the
company is the fifth largest manufacturer of optical and
magnetic storage media globally.

Moser Baer India is among the world’s largest manufacturers of

optical media products. Since it was set up 24 years ago Moser
Baer has established itself as a dynamic Indian transnational
with a strong focus on research and development, has
successfully developed cutting edge technologies for recordable
optical media, constantly innovating and introducing new
products and processes.

Its goal has been simple and straightforward to be a dominant

player in the global storage media arena. An emphasis on high
quality products and services has enabled Moser Baer to emerge
as one of India's leading technology companies.

8
9
 Vision and Mission
Vision
"Touching every life across the globe through high
technology products and services"

Mission
We will drive growth through our excellence in mass
manufacturing.
We will move up the value chain through rapid development
of technology, products and services.
We will leverage our relationships, distribution, cost
leadership and "can do" attitude to become a global market
leader in every business.

Values
Teamwork
Thinking and working together across functional silos,
hierarchies, businesses and geographies. Cooperating and
supporting each other towards common goals.
Integrity
Consistently behaving and taking decisions in an ethical,
trustworthy and fair manner in all spheres of life.
Passion
Missionary zeal coming out of one's heart to drive to the goal
which gives one a feeling of "do it with pride" and "love to be
there". A feeling that encourages one to dream & realise the
dreams. Self commitment to give more than 100% & create
value.
Speed
10
 Meeting and exceeding customer's expressed or implied
expectations by a "do it" attitude and by doing right, first
time, on time and every time.

KEY MANAGEMENT

Deepak Puri
Chairman & Managing Director, Moser Baer India Limited
As Chairman and Managing Director of Moser Baer India Ltd, Deepak
Puri provides strategic leadership and direction to the organization. He
steers the company with his vision of making Moser Baer one of the
most respected technology companies globally.

Ratul Puri
Executive Director
Ratul Puri has been the Executive Director of Moser Baer India Ltd
since 2001. Ratul is responsible for the overall corporate management
and financial control of the organization.

Rakesh Govil
Executive Vice-President - Corporate Strategy & Business
Development
Rakesh Govil has been associated with Moser Baer India Ltd since
August 1999, and is currently designated Executive Vice-President:
Corporate Strategy & Business Development for the Group.

Yogesh B Mathur
11
Group Chief Financial Officer
Mr Yogesh B Mathur joined Moser Baer India Ltd as Group Chief
Financial Officer in July, 2005. In his current capacity, he is responsible
for steering the functioning of the Finance, Treasury, Accounts, Audit
and IT departments and provides strategic vision and leadership to the
company.

VC Agerwal
COO - Blank Optical Media
Mr. VC Agerwal is the COO - Blank Optical Media at Moser Baer India
Ltd. He has been associated with the company since 2002. He heads
the operations of all the 4 plants at Moser Baer, located in Noida and
Greater Noida.

Ravi Khanna
CE - Moser Baer Photovoltaic Ltd.
Ravi Khanna is the Chief Executive of Moser Baer Photo Voltaic Ltd, a
fully owned subsidiary of Moser Baer India Ltd.
Under his dynamic and open management style, MBPV is
implementing a state of art 80 MW Silicon wafer cell and module
making plant and upto 600 MW of Thin Film capacity by 2010.

Harish Dayani
CE - Entertainment Division
Harish Dayani is the Chief Executive, Entertainment Divison, Moser
Baer and is responsible for providing direction and market leadership
12
for the company in India and will also be responsible for taking this
new initiative to greater heights.

Ram Nomula
CE - Moser Baer Entertainment Services
Mr. Ram Nomula is the Chief Executive of Media & Entertainment
Services at Moser Baer. In this position, he provides strategic
leadership to the division's media mastering, authoring, replication and
packaging services.

Bhaskar Sharma
EVP, IT Peripherals & Consumer Electronics
Mr. Bhaskar Sharma is Executive Vice President in Moser Baer India
Limited. He is a post graduate in Business Administration and has an
overall professional experience of 32 years.

GirishBaluja
ChiefOperatingOfficer-Corporate
Mr. Girish Baluja is the COO - Corporate at Moser Baer India Ltd. He
has been associated with the company since 2005. He oversees
Corporate HR, Corporate R&D, Corporate Supply chain & Six sigma
initiatives. His responsibilities also include OM&T business (MBIL
acquired this specialized Optical Technology and R&D subsidiary of
Phillips).

13
 BrandVision
BRAND ARCHITECHTURE
Redefining

Product Focus
14
Therefore the brand positioning is:

“Moser Baer – The most reliable data storage media with which
your data is safe and sound.”

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 CHAPTER 2

RESEARCH
METHODOLOGY

16
 RESEARCH METHODOLOGY

Meaning of Research

Redman and Mory define research as a “systemized effort to

gain new knowledge.”
Some people consider research as a movement, a movement
from the known to unknown.
Research is an academic activity and as such the term should be
used in a technical sense. According to Clifford Woody, research
comprises defining and redefining problems, formulating
hypothesis or suggested solutions, collecting, organizing and
evaluating data making deductions and reaching conclusions;
and at last carefully testing the conclusions to determine
whether they fit the formulating hypothesis.

Objectives of research

The purpose of research is to discover answers to questions

through the application of scientific procedure. The main aim of
research is to find out the truth which is hidden and which has
not been discovered yet. Though each research study has it’s
own specific purposes but the research objectives can be listed
into a number of broad activities, as following :-
17
1. To gain familiarity with a phenomenon or to achieve new
insights into it. Studies with this object in view are termed as
exploratory or formulative research studies.
2. To portray accurately the characteristics of a particular
individual, situation or group .studies with this object in view are
known as descriptive research studies.
3.To determine the frequency with which something occurs or
with which it is associated with something else. Studies with this
object in view are known as diagnostic research studies.
4.To test hypothesis of a casual relationship between variables.
Such studies are known as hypothesis-testing research studies.

Significance of research

“All process is born of in enquiry . Doubt is often better than

over confidence , for it leads to in enquiry and in enquiry leads
to invention”. Is a famous Hudson maxim in context of which the
significance of research can well be understood. Increased
amounts of research make progress possible. Research
inculcates scientific and inductive thinking and it promotes the
development of logical habits of thinking and organization .
The role of research in several fields of applied economics,
whether related to as a business or to the economy as a whole,
has a greatly increased in modern times. The increasing
complex nature of business and government has focused

18
attention on the use of research in solving operational problems.
Research , as an aid to economic policy , has gained added
importance , both for government and business.

Research Methodology

Research methodology is a way to systematically solve the

research problem. It may be understood as a science of studying
how research is done scientifically. In it we study the various
steps that are generally adopted by a researcher in studying his
research problem along with the logic behind them. It is
necessary for the researcher to know not only the research
methods or techniques but also methodology.

Data Source

The data can be collected from two sources, i.e. primary and
secondary. I have collected entire data of this project on

19
Moserbaer Pvt. Ltd. from SECONDRY SOURCES like websites,
books, newspapers .

20
 CHAPTER 3

COMPANY
PROFILE

21
HISTORY

22
Moser Baer India was founded in New Delhi in 1983 as a Time Recorder unit in technical
collaboration with Maruzen Corporation, Japan and Moser Baer Sumiswald, Switzerland.

In 1988, Moser Baer India moved into the data storage industry by commencing
manufacturing of 5.25-inch Floppy Diskettes. By 1993, it graduated to manufacturing 3.5-
inch Micro Floppy Diskettes (MFD).

In 1999, Moser Baer India set up a 150-million unit capacity plant to manufacture
Recordable Compact Disks (CD-Rs) and Recordable Digital Versatile Disks (DVD-Rs).
The strategy for the optical media project was identical to what had successfully been
implemented in the diskette business - creating a facility that matched global standards in
terms of size, technology, quality, product flexibility and process integration. The company
is today the only large Indian manufacturer of magnetic and optical media data storage
products, exporting approximately 85 percent of its production.

Since inception, Moser Baer has always endeavored to create its space in the international
market. Aiding the company in its efforts has been a carefully-planned and sustainable
business model - low costs, high margins, high profits, reinvestment and capacity growth.
Along the way, deep relationships have been forged with leading OEMs, with the result
that today there are hardly any global technology brands in the optical media segment that
Moser Baer is not associated with.

In 2006, the company announced its foray into the Photovoltaic and Home Entertainment
businesses. In 2007, the IT Peripherals and Consumer Electronics division was formed.

Milestones

1983  Established
23
CHAPTER 3

4 P’S

24
The 4 P’s

 Product

 Price

 Place

25
 Promotion

26
 Product
STORAGE MEDIA

The company manufactures the entire spectrum of optical storage media products including
Recordable Compact Discs (CD-R), Rewritable Compact
Discs (CD-RW), Pre-recorded CD/DVD, Digital Versatile
Disks (DVD-R) and Rewritable Digital Versatile Disks
(DVD-RW) and Blue Laser Discs in the optical storage media
segment. In the Magnetic Data Storage category Moser Baer
manufactures Compact Cassettes, Micro Floppy Disks
(MFD) and Digital Audio Tapes (DAT).

Moser Baer started the production of CDR’s in the year 1999. At

that time it came out with only “Pro CDR’s”. Currently Moser
Baer is producing two kinds of CDR’s viz. Moser Baer Pro CDR’s
and Moser Baer Mini CDR’s. Moser Baer products can meet any
recording requirement. Whether it is archiving important files,
distributing corporate information or duplicating small volume
production runs. CD-R demand has witnessed explosive growth
over the last few years (1998-2002 CAGR 109 per cent). One of
the principal drivers of this growth has been the increasing
“attach rate” of CD-R drives in PC’s and the widespread usage of

27
CD-R media for information storage and data interchange. It
would be important to note that the CD format is well
entrenched in hundreds of millions of homes and offices and is
the only medium virtually guaranteeing information interchange.
Importantly, the latest DVD drives are also backward compatible
to CD-R media.

CD-R Demand Drivers

 A high PC penetration: As more PCs are sold with
Recordable CD and DVD drives, consumption of recordable
media is expected to substantially increase and usage is
expected to become broader based.
 Lengthened PC life: As there has been a perceptible
extension in the life cycle of the PC during the global
economic slowdown, the life cycle of CD-R should get
elongated.
 Price of drives: As prices of recordable CD drives have
reached levels almost that of Read only, drive popularity
 Backward compatibility: Virtually all DVD drives being
currently sold, can playback CD disks, also most DVD
recorders, can also record CD-R disks.
 Due to the differences in applications, and large storage
capacity (700MB), Recordable CD disks should be in use well
into this decade.
 Legacy installed bases: There are over 1.5 billion drives
installed worldwide, which can read CD disks, including the

28
installed base of DVD drives, the number increases to over
2.0 billion and growing.
Varieties of CD-Rs

 Moser Baer Super: Ideal for all general Data, Audio, Video
recording applications.
 Moser Baer Premium: Ideal for critical archival applications
and increased security.
 Moser Baer Extra: 700 MB/80 min, for enhanced storage
capacity.
 Moser Baer Printable: 650 MB/75 min with unique printable
layer.
 Moser Baer Thermal: For thermal printing surface
applications.
 Moser Baer Audio: For optimum recording of music in real-
time applications.

29
 Specifications

Format Orange Book (Part II) and ISO 9660

Recording
650 MB ( 700 MB also available )
Capacity
74 minutes ( 80 minutes also
Recording Time
available )
Unrecorded
Groove reflectivity > 70%
Radial Contrast (typ.) 0.08
Push Pull Amplitude 0.090
Recorded
BLER average < 10 cps
Jitter < 35 ns
Reflectivity (Rtop) > 65%
I11 / Itop > 0.65
I3 / Itop > 0.30
Mechanical
Radial Deviation + / - 0.3º
Eccentricity < 60 um
Stability
Read Cycles > 10^6
Projected Lifetime 10 – 30 years

CD-Rs Demand Drives

Moser Baer defines quality as 100% conformance to customer

requirement. Quality for Moser Baer is not a mere statistic. It
translates into customer delight.

It's like an attitude with the company. It is a part of every

process. It is an integral part of every input that goes into
making of storage media. This is because Moser Baer realises
30
that even one in a million error prone disc can spell disaster for
the user. So, nothing but 'zero defect' manufacturing is what
Moser Baer targets for its products.

Strictly dust free working environments with climate controlled

plants; the top of line machinery & equipment and the
benchmarked processes & practices assist them in giving quality
products consistently.

Moser Baer Pro CD-Rs

Moser Baer Pro CD-Rs are an advanced creation for high-

speed recording and compatible with most conventional
recording drives. Being the first and only 52x CD-R to be

31
launched in India, they also provide excellent thermal sensitivity
to the laser ray and maintain data integrity without degradation
in any way.

Pro CD Recordable Moser Baer Pro CD-Rs are

highly advanced discs that enable high-speed recording
and storing of not just data, but also audio and video
files. The first 52x CD-Rs to be launched in India, they
provide excellent thermal sensitivity to the laser ray
and maintain data integrity without degradation in any way. Moser Baer Pro CD-Rs are
compatible with most conventional recording drives.

Capacity : 700 MB / 80 min

Speed : 2x-52x
Disc 120 mm ± 0.3
:
Diameter mm
1.14 + 0.06 /
Thickness :
-0.01 mm
Centre Hole 15 mm ± 0.05
:
Dia mm
Recording Pthalocyanine
:
Layer Dye
Reflector
: Silver
Layer
Protective
: UV Lacquer
Layer

A CD-R is a blank media that can be used to record data on it.

Once the data has been recorded or written on the CD-R, it
32
cannot be erased. Its storage capacity today can vary from
650MB to 800 MB. CD-R speeds have reached 52x today.

But to write data onto a CD-R, one needs a CD Writer. Like a

regular CD-ROM drive, a CD Writer not only reads data, it can
also write data on the disc. Music sharing has been one
application that has been a trigger as far as the popularity of
CD- R is concerned.

Moser Baer Pro Mini CD-Rs

With hard disks shrinking to the size of 'Thumb-drives', to some,

CD-Rs too have come to be seen as physically bulky and
unnecessarily large in terms of data storage space. Moser Baer
introduces Mini-CD-Rs just for that. They provide you with better
portability while maintaining their superior recording/playback
characteristics and compatibility.

With a diameter of 8 cm, this medium is ideal for presentations

and credentials or for that matter, quite a few mp3 songs! They
come in an attractive box to ensure that even these small CD-Rs
are safe. Best of all, these Minis CD-Rs can be used in any CD-
ROM drive, CD Writer or CD Player. In fact, this media redefines
'Compact' Discs.

33
Capacity : 185 MB / 21 min
24x(Drive
Speed :
dependent)
Disc Diameter : 80 mm ± 0.3 mm
1.14 + 0.06 / -0.01
Thickness :
mm
Centre Hole Dia : 15 mm ± 0.05 mm
Disc Material : Polycarbonate
Recording Layer : Pthalocyanine
Reflector Layer : Silver
Protective Layer : UV Lacquer

Blu-ray Discs
34
 Visit BDA Website
Moser Baer India Ltd., the 2nd largest Optical media manufacturer in the world, brings to you the
highest quality Blu-ray discs, guaranteed by the technology & process expertise provided by one of the
format originators – Philips.

The discs are manufactured at its subsidiary OM&T (formerly Philips R&D) based in Europe and at its
factory in Greater Noida (near Delhi) in India. The Greater Noida facility is the world’s largest single
location optical media factory producing all types of formats.

OM&T is one of the founding members of the Blu-ray disc association (BDA) & a pioneer in
developing the Blu-ray format. Our technological prowess is verified by the fact that Philips has
transferred its entire supply of CD, DVD & BDR calibration and test discs to OM&T.

Blu-ray Technology at Moser Baer

Moser Baer is world’s first company (outside Japan)

• First to ship next-generation formats like Blu-ray discs.

• Supplier to leading OEM brands
• State of the art manufacturing facility in Europe.
• Verified by the Blu-ray disc association: BDR 1x-2x, 1x-4x, 1x-6x and BDRE 1x-2x
• Fully integrated & equipped R&D facilities in Netherlands and India.
• Calibration & Test discs supply for Philips entirely managed by OM&T
• “LTH” dye based BDR 1x-4x at GN*

* under development

Technology at its best

35
 • “Scratch Protect” best in the class surface protection for everyday handling
• “Print Max” Full surface printable Inkjet & Thermal* discs
• Works with leading drives & CE recorders
• Ideally suited for data archiving, hi definition Audio-video recording & distribution etc.
• Lifetime in excess of 50 years

* under development

Meets all your needs

1. BDR 1x-4x, 1x-6x, 25GB

2. BD RE 1x-2x, 25GB
3. Full Surface Inkjet Printable

4. Full Surface Thermal Printable

36
PHOTO VOLTAIC

Moser Baer provide customised energy solutions using different technologies to suit customer
specific requirements.

Crystalline Silicon Cells and Modules

80 MW fully automated, horizontal, in-line cell
manufacturing facility with throughput of 3,000
wafers/hour 80 MW flexible module line capable of
delivering modules in multiple cell configurations
Certifications - IEC 61215 (Edition II), IEC 61730
(Safety Class II), CE, UL 1703

Thin Film Modules

40 MW capacity with products available in quarter
size, half size and full size Use of non-toxic
materials in manufacturing of products Certifications
- IEC 61646, IEC 61730, CE

Concentrator
Strategic Investments in SolFocus for High Concentrators,
Solaria for Low Concentrators and Skyline for Mid
Concentrators

37
\

Moser Baer Home Videos

Overview

Moser Baer Entertainment offers home video titles in various Indian languages at unmatched
prices and is also engaged in media content creation.

The company is the first to offer home videos in every popular language of India and it is
today India's largest Home Entertainment company. It currently offers home video titles in
Hindi, English, Tamil, Telugu, Malayalam, Kannada, Marathi, Gujarati, Bengali and non-
film categories. Moser Baer Entertainment has acquired the rights for close to 10,000 titles in
all the popular languages and has already released close to 3,000 of them in the market.

Headquarterd in Mumbai, the company is establishing a strong presence across the country in
all major metros as well as in smaller towns through an active and well-organized multi-
tiered channel. This move will take advantage of the established Moser Baer production
capability and a well developed distribution network.

The company has released video content in DVD and Video CD formats using Moser Baer's
proprietary and patented technology that ensures the highest quality standards and
significantly reduces cost. The movie titles come with world-class packaging. In short,
Moser Baer Entertainment is working towards providing unprecedented value by offering
high quality products at a price that delights consumers.

38
 Consumer Electronics Products

Moser Baer has entered into IT Peripherals and Consumer Electronics. In IT Peripherals the product
range comprises of USB drives, Memory Cards, DVD writers, PC Peripherals, TFT Monitors, UPS
and External Hard Drives. In the Consumer Electronics arena, the company has come up with a
product range with medium to hi-end positioning comprising of Ultra Advanced LCD TVs, DVD
Players, Portable DVD Players, Digital Photo Frames, Media Players and Multimedia Speakers.

MP3 Players

M
P
5
6
5-
2
G

39
 •

MP 582-2G

• Clip your music anywhere

• Plays MP3 and WMA digital music files
• Random (shuffle) Music Playback
• Hold feature prevents accidental key presses
• Mobile Data storage function

• USB 2.0 for fast file transfers

PRICE
40
Back in 2002 Moser Baer was planning to go for a major
expansion at an investment of Rs. 1000 crores. But the
obsolescence rate of technology in the industry coupled with a
downtrend in the prices of the portable optical and magnetic
storage media devices and shrinking market of the portable
storage media, on the face of rapid growth in the internet
providing free memory space, was a major area of concern for
Moser Baer. The changing shape the technology could have
rendered hundreds of crores of company’s investment go down
the drain.

Despite these early unfavorable predictions and circumstances

Moser Baer emerged a winner. The company is known to be one
of the lowest cost producers in the world in the magnetic and
optical media storage industry. And this strength resulted in a
positive outflow in the company’s investment. Today the
scenario is that Moser Baer can even afford to go for further
price increases owing to various favorable factors most of which
were clearly foreseen by Moser Baer and duly acted upon as
well.

Strong demand across all segments of optical storage media

industry has led to a firm pricing environment. The company had
initiated price increases during the fourth quarter of year 2003-
04, the positive impact of which largely accrued during the first
quarter of 2004-05. However, the Average Selling Price (ASP)
declined by 5%, mainly on account of higher sales of bulk-

41
packaged disks and rising contribution of sales to cross-
licensees. The bulk-packaged shipments rose by over 60%
sequentially in the first quarter.

"In a period which saw firm prices of key inputs, anti-subsidy

duty on EU sales and continued rupee appreciation, we were
able to improve operating margins due to better pricing for our
optical media products," said executive director Ratul Puri.
"While the full impact of anti-subsidy duty will be visible in the
following quarter, strong demand conditions for CD-Rs and
higher contribution from DVDRs should help sustain margins",
he added.

Moser sells recordable compact discs (CDR) in more than three

dozen countries for an average 22 cents each and about 85
percent of its annual sales come from exports.

Moser Baer believes that the recent increases in prices for CD-R
media are sustainable and do not forecast any further significant
price erosion in the market place. With the continuing growth in
demand for CD-R media, conversion of excess CD-R capacity to
DVD-R, closure of smaller and less efficient manufacturing
plants, Moser Baer expects that pricing for CD-R media is
expected to remain in a narrow range.

Moser Baer expects the pricing environment to remain stable

through 3QFY03, with the possibility of prices increasing
42
subsequently. Given their relative low costs, demand for CD-Rs
is largely unaffected by the slowdown. The market demand is
expected to grow at a CAGR of 30% over the next three years.

MOSER BAER HOME VIDEOS

They have recently acquired license to manufacture and distribute VCDs and DVDs of Indian
movies. They sell these CDs at Rs. 28/- and DVDs @ 34/- (both of them individually cost less
than $1 at present exchange rates).

43
 PLACE
Place refers to the means by which your customer acquires your
product. This includes the actual place it is purchased (the shop,
the telephone, the web page, the warehouse) as well as the
actual route of distribution.

Moser Baer has a presence in 82 countries; more than 80

percent of the company's revenue comes from the international
markets. Europe is the company's largest market and it is now
addressing new high growth markets such as Middle East, Africa,
US, Japan, Commonwealth Independent states (CIS) countries
among other countries through its joint venture with Imation
Corporation. Moser Baer looks at the biggest market first and
then runs down that list. It also looks at the markets where the
pricing is the best to start with. It then would want to go to the
markets that are highly competitive and also not very large at
the initial period. They try to develop a product which gives the
customers a very strong advantage.

Markets:
The global market for optical media continues to record robust
44
growth on the backbone of new sales of optical media drives and
the resulting population of drives in the marketplace. The drive
population is expected to grow by more than 70% in CY 2003-04
over the past year which should result in strong demand for CDR
media. The continued increase in the population of drives over
the next few years is, in turn, expected to result in strong
growth in optical media sales. The largest consuming markets
continue to be the USA and Europe. The Company has increased
its market share in the US markets while continuing to be a
dominant player in Europe.

The markets for these products are global in nature with USA
and Europe accounting for around 60% of global demand.

MBI like its peers in Japan & Taiwan caters to the major global
markets and has the additional advantage of satisfying a large
and fast growing domestic demand. The major brands in the
industry are household names like Sony, Verbatim, TDK, Maxell,
Imation, Samsung, Emtec (formally BASF) etc. Most
manufacturers including MBI supply to a number of these

45
branded players and usually have strong long term relationships
with them.

Near term operational objectives

 Value added products
Moser Baer plans to improve its sales mix by leveraging on its
strong research and development and engineering
capabilities to deliver higher value added products to
markets. These products are designed to meet the specific
enhanced functionality demanded by high end customers.
 Strengthen customer base
Even though it is supplying 11 of the 12 largest global brands
in the world, it plans to significantly strengthen customer
relations by entering into strategic alliances with these
customers. Moser Baer also plans to provide its customer
base with enhanced quality, product capability, packaging
options, logistic and supply chain capability.

 Improve geographical sales and distribution

Over the last few years, Moser Baer has significantly reduced
its share of sales in the European community and enhanced
sales into the North American market. Going forward, it plans
to penetrate and grow in emerging markets like China, India,
the Middle East and Latin America. This will reduce threats
from protectionist measures undertaken in the European
Community.
 Time to market
46
 As Moser Baer moves up the technological curve and allies
with the leading technology developers within the industry, its
ability to bring products to market and rapidly commercialize
those products and grow capacities to generate economies of
scale are vital to its success in a competitive environment. A
number of measures, including the development of flexible
manufacturing systems, multiple format ready facilities and
the ready availability of trained skilled manpower will enable
it to achieve these goals.

 Implement ERP
Moser Baer implemented a robust ERP system in 2004. This
should further improve operational efficiency in the system
and enable further improvements on working capital
management, logistics management, improved response
time to customer’s requirements, speedier compliance with
statutory requirements in different geographies.

MBI presently supplies its products to eight of the top ten global
brands on a medium to long term basis and has strategic
relationships with some of these companies encompassing a
range of activities including, but not limited to, sales of products,
raw material sourcing, collaborative R&D programs, reciprocal
training programs etc.

The domestic market contributes about 15 per cent to their

revenues. MBI is the only Indian manufacturer of these products

47
and is also the sole licensee for the EMTEC (formerly BASF)
brand in the domestic market. Domestic market is a significant
and fast-growing market for Moser Baer (especially for CDR) and
it derives better margins in the domestic market. Also, Moser
Baer has an extensive distribution set up. It expects to leverage
this on the back of its understanding of the local market.

48
Progress of ‘Moserbaer’ branded media in domestic
market

The Indian market is seeing a burgeoning growth in the use of

optical media, with increasing demand from the office and
professional segments. Demand for Recordable Optical media is
expected to grow from Rs 400 crore in CY02 to Rs 1,500 crore in
CY05. To address this fast growing Indian market, the company
introduced the 'Moserbaer' brand of optical media. The company
is confident of capturing 50% of this market within the next 3
years.

MBIL has recorded good progress with its 'Moserbaer Pro' range
of products. Since its launch in April 2003, Moserbaer Pro range
of CD-Rs, CD-RWs & Mini CD-Rs have notched up encouraging
sales. The brand is now well accepted in the domestic market
and the consumer feedback on the product has been excellent.
MBIL is confident of capturing over 20% of this market by March
2004.

The Indian music market is dominated by local content. Tens of

thousands of items are published each year but down at a very
specialized and local level. Whether on audio cassette or CD the
runs for audio CDs are tiny; often as small as 100-200 pieces.
With the price of CD-R coming down all the time, the option of
burning low numbers of CD-R becomes more attractive. For
publishers, it makes sense to burn CDs rather than go to the
49
trouble and expense of glass mastering and replication for tiny
quantities involved. This is already beginning to happen now
around India. There are nearly 4,500 audio cassette replicators
in the country. For most, buying a CD replication line falls way
outside their investment criteria. A CD-R burner on the other
hand is well within those limits. Moser Baer sees a larger
demand coming from this area and feels that in a few years'
time the market for CD-R media including all applications could
be anywhere between 150-400 million pieces per year.
“The Indian market for CD replication is really going to start
picking up over the next year or two," says Deepak Puri, the
Managing Director of Moser Baer India. “It's going to grow very
very fast. Demand for audio product is still growing in India.
Most products are supplied on audio cassette. I think the cost of
CD hardware is one of the most important factors. It's much
more critical here in India than in other parts of the world.”

50
PROMOTION
• Advertising
The company has decided to launch its initiative with a
Masterbranding campaign and follow up with campaigns for 2
sub-brands:-
1. Professional segment
2. Re-recording segment
The creative approach has been rendered by the ad agency on
an emotional platform, for strong target audience
identification .The claim being

51
”Welcome to Moserworld, Where perfection is a reality.”
The campaign has used global legends in fields as diverse as
science, sport, and cinema to highlight the product’s
performance and safety of such data when it is captured onto a
Moser Baer product. For e.g.: Einstein, Nadia Comaneci, and
Marilyn Monroe. A few ads are shown below:

Product Campaign – Corporate Segment

The sub-brand for this segment is MoserPro. This brand aims to

position itself on the plank of being a
“Totally reliable storage media for vital business
intelligence”

The creative approach of the agency has been to communicate

the brand promise i.e. absolute security for the user’s
business intelligence, through thought provoking headlines,
using typical management jargon.
The payoff being – Don’t take chances.

Product campaign – Households/youth

The sub-brand for this segment is Mosermagik. The target

audience is the SOHO segment i.e. the Small Office Home Office
segment. The Co. wants MoserMagik to be associated with
‘perfect recording and replay of movies and music’. The creative
52
approach is to indirectly refer to popular entertainment icons so
as to create instant rapport.

A few print ads are given below:

53
54
Media and Public Relations Strategy

Media Strategy

The target audience-specific medium for the respective

audiences is used to generate maximum eyeballs. For e.g. the
Mosermagik product is targeted at the SOHO segment and
therefore advertising in general publications like India Today,
youth and news channels would be an appropriate strategy.
Similarly the MoserPro product targeted at the corporate
segment would do well if advertising is placed in leading
business dailies and magazines like the Economic Times. It is but
obvious that press would be the media driver of Moser Baer’s
advertising. Additionally there would be direct marketing efforts
as well as Internet support. The Co. has decided to put special
emphasis on IT professionals on their direct marketing efforts
and Net support, as they are the opinion leaders in this product
category.
The Co. has also decided to handle the volume segment with
below-the-line advertising and POP (point of purchase)
reinforcement.

Below the line strategy

Focus on the Youth Segment (catch them young)

55
 • Introduce scholarships at NIIT/ Aptech for best students.
- Communicate the schemes at the centers through leaflets,
posters etc.
- Coverage in media (e.g. Education Times).
• Tie-up with IT Educational Institutes and Public Schools,
Book Shops, offering subsidized CD-Rs to students.
• Sponsor IIT Campus Show.
• CP Festival – Tie-up with a music company.
• Sponsorship of a music related T.V. Programs.
• POPs in Music Shops and Video Libraries.
• Sponsor popular (youth-oriented) movie premiere.
• Put Ads and sponsor relevant sections on Youth, Movie and
IT Sites.

Public Relations Strategy

• Focus on the financial segment
- Analysis in business dailies like Economic Times-Investor’s
Guide and Business Magazines.
- Coverage/ interview on business programmes on TV like
NDTV, Star
Business News and CNBC.
- Stock recommendations with emphasis on the intrinsic
strengths of the company.

56
 • Focus on the Corporate / SOHO Segment
- Features in business dailies and magazines.
- Coverage in computer magazines.
- Tie-up with magazines like Data Quest for free sampling of
CDR.

CHAPTER 5

MOSERBAER
SWOT-ANALYSIS

57
Moser Baer - a SWOT analysis

SWOT Analysis

Strength Opportunit
s ies
Lower cost (lower Most major brands are
1 depreciation, 1 looking

opportunities
2 Geographical proximity to
CD-Rs are explosive
key markets 2 emerging
opport
unities
3

Engine 3 I
S ering n
t d
58
 i
a
n

m
r a
o r
n k
g e
t
f i
o s
c
u s
s h
o
o w
n i
n
R g

& s
i
D g
n
a s
n
d o
f
deman
d for
CD-Rs
A growing captive local
4 market
5 Integrated manufacturing
Commi
tted
shareh
6 olders

59
W
e
a
k
n
e
s
s
e
s
Threats
1 High capital intensity CD-R market is in over
market 1 supply
Price
competiti
As most of the products on leads
2 are 2 to lower
growing very fast, they
need to Margin
constantly
expand
manufacturing
capacit 3 A
ies n
t
i
D
u
m
p
i
n
g

a
n
d

a
60
 n
t
i
s
u
b
s
i
d
y

proceedings initiated by
European
Commission on
exports of disks
by
MBI to Europe
Taiwanese moving into
4 China to
Reduce cost of
production
5Emerging TechnologiesStrengths

• Lower capital investment, manpower and overhead costs

make Moser Baer one of the most competitive manufacturers in
the world.
• Strong focus on R&D and engineering enables Moser Baer to
constantly innovate product offerings, and continually reduce
costs.
• A growing captive and local market adds to our growth
potential as a tool to protect their business. This leads them to
seek protection from local governments, who, driven by a desire
to protect local jobs tend to use anti dumping and other trade
protection tools to provide some measure of protection to the
61
local industry. In May 2004, the European Commission initiated
an investigation into the alleged dumping of recordable compact
discs (CD-Rs) by Indian manufacturers (Moser Baer in particular).
A detailed investigation later, the commission concluded that it
could find no evidence of dumping by our company. Following
this, the European Commission terminated its anti-dumping
investigation. The Commission however imposed a 7.3 per cent
countervailing duty, against exports from India to the European
Community, to countervail the alleged subsidization of domestic
manufactures by the Government of India.
These investigations could be instituted again in future and
continue to pose a risk to our operations into Europe. However,
we are following an active strategy to mitigate this threat by
diversifying our global presence and customer base and rapidly
move into newer and larger markets like the USA.
• Emerging technologies
In a dynamic technology environment, Moser Baer’s business
could be threatened from more efficient emerging technologies.
However, considering the explosive growth in digital content,
the low cost and ease of storage on optical media, the huge
installed base of both read and write drives and the time to
market for a new format this threat is perceived as low.
The company’s strong R&D capability and joint R&D program’s
with leading technology players enables the company to lead
innovation rather than trail it.

62
Strategy
1. Short / Medium term:
Our near term strategy is to leverage our manufacturing base,
customer relationship and the explosive growth expected in the
optical media segment to significantly enhance our global share
and retain and improve our leadership position within the
industry. We believe, the optical media industry in the medium
term offers us sufficient growth opportunity with 53 52 capacity
of 40MW, to ensure quality, low cost and uninterrupted power
supply.
• Integrated on a plant wide basis, diverse production machinery
together to make available output, yield, quality and other
information available on a real time basis to better manage the
complex production process.
Expansion
During the year, the company completed it’s expansion in
capacity form 0.8 Billion units to 1.1 billion units, post the
favourable outcome of the anti-dumping inquiry by the EC
(European Commission). Additionally, the company built
manufacturing facilities, to house the next phase of expansion,
along with the required utilities and clean rooms. This will enable
the company to significantly reduce it’s time to market, and
during FY04 capitalize quickly on the growing DVD-R
opportunity.

63
The investments already made, in the facilities, and
infrastructure, along with improvements in process technology,
will enable the company to establish incremental capacity at an
investment 25-30% lower than current capital costs. The
capacity expansion and technology progression initiatives are
being conducted at the company’s newest plant in Greater
Noida. The plant is equipped to produce all formats of optical
media –CD / DVD (recordable, re-writeable and pre-recorded),
Research and development In 2005-06 (FY03), we invested Rs
176 Million (1.62 per cent of its sales) in research and
development and created an 80-member team of research
professionals. A first-mover advantage, higher realization and
enhanced margins are likely to accrue form this investment in
the long term.
Some of the benefits of our R&D program are enumerated
below.
• Introduced nine new products during the past 12 months.
• One of the only two companies in the world to get a
certification from Philips for
48x write media.
• Developed 2x DVD R media
• Developed high speed CD R/W media
• Developed 2.4x DVD R/W

Quality

64
Moser Baer’s quality commitment is enshrined in its Quality
Policy:
“We are committed to Excellence and Total Customer
Satisfaction through Team Work, Ceaseless Innovation, and
Timely Delivery of Quality Products of International Standards.”
Moser Baer has continuously created quality products through
the intelligent use of technology, committed human resources,
and the extensive use of advanced statistical techniques to
monitor and control product quality. As a result of this we have
surpassed world-class quality standards, with defect ratio for
some of our products approaching six sigma levels. We moved
closer to our vision to make the ‘Made in India’ mark respected
by customers and a testimony of world-class manufacturing
standard.
Marketing
Moser Baer marketed a growing variety of products with a
visible branding differentiation in 2004-07. We gained the
goodwill of existing and new customers by servicing them with
speed and sensitivity. Strict confidentiality of proprietary
processes and delivery of promised standards helped build
strong customer loyalties. In house developed and patented,
packaging variations, enabled us to offer a visibly differentiated
product offering to customers.
Our share of the global market has grown from a mere 1% in
1999, to over 11 per cent in FY02-03.
Marketing highlights, 2006-07
65
• 2 new major OEM’s added to our list of customers.
• Eleven of the world’s top twelve global brands sourcing from
us.
• We entrenched our presence in 36 new countries; balanced
our large presence in Europe with an increasing US and
emerging market focus.
• Value-added features/packaging were provided to
• We shrank new product development time from 22 months to
ten months Alliances
During the year, the company entered into a global alliance with
Imation Corp, USA, resulting in Imation sourcing a substantial
part of their requirements of optical media from Moser Baer.
This sourcing deal estimated to be worth in excess of US$100
Million per annum, is the single largest outsourcing deal ever
entered into with an Indian company.

Product pricing
The Average Selling Price (ASP) of the company is impacted by a
number of
factors:
• Ratio of sales of different formats in the overall sales mix: As
an example
66
DVDs sell for US$ 1 to 1.5 and CD-R sell for around 20-25 cents.
A higher
percentage of sales of DVDs significantly improves ASP’s
• The type and style of packaging - CD-R and DVD-R are
packaged in many different types of cases / boxes which can
significantly impact the selling price(as an example CD-R
packaged in jewel boxes sell for 30% more than CD-R packaged
in cake boxes)
c) The ratio of niche products in the overall product mix: Niche
products can sell for prices, which are substantially higher than
standard products. A higher proportion of niche products in the
overall product mix can influence the ASP.
During FY 06, ASP declined sharply over the prior period. (ASP
declined by 19.6 per cent over the FY 05) However afterhitting
their lows by the end of Q2FY06, ASP’s stabilized and started to
increase by Q4FY06. Overall, the company has raised prices of
its products between 5-15 per cent, the full impact of which
would only be seen during the following financial year.
Revenue analysis
The FY06 was a challenging year for Moser Baer as a result of
over supply that existed in the first half of the year, the
temporary postponement of capacity expansion as a result of
the anti – dumping investigation, sharply increasing input costs
driven by a rising petrochemical prices and the appreciation of
the Indian rupee. We reduced the impact of these factors by
sharply increasing the manufacturing volumes through improved
67
production efficiencies, enhanced contribution from sales of DVD
products and commencement of sale of packaging materials to
outside third parties. Towards the second half of the year, we
saw significant improvement in the market resulting in increases
in selling prices and a sharp reduction in inventories.
Consequently, the total revenues increased from Rs 6805.59
millions in FY05 to Rs 10855.22 millions in FY06; a 59.50 per
cent increase.

Margins
Moser Baer’s EBIDTA margin declined from 46.61 per cent in
2005-06 to 36.59 percent in 2006-07 for a number of reasons:
• Reduced ASP’s during FY06.
• Sale of lower margin jewel box products.
• Due to the postponement of the expansionat greater Noida,
certain expenses associated with the expansion were charged to
the P&L account.
• Price increase of inputs (polycarbonate, general-purpose
polystyrene, high impact polystyrene, furnace oil and freight)
had a bearing on margins.
• Relatively low yields came from the new lines at Greater
Noida, which is a usual phenomenon in early stages of the
production cycle, as opposed to 95 per centplus yields in stable
plants.
Capital structure

68
At the start of 2006-07 (FY06), our capital was Rs 559.06 million,
comprising
48,406,472 equity shares of Rs 10 each and 75 million
cumulative redeemable
preference shares of Rs 100 each (11.5 per cent). On the
redemption date - 24 March 2006 - we redeemed these
preference shares.
As on 31st of March 2007, there were no preference shares or
warrants outstanding.

Reserves
Moser Baer’s reserves increased 25.90 per cent from Rs 8732.
43 million to Rs 10994.43 million in FY06. This increase was
primarily on account of a 9.69 per cent rise in our retained
earnings. The Securities Premium Account comprised 41.68 per
cent of the total reserves, while General Reserve comprised
58.30 per cent. We did not have any revaluation reserves on our
books as on 31 March 2006.
Loans
Over the years, Moser Baer has funded its ongoing expansion
programmes through loans raised at progressively lower costs.
We have also tried to build a prudent basket of currencies to
hedge against currency risks, and minimize costs. As a result,
our average cost of debt declined by 40 basis points in FY06.
Our current currency wise total debt outstanding is as follows:

69
We believe that our current total debt to equity ratio of 1.02,
interest service cover ratio of 5.35 and debt service cover ratio
of 4 place us in a prudent and comfortable gearing position.
CRISIL has rated short-term commercial paper program as P1+,
indicating the highest level of safety, a favourable financial
profile and business strengths. The Company’s financial profile is
characterised by high turnover growth resulting from the
substantial expansion of its CD-R capacity, strong operating
margins and healthy debt coverage indicators.
Financial objectives, initiatives and achievements Interest Our
interest outflow increased from Rs 375 million to Rs 543 million
in FY06, representing an increase of 44.80 per cent, primarily on
account of a rise in the our overall debt levels.
Capital expenditure We invested Rs 7781.65 million to meet the
increased demand for optical media products and new emerging
formats at a state-of–themanufacturing facility at Greater Noida.
We intend to enhance our optical media capacity from 1.1 billion
to 1.45 billion during FY07. The incremental capital expenditure
is being funded by debt and internal accruals. Our incremental
investments for capacity creation are between 20-25 per cent
lower than our historic costs.
Gross block and depreciation In 2006-07 (FY06), our gross block
increased by 115.90 per cent from Rs 9132 million to Rs 19716
million on account of the ongoing capacity expansion. Moser
Baer’s revenuesto-assets ratio improved from 0.50 in 2005- 06
to 0.56 in 2006-07, reflecting an improved asset utilisation. We
70
provided depreciation on a straight-line basis as per the rates
specified in schedule XIV of the Company’s Act 1956.
Depreciation increased from Rs657 million in 2005-06 (FY05) to
Rs 1175 million in 2006-07 (FY06) on account of increase in fixed
assests. Due to the flexible nature of our asset base (most of our
assets, production lines and facilities can be used to
manufacture multiple formats) and the relatively long life cycles
of products in our industry we believe that the risk of our asset
base becoming obsolete is low.
Working capital management
We have substantially reduced our working capital levels during
the year through a mix of improved management and better
information systems. Overall net working capital has reduced to
41.48 per cent of revenues from 77.37 per cent in FY06 and
126.42 per cent in FY 05.
• A reduction in the receivables cycle:
We significantly reduced receivables from 120.9 days of
revenues (start of 2006-07) to 68.8 days (last quarter of 2005-
06) as against an industry benchmark of 90-120 days. This sharp
decline in receivables was achieved through a number of
initiatives: a revision in the terms of trade following an
improvement in the demand and supply balance during the
course of the year, a more stringent credit policy and improved
information availability.

71
• A reduction in inventories: By better utilizing our information
systems, and managing our stock keeping levels, we
significantly reduced our inventory levels during the year.
Loans and advances
In FY06, loans and advances stood at Rs 506.69 million
compared to Rs 875.03 million in FY05, a 72.69 per cent
decrease. We disbursed loans and made advances to the
suppliers of capital goods and raw materials. Most of these
advances were to capital equipment suppliers, which were
secured against bank guarantees.
Capital employed
The total capital employed invested in our business increased
from 17334.95.29 million in FY05 to Rs 23237.66 million in FY06,
representing an increase of 34.05 per cent. The company
generated a Return on Average Capital Employed of 17% in
FY06. Surplus management In a growing business, there were
junctures when the temporary availability of resources was
higher than the immediate use. These short-term surpluses were
invested in lowrisk financial instruments that optimised returns
and protected the invested principal.

72
Significant Accounting Policies
• Fixed Assets and Capital Workin-Progress
Fixed Assets are stated at cost of acquisition less depreciation.
All costs relating to the acquisition and installation of fixed
assets are capitalised and includes financing costs relating to
borrowed funds attributable to acquisition upto the date the
assets are ready for use, rollover charges on foreign exchange
contracts and adjustments arising from exchange rate variations
relating to specific borrowing attributable to these fixed assets.
None of the fixed assets has been revalued during the year
Capital Work-in-Progress includes expenditure incurred on
assets under / awaiting installation and capital advances paid.
• Inventories
Inventories are valued at cost or net realisable value, whichever
is lower. Raw Materials and Stores & Spares are valued at
moving weighted average rates. Work-in-Progress and Finished
Goods are valued at cost which include direct material, direct
labour and appropriate factory overheads.
• Depreciation

73
Depreciation is provided on straight-line method at the rates
specified in Schedule XIV of the Companies Act, 1956.
Depreciation is provided on pro-rata basis from the month in
which the assets have been put to use and upto the month in
which assets have been disposed off. Depreciation on additions
to the value of existing fixed assets on account of revaluation of
foreign currency loan is being provided prospectively taking into
account the residual life of the assets based on the rates
prescribed in Schedule XIV of the Companies Act, 1956. Fixed
Assets costing individually Rs. 5000 or less are fully depreciated
in the year of addition.
• Revenue Recognition
Sales are recognized on dispatch of goods (Domestic) and on the
date of shipping bill/bill of lading (for Exports) to end customers.
Sales are net of sales returns, discounts and Sales Tax. Scrap
income is recognized on receipt basis and is included under
Operating Revenues.

74
Human Resources / industrial relations
Moser Baer recognises that in a volatile technology
environment, people represent our biggest insurance. We owe a
large part of our success to the excellent human resource base
that we have created. The intellectual capital of Moser Baer is
reflected in the quality of our business strategy, our
manufacturing systems and development capability, and the
strong relationships we have with customers.
We added 1006 new people in FY06 to our human resource
base, up from 875 recruits in FY05.
Moser Baer’s internal control systems are commensurate with
our size and operations. Deloitte Haskins & Sells is our internal
auditor verifying the internal controls. We also have a Systems &
Procedures Audit Department. Internal controls have been
further strengthened by the implementation of ERP.
Disclosures During the year under review, the Company has not
entered into any transaction of the material nature with its
Promoters, the Directors or the management, their subsidiaries
or relatives, etc. that may have potential conflict with the
interest of the Company at large. Management’s Responsibility
Statement The management is responsible for preparing the
Company’s consolidated financial statements and related
information that appears in this annual report. The management
believes that these financial statements fairly reflect the form
and substance of transactions and reasonably represent the

75
Company’s financial condition and results of operations in
conformity with Indian Generally Accepted Accounting Principles.
Disclaimer
Some of the statements in this report that are not historical facts
are forward-looking statements. The forward-looking statements
include our financial growth projections as well as statements
concerning our plans, strategies, intentions and beliefs
concerning our business and the markets in which we operate.
These statements are based on information currently available
to us, and we assume no obligation to update these statements
as circumstances change. These are risks include, but
uncertainties that could cause actual events to differ materially
from these forward-looking statements. These risk include, but
are not limited to, the level of market demand for our services,
the highly-competitive market for the types of services that we
offer, market conditions that could cause our customers to
reduce their spending for our services, our ability to create,
acquire and build new businesses and to grow our existing
businesses, our ability to attract and retain qualified personnel,
currency fluctuations and market conditions in India and
elsewhere around the world and other risks not specifically
mentioned.
Our comprehensive risk governance culture ensures that
business decisions taken balance risk and reward. Consequently,
our earnings-generating initiatives are consistent with our risk
standards.

76
Our risk-management revolves around corporate policies that
outline standards and provide measurement guidelines for each
risk category. The company proactively evaluates and puts in
place risk-mitigation initiatives, sets prudent limits on quantum
of risk undertaken and does risk evaluation of major policy
decisions.
We manage the variables impacting business risk with a
disciplined risk management process in keeping with established
standards. The risk management strategies and processes are
periodically reviewed in keeping with the changing environment.
Moser Baer’s risk-management mechanisms are consistent with
the strategic direction of the company, desired total returns to
shareholders and the credit rating of the company. Our risk
appetite dictates the risk-management initiatives. Risk
environment A number of potential risks in the current
environment might make the optical media industry prospects
unattractive over the coming years. These risks may stem from
technology obsolescence, customer concentration risk and
geographical risks amongst others. Moser Baer is, however, well
poised to manage and mitigate these risks.
TECHNOLOGY OBSOLESCE RISK MANAGEMENT
The obsolescence of technology is inevitable and Moser Baer’s
real challenge is to anticipate and respond to both evolutionary
and disruptive changes. However, many technologies may prove
to be more resilient than anticipated. For example, the
removable storage segment has proven to be remarkably

77
resilient in the face of rapid technological developments with the
need for broad based global compatibility being a strong
stabilizing influence. The 3.5 inch floppy diskette still survives
and is only now making its exit after 22 years despite being
regularly confronted with far more advanced and capable
storage solutions. The same solid entrenchment is observed with
CD-R whereby a huge global installed risk management. As a
company poised to take on the mantle of industry leadership,
Moser Baer is exposed to various risks. - Some of these risks are
external, and result from the business environment we operate
in, and some are internal to the company. We have developed a
risk reporting management process to help manage potential
risks in an informed manner. We have a three-pronged risk
management process.
Effective processes and models
Comprehensive risk governance
Qualified risk professionals

As installed capacities in global data storage industry have risen,

prices have sharply declined ,Moser Baer has responded to
price-based competition with an unbeatable price-value
proposition – superior quality, timely delivery, attractive price
and regular introduction of new products. The success of this
approach is reflected in the company’s increasing global share
and high growth.
SECURITY RISK MANAGEMENT
78
Operations could be disrupted due to natural, political and
economic disturbances.
As a part of its Disaster Recovery Plan, all related risks have
been mapped by the company. A Disaster Management Team
has been entrusted with mobilization of resources and asset
safety during emergencies base of readers and writers,
estimated to far exceed 7 billion units by 2007, have served to
provide the format with considerable staying power even in the
face of exiting new options such as high capacity optical disc,
solid state memory, broadband, and wireless delivery. The
position is further strengthened by a number of compelling
factors;
The versatility of the CD and DVD format families has served to
establish them as a bridge between the information storage and
entertainment segments thereby greatly extending their utility
and reach.
The rapidly proliferating DVD format, the most rapidly growing
Consumer Electronic (CE) product in history, not only maintains
seamless backwards compatibility with CD-R and the other
members of the CD family but opens up complementary new
video, multi-media, and game application segments further
strengthening the global mass appeal of the 120mm disc
formats.
The flexibility and reach of the CD and DVD formats has proven
to be compelling technology enabler for a broad range of
Industries spanning the Personal Computer and CE segments.
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These now have a vested interest in the preservation and
orderly evolution of this technology infrastructure.
Moser Baer expects that the above factors will result in strong
demand for CD-R discs going forward and that the market for
DVD recordable and rewritable disc will grow to comparable
levels; with global demand climbing to the level of billions of
discs in the next few years.
At the same time, the Company has taken concrete steps to
ensure that its manufacturing infrastructure and technology
base are fully capable to meet the needs and requirements of
the anticipated evolution in optical disc technology from CD to
DVD and beyond this, to the carious Blue Laser based high
density formats that have recently been announced.

Thus, while various new and emerging technologies have the

potential to compete technologically with CD and DVD, we
believe that significant barriers are in place to prevent, or at
least slow down, the displacement and eventual obsolescence of
these formats. These include:
Hundreds of millions of satisfied, cost conscious users and a
current global installed infrastructure base of over 2 billion
compatible hardware devices. The latest projections suggest
that even as far out as 2010 almost 80% of the installed base of
optical disc writers will be CD-R compatible.
A broad coalition made up of almost all major global PC/CE
companies and content providers into whose business models
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CD/DVD products and applications have been integrated and
who must gain from any transition. Billions of dollars invested in
CD/DVD hardware and disc manufacturing capacity and the
need for similar infrastructure investments for alternative
technologies.
STEPS TAKEN TO MITIGATE TECHNOLOGIES RISKS
In the dynamic storage market segment, segment significant
technological risks exist in a number of critical areas, all of
which can have considerable commercial/financial implications.
Moser Baer has invested substantially in addressing and
mitigating risks in all these areas, often with multiple degrees of
redundancy.
Ability to rapid commercialise new products:
The internal R&D resources have been steadily expanded and
strengthened and today cover the spectrum from CD to DVD
( pre-recorded, recordable and rewritable). Numerous internal
innovations have resulted in a product leadership position for
Moser Baer in CD-R and we are rapidly extending this to other
formats.
The newly commissioned state-of-the art mastering facility will
round off Moser Baer’s technology platform and equip the
company with resource base required for the next decade. In
fact, preliminary R&D efforts in Blue laser based formats
(expected to reach the mass market in the 2006/2007
timeframe) have begun.
Access to new technology:
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Through long standing strategic partnerships with key
technology providers, including many of the leading global
companies at the forefront of new format development, we have
unfettered access to cutting edge technology and process know-
how. The recently announced partnership with Imation Corp. is
the latest in a long line of such arrangements and provides an
extra dimension to Moser Baer’s future technology portfolio.

Drive/media compatibility:
Today, by virtue of being recognized as one of the major
suppliers of optical media to the global markets, Moser Baer has
forged excellent cooperative links with all major hardware
suppliers. They commonly utilize our media in their product
development activities and regularly provide Moser Baer with
preproduction samples to ensure seamless compatibility. In
addition, Moser Baer’s blue chip customer base provides an
additional level of product compatibility assurance. The
culmination of our efforts was the fact that Moser Baer was one
of the three CD-R disc manufacturers (and the only non
Japanese one) certified with the first 52x writers that recently
came to market.
Evolutionary capabilities of manufacturing infrastructure:
By virtue of its relatively late expansion, Moser Baer is in the
unique position of possessing a very high proportion of
advanced, 3rd generation, multi-formatcapable manufacturing
platforms. These will provide us a seamless pathway to future
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proof its capital investments and more importantly, to tailor its
operations to provide an optimal, evolutionary product mix.
Other risks and key management initiatives
1. INDUSTRY RISK MANAGEMENT
Moser Baer operates in an industry where technology trends are
constantly changing and evolving which may jeopardize future
growth.
The company, however, faces no immediate threat from the
dynamic environment in which it operates. On the contrary, it
stands to benefit from the current growth trends in the DVD-R
format.
As consumption evolves from analogue to digital technology, it
is prompting legacy recordings to migrate to new media.
Besides, the growing popularity and increased functionality of
new products like drives, readers, writers and PCs owing to their
better storage capacity, wider applications and greater security,
are expected to drive demand exponentially.
2. CUSTOMER ATTRITION RISK CONTROL
Our over-dependence on a few customers could impact
revenues in the event of attrition. Given our product quality,
unbeatable price value proposition and excellent service, Moser
Baer added 2 large OEM customers while not losing a single top-
tier customer in FY03. A combination of these initiatives
extended our reach to a wider larger spread of customers. Due
our wide customer base (we believe that we have one of the

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widest customer bases in the industry), and the ability that gives
us to increase
volumes with customers, we believe that the impact on the
company in the event of customer attrition would be low.
3. GEOGRAPHIC RISK MANAGEMENT
A geographically concentrated revenue base may affect growth
in the event of some of these regions not performing up to
expectations. To mitigate the risks arising from servicing
customers in only a few regions - USA, Europe and Japan - Moser
Baer marketed products to 36 geographies over the last few
years. We continue to focus on emerging markets like India,
Latin America and the Middle East, even as we service
customers in Europe and North America.
As a de-risking measure, we have reduced our exposure to
European customers, to minimize the impact of protectionist
measures the EC may undertake in the future.
4. PEOPLE RISK MANAGEMENT
High quality human resources are vital to the success of our
business. The company has worked towards providing
challenging high growth environment for it’s employees. We
have continuously benchmarked ourselves to improve our HR
policies and practices.
Hewitt Consultancy was appointed to review the roles of key
members, institute a performance-based remuneration structure
and suggest HR practices that would help create an inspiring
workplace leading to the retention of human intellectual capital.
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Over the years, this has led to a reduction in attrition rates (four
per cent in 2002-03 compared to 7-12 per cent for the rest of
the industry). We now intend to implement an ESOP to enhance
employee motivation and retention.

5. COMPETITION DE-RISKING
By virtue of its relatively late expansion, Moser position of
possessing a very high proportion generation, multi-format-
capable manufacturing 63 62 Creating value EVA fact sheet EVA
Calculation
The negative return to share holders is the result of certain
extraneous factors beyond the control of the management:
• The anti-dumping and anti-subsidy investigations
• Postponement in commercialisation of additional capacity by a
quarter
• Increase in costs due to appreciation of the rupee
• Increase in prices of raw materials due to rising petrochemical
prices

85
 Awards

 EFY 2008 Special Award to Mr Deepak Puri, CMD, Moser Baer

2008
 Golden Peacock Environmental Eco –Innovation Award 2008

 Golden Peacock Award for Occupational Health and Safety '07

2007
 Award for being 'Highest Exporter in IT Sector' from 'Export Promotion
Council for EOUs & SEZ Units'.

 Business Standard 'Most Innovative Company of the Year Award' 07'

 ELCINA - DUN& BRADSTREET Awards, 2006 - 07 in the categories-

Quality, R&D and Business Excellence

 Award by "Electronics and Computer Software Export Promotion Council

(ESC)" in IT Hardware category, titled "Award for Maximum IT Hardware
Exports"

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  "BEST OF ALL" Rajiv Gandhi National Quality Award by Bureau of Indian
2006 Standards

 Indira Awards for Marketing Excellence awarded "CEO of the Year Award"
to Mr. Deepak Puri, CMD

 "Electronics Organisation of the Year Award" from Electronics for You

Publication Group.

 PHDCCI - Distinguished Entrepreneurship Award' 06 to Mr. Deepak

Puri, CMD

 Golden Peacock Award for Competence in Quality and Innovation

2005 Management

 Global Industry Leader Award" to Mr. Deepak Puri and "Excellence in

Manufacturing Award" to Moser Baer from Optical Disc Systems

 Golden Peacock Environment Management Award

 Plasticon Award 2005 by Plast India Foundation

 Frost & Sullivan Awards for excellent Manufacturing Practices.

2004
 DataQuest Top 20

 Deloitte Award for Fast Growing IT Company and Manufacturing

Excellence

 Corporate Role Model and Lifetime Achievement Award to Mr. Deepak

Puri, Managing Director, Moser Baer by Centre of International Business., Amity
Business School, Noida

 Dataquest IT Man of the Year Award 2003 to Mr. Deepak Puri Managing
2003 Director, Moser Baer

 Business Today - India's Best Managed Company for the year 2003

 NMA Leadership Award 2003 to Mr. Deepak Puri, Managing Director,

Moser Baer

 Deloitte Touche Tohmatsu Fast 500 - Asia Pacific's Leading Technology

87
 Companies in 2003

 Dataquest Awards - Top Growth Company for the year 2002-03

2002
 Ernst & Young Entrepreneur of the Year 2002 for Manufacturing to Mr.
Ratul Puri, Executive Director, Moser Baer

 LMA (Ludhiana Management Association) Vardhman Award for

Entrepreneur of the Year 2002 to Mr. Deepak Puri, Managing Director, Moser Baer

 All India Award - Highest Exports in Electronic Hardware (Non-SSI) for

2001 2000-01

 The Economic Times Awards for Corporate Excellence - Company of the

year 2001-02

 Dataquest Top 20 - Fastest Growth Company for the year 2001-02

 ELCINA (Electronic Component Industries Association) Electronics Man of

the Year to Mr. Deepak Puri, Managing Director, Moser Baer
96-97  Highest Exports Award in Electronic Components amongst Non-SSI
Category

CONCLUSION

• After studying the MOSERBAER PVT. LTD. , we conclude

88
 that Moserbaer Pvt. Ltd. is the among the top two media
manufacturers in the world .Entered the highly exciting
and emerging global technology space of photovoltaic in
mid-2005

• It entered into the fast growing Home Entertainment

Business in 2006 and is the first to offer home video in
every popular language of India and is the largest home
entertainment company in India

• The first storage media company in the world to ship HD

DVDs using a special disc structure using common
materials.

• Lowest-cost manufacturer of optical media in the world.It

is the highly R&D-focused company .

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 LIMITATIONS

Although the project has been worked out at its best yet there
are some limitations , which cannot be overlooked. Had these
limitations been overcome, the findings would be accurate.
Some of the limitations are :

1.Time constraint :
Time was really a limiting factor for the project . It’s really
difficult to work out such a large project between two months
time.

2. Data constraint :
All the data that has been collected for this project, has been
taken from secondary sources like websites, books and
newspapers.

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 BIBLIOGRAPHY

WEBSITES
• www.moserbaer.in

• www.moserbaerpv.in

• www.moserbaerhomevideo.com

• www.chip.in

NEWSPAPERS
• THE ECONOMIC TIMES

• THE TIMES OF INDIA

• THE MINT

BOOKS
MARKETING MANAGEMENT BY
PHILIP KOTLER

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