Tinplate Company of India (TCIL)

History
The Tinplate Company of India Ltd. Was established in 1922, in Jamshedpur, India, in order to manufacture tinplate to meet the demand for 15-litre tin cans for packing kerosene.

The company was jointly held by three companies making tinplate cans: Burmah Shell, Shaw Wallace, and Tata Steel.

THE PRODUCT, MARKET AND COMPETITION

The Product
Tinplate is a low-carbon steel, coated with tin and used for packaging (i.e. suitable for any food or non-food product requiring packaging).

Competition
Other materials used for packaging such as;
Plastic, PET(polyethylene terephthalate), aluminum, blackplate, Tetra Pak and paper.

Customers
TCIL supplied tinplate to manufacturers in four major product segments; Edible oil cans Soft drink crowns Processed food Batteries

Classification AND Application of Tinplate

1. Prime grade tinplate free from any visual defects found an application in food packaging i.e. baby food, fruit pulp and juices

2. Secondary grade tinplate banned for food packaging in a number of countries, as it could cause food to become carcinogenic. Used for packaging non-food products, such as paints and lubricants

The tinplate is used to manufacture cans for edible oil (cooking oil)

Market size of Tinplate Industry in India

Market size = 210,000 metric tons (MT)

12,000

198,000

Non-food sector

Food sector

Consumption of Tinplate as a %age Out of 210,000 MT

1% 5% 7%

17%

70%

Edible Oil

Processed Food

Soft-drink Crown

Battery

Miscellaneous

Supply Chain Participants for tinplate in edible oil cans and packaged goods
Tinplate Supplier Can Manufacturer Edible Oil / Packaged goods Manufacturer

Channels i.e. distributors, retailers

Consumer

Distribution and Promotion

TCIL distributed its products through a network of 15 agents throughout the country. A sales team of 20 personnel interacted with customers in other segments [i.e. processed food (15 customers), crowns (4 manufacturers), batteries (4 producers)]

Personal selling was the dominant promotion method used by all companies in all segments.

Loose Market

A distinguishing feature of the edible oil market was the buying behavior of consumers. They bought in loose quantities that were not standardized by size and were not branded.

Threats
Lowering of customs tariff (duty) Household units becoming smaller Regulating standards lacking enforcement i.e. lack of monitoring mechanisms

Edible oil in comparison with other segments

Coca-Cola and Pepsi were the two brands that dominated soft drink industry.
Battery manufactures bought about 90% of their tinplate from foreign companies.

Cont.
Edible oil in comparison with other segments
Processed food industry used tinplate for packaging foods such as fruit pulp and juices, mushrooms, coffee etc. Nestle and Broke Bond are the well known companies, buying 22 % of their cans from TCIL.

Competition to TCIL in the edible oil was largely from the unorganized companies i.e. having 54% of the market.

Market Share of companies across segments by volume (tinplate supply)

as percentage of the total market (i.e. 100%)

80% 70% 60% 50% 40% 30% 20% 10% 0%

TCIL

FRITZ

SUKAI

TMN

Unorganiz ed Supplier 54%

SAIL

Battery Edible Oil Crown Processed Food

10% 28% 10% 22%

45% 45%

45% 18% 45% 78%

AT ISSUE!
Should TCIL continue in the edible oil segment? How can TCIL compete with foreign companies?

Thanks