TCI PACKAGING DIVISION CASE PRESENTATION

Submitted to: Dr. M R Suresh

Presentation by Group 9, Sec ‘B’
Pooja S-19036
Katta Ashish-19144
Nishan N-19153
Prabhu Narayan-19156
Sindhuja Sista-19171
 CASE FACTS
• TCI is a 1.5 billion dollar company
• It has 7 main products like tobacco and cigarettes, packaging and printing.hotels,seeds and edible oils, paper
and board, financial services and international trading
• Total export earnings were 761 crores of which agro- exports accounted 650 crore which include
cashews,mango,spices and tobacco
• Brand leaders in liquor,foods,detergents etc.
• The company won awards for packaging
• Collaboration with BIB lead to the success and was all because of convenience,hygiene,cost effective
• The 2 major markets for cashew kernels- New York and London and India was the largest exporter of cashew
kernels at international level.
• India faces competition from Brazil as Brazil has advantages of proximity, low prices, good quality etc.
• The system used to pack cashew for bulk exports is called “vitapack”
• 2 packed tins are made with cardboard and steel strapped and then placed in bell jar vaccumized upto 26
inches and the tins are finally sealed with tin and lead soldering
• Packaging is procured from Tamil Nadu and Kerala, tin plates from Calcutta
 CONTD.
• Problems in tin packaging-lead solder contamination,disposability,recyclability,safety aspects
• Features of bulk packaging: strength to withstand pressure of handling and transport, containers should be
leak proof, shelf life of cashews,etc.
• Association of cashew exports formed a committee to develop alternative packing solutions and several
innovations were made such as reduced tin concentration, tin with rubber compound and electroplating, tin
container’s mouth sealed with secondary lid
• Kovak packaging- packing cashew kernels in aluminium foil and is not recyclable. This packaging is used
by brazil
• CAM Company packaging produces small sized tins upto1 kg packed in a cardboard for which the top and
the bottom is made of tin sheets, the cost of production is very high
• TCI is trying to adapt BIB technology for packaging and High density Poly Ethylene of 4 layers is used as a
container. They are planning to start commercial production from next season.
CORE ISSUES
 
Production of tins involves usage of lead solder which makes it leak proof, consumers feared of lead solder
getting in touch with the cashew kernels as it is health hazardous
• Since consumers were getting health conscious and awareness of lead poisoning over world had made the
importers of cashews to pressurize the exporters to adopt alternative bulk packaging methods.
• Disposability was another issue. The tins when reach their destination and after being emptied they are
useless because retailers use their own brand while packaging cashew kernels, and because tins requires
huge floor space, importers had to scrap these tins which requires efforts and cost and it was considered a
problem.
• In western countries consumers forced the markets to go green, and become environment friendly, the
government also formulated guidelines for packaging demanding recyclable packs. This became an issue
because tins are not recyclable.
• Safety measures: Tins when cut have sharp edges and people who used them might get injured .
 TYPES OF PACKAGING

• Vitapack System
• Kovak Packaging
• CAM Company’s Packaging
• TCI bag-in-box Flexi packs (BIB technology)
 AAA FRAMEWORK
Adaptation - different strategies that adjust to differences across countries and adopt different packaging
methods according to the needs of the countries.

Aggregation - strategies that overcome some differences among countries by grouping them based on
similarities and coming up with new technology and making some innovation in the existing bulk packaging
systems, so that countries where the cashew kernel are exported, they can be satisfied, and problem can be
minimized

Arbitrage –TCI packaging is one of the affordable packaging's company it can plan to go to other companies
where cashew nut exporting was more and in similar position as India.
 CAGE FRAMEWORK

Cultural Distance:
In every country the cultural dimension is different and for doing business TCI being an Indian company
should have to implement a proper structure.
Administrative Distance:
• Currency differences
• India, UK and USA are federal governments where as Netherlands, Singapore is parliamentary
governments.
Geographic Distance:
Geographic Distance plays a major role in expanding the business it determines the physical aspect of distance
between the two countries because the nature of transportation and climatic conditions, and more.
It also harps of the geographic distance between the two countries in terms of miles or kilometres that
separates the company from the target market or suppliers.

Economic Distance:
If we see in the case Brazil has become a big competitor for Indian cashews as the cost and quality plays a
very crucial factor here and the developed countries have much purchasing power relative to developing
countries the developed countries will purchase more cashew kennels and it have enough measures to store.
1.WHAT ARE THE PROBLEMS FACED BY CASHEW INDUSTRY REGARDING
PACKAGING OF CASHEWS FOR EXPORTS?

• Lead solder contamination-Process of production involves lead which is health hazardous, increased health
awareness led to problems for the industry.

• Pest attacks in go down- The smell of the cashews attracts rats and rodents. Hence, packaging should be
made in such a way that it is smell proof.

• Disposability and shelf space-These tins are used for packaging occupy a lot of shelf space and are not
disposable to which the importers were asked to pay for scrapping and disposing of tins

• Recyclability-In most of the countries the consumers are forcing markets to become “green” and
environment friendly. They have formulated guidelines for packaging and are demanding recyclable packs.

• Safety aspects with respect to sharp edges of the tin- Tin packaging was unsafe as it had sharp edges
which may injure the person handling it.this problem prevailed and the importers were keen to get rid of
problem and have safe packing.
2. IS THE CASHEW PACKAGING MARKET ATTRACTIVE ENOUGH?

No, According to us the existing cashew market is not attractive as there are a lot of restrictions imposed by
the importers such as lead contamination, disposability, recyclability and also it was not safe for the users. If
this continues then the importers will stop importing and would prefer other countries instead. This shows
that for existing players this has become a very important issue to handle immediately. But there is scope for
new players to come up with new packaging. That may help in getting the upper hand on existing market
players. Any new innovation could open up a new market in this arena. They should view the problems
expressed by the importers closely and change the strategies according to that. And ensure the packaging
doesn’t exceed the cost of investment. With increasing Cashew kernel exports Cashew packaging market is
growing and it has become difficult to maintain the standards expected by the importers. Hence, gradual
changes in the problems mentioned will help them to sustain in the market.
The cost benefit analysis has to be rationalized. Brazil has been a tough competitor in the market with rise in
the Cashew kernel exports around the world.
3) WHAT ARE STAKES OF DIFFERENT STAKEHOLDERS IN CASHEW PACKAGING?

In the Cashew packaging , the stakes of different stakeholders are mentioned below:
• Exporter: As the importer demanded of an alternative packaging which should be implemented within a short
time period so they should develop a different type of packaging with same cost as purchasing a tin. But if the
alternative packaging is not implemented then they will be in a brisk of losing the business to their competitors.
• Tin manufacturers: The manufacturer of the tin can have more adverse effect if they don’t comply with the
Importers demand. As the new packaging methods can disrupt the existing tin manufacturing method it can also
affect the investments which are made for it and new packaging can ruin their businesses
• Government (Home country): Since cashew kernels are predominantly among India’s agricultural commodity
exports the cashew exports were increased but the share of total exports in India in total world exports was
decreasing which will have an effect on its revenues.
• Importers: Importers have a maximum share relatively as they impose stringent rules and norms/regulations to
be complied in order to procure superior quality of Cashews. They are benefitted by getting the superior quality
at a similar price.
• Marketing Agents: Marketing agents acts as the middlemen in delivering the cashews from the manufacturer to
the customer. As the trading process of the processors is undertaken by the agents who forthright purchases
from the processors which can be based on future contracts or in one time spot transactions or both, so the
incentives they get for doing it so adds a better value by processing and better packaging of cashew kernels will
give them a good commission ahead.
• Cashew producers: Following the increase of imports of cashews comparing to the indigenous productions and
the reason is due to the unorganised market for cashews in India and switching cost might not fluctuate much as
the revenues for cashews at that times weren’t great
• Consumers: Consumers of cashews has stakes has consuming can be encouraged if the imports of the host
country is encouraged due to the new packaging methods
4.WHAT SHOULD BE THE MARKETING STRATEGY FOR THEIR NEW PACK?

TCI can implement the 4P’s in knowing the benefits of the BIB (Bag in Box). The implementation of 4P’s as a
marketing strategy are as follows:
• Product- The BIB is made from Aluminium and HDPE(high density poly ethelyn) and is convenient to use it
is more tamper proof and hygienic as well but it was just used for the packaging of edible oils.
• Price- The BIB packaging costs a lot cheaper than tin containers and has other benefits as well. The advantage
of HDPE is that it does not contain any harmful chemicals like lead and is smell proof which does not attract
rats.
• Promotion- TCI should show the association of cashew exports and CCPE and explain how the board is
matching to the standards set by the importers this will help in creating awareness of the usage.
• Place- The location is to be chosen where more exports of cashews takes place for example- United States,
Netherland, UK etc and should look into the strategies adopted by the Brazil market.