Final Project7

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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.VIKASFACULTY, MAIMS

SUBMITTED BY:Mr. AASHISH VERMA

ENROL.NO. (BBA (GEN) 3RD SEM-“B”)

MAHARAJA AGRASEN INSTITUTE OF MANAGEMENTSTUDIES

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

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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

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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 CONTENTSTABLE OF CONTENTS

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

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

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

Chapter-1Chapter-1 Introduction1.1 Purpose of the study 71.2 Objective/Misson 8

Chapter 2 Research Methodology 13

Chapter 3 Company profile 173.1 History 18

Chapter 4 4 P’S 22

Chapter 5 MOSER BAER – SWOT ANALYSIS 50

Awards 72

Conclusions 74

Limitations 75

Bibliography 76

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CHAPTER 1

INTRODUCTION

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Purpose of Study

Moser Baer was set up in 1983 by Deepak Puri to manufacturemagnetic media products. It started with manufacturing the 8inch floppy disc. As formats moved, the company has builtacross formats and moved from manufacturing 8 inch to the5.25 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 itthe largest player in India and third largest in the world. Over 80per cent of Moser Baer's production is exported to 82 countriesacross six continents and the company has strong tie-ups withall the major technology brands in the world. Today, thecompany is the fifth largest manufacturer of optical andmagnetic 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 MoserBaer has established itself as a dynamic Indian transnationalwith a strong focus on research and development, hassuccessfully developed cutting edge technologies for recordableoptical media, constantly innovating and introducing newproducts and processes.

Its goal has been simple and straightforward to be a dominantplayer in the global storage media arena. An emphasis on high

quality products and services has enabled Moser Baer to emergeas one of India's leading technology companies.

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Vision and Mission

Vision"Touching every life across the globe through high

technology products and services"

MissionWe 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, costleadership 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 goalwhich 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

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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

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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 responsiblefor 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

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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 anoverall 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).

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Bran

BRAND ARCHITECHTURE

14



Therefore the brand positioning is:

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

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CHAPTER 2

RESEARCHMETHODOLOGY

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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 determinewhether they fit the formulating hypothesis.

Objectives of research

The purpose of research is to discover answers to questionsthrough 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 :-

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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

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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

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Moserbaer Pvt. Ltd. from SECONDRY SOURCES like websites,

books, newspapers .

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CHAPTER 3

COMPANYPROFILE

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HISTORY

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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

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CHAPTER 3

4 P’S

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The 4 P’s

Product

Price

Place

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Promotion

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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

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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 isthe 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

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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.

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Specifications

Format Orange Book (Part II) and ISO 9660RecordingCapacity

650 MB ( 700 MB also available )

Recording Time74 minutes ( 80 minutes alsoavailable )

Unrecorded Groove reflectivity > 70%Radial Contrast (typ.) 0.08Push Pull Amplitude 0.090Recorded

BLER average < 10 cps Jitter < 35 nsReflectivity (Rtop) > 65%I11 / Itop > 0.65I3 / Itop > 0.30Mechanical Radial Deviation + / - 0.3ºEccentricity < 60 umStability

Read Cycles > 10^6Projected 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. Ittranslates 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

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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

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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 rayand maintain data integrity without degradation in any way. Moser Baer Pro CD-Rs are

compatible with most conventional recording drives.

Capacity : 700 MB / 80 minSpeed : 2x-52xDisc

Diameter:

120 mm ± 0.3

mm

Thickness :1.14 + 0.06 /

-0.01 mmCentre Hole

Dia:

15 mm ± 0.05

mmRecording

Layer:

Pthalocyanine

DyeReflector

Layer

: Silver

Protective

Layer: UV Lacquer

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

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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.

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Capacity : 185 MB / 21 min

Speed :24x(Drive

dependent)Disc Diameter : 80 mm ± 0.3 mm

Thickness :1.14 + 0.06 / -0.01

mmCentre Hole Dia : 15 mm ± 0.05 mmDisc Material : PolycarbonateRecording Layer : PthalocyanineReflector Layer : SilverProtective Layer : UV Lacquer

Blu-ray Discs

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Visit BDA WebsiteMoser 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 th

format originators – Philips.

The discs are manufactured at its subsidiary OM&T (formerly Philips R&D) based in Europe and at it

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

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http://www.blu-raydisc.com/

http://www.om-t.net/



http://om-t.net/products-philips-blu-ray-test-disc.asp





http://om-t.net/products-philips-blu-ray-test-disc.asp



• “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

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http://www.moserbaer.com/blu-ray-discs-compatibility.asp





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 3,000wafers/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

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\

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.

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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

•

H

•

I

39

http://www.moserbaerconsumerproducts.com/mp3-players-mp-565.asp




•

R

•

H

•

P

•

U

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

PRICE40





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 adowntrend 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 thescenario 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



PLACEPlace 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 robust44



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 2003-04over 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 plansto 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 commercializethose 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) andit 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 3years.

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 veryspecialized 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 replicatorsin 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’sperformance 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 creative52



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

Strengths

Opportunities

1Lower cost (lowerdepreciation, 1

Most major brands arelooking

opportunities2 Geographical proximity to

key markets 2CD-Rs are explosiveemerging

opportunities

3

St

Engineering

3 Ind

58



rong f oc

us on R &

D and

ian

marketis

showing s

igns of

demand forCD-Rs

4A growing captive localmarket

5 Integrated manufacturing

6

Committedshareholders

59



We

ak nesses Threats1

High capital intensity

market 1

CD-R market is in over

supply

2As most of the productsare 2

Pricecompetition leadsto lower

growing very fast, theyneed to Marginconstantlyexpand

manufacturingcapacities

3 AntiDumping and a60





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 capacityof 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 aninvestment 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 CustomerSatisfaction 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 havesurpassed 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

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• 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: Nicheproducts 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 toincrease 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, thetemporary 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, wesaw 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

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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 millioncumulative 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





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) toRs 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 weresecured 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% inFY06. 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 inwhich 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 resourcebase, 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 availableto 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 inplace 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 survivesand 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 havebeen 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.

79



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 strongdemand 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 technologybase 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 thepotential 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

80



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 theneed 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:

81



Through long standing strategic partnerships with key

technology providers, including many of the leading global

companies at the forefront of new format development, we haveunfettered 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 theirbetter 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, MoserBaer 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 thecompany 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 - MoserBaer 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 protectionistmeasures 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 HRpolicies 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 enhanceemployee 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 EVACalculation

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

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Awards

2008

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

Golden Peacock Environmental Eco –Innovation Award 2008

2007

Golden Peacock Award for Occupational Health and Safety '07

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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2006

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

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

2005

Golden Peacock Award for Competence in Quality and Innovation

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

2004

Frost & Sullivan Awards for excellent Manufacturing Practices.

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

2003

Dataquest IT Man of the Year Award 2003 to Mr. Deepak Puri Managing

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

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Companies in 2003

2002

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

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

2001

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

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 o

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

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that Moserbaer Pvt. Ltd. is the among the top two medi

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

BOOKSMARKETING MANAGEMENT BY

PHILIP KOTLER

http://www.moserbaer.in/

http://www.moserbaerpv.in/

http://www.moserbaerhomevideo.com/

http://www.moserbaer.in/

http://www.moserbaerpv.in/

http://www.moserbaerhomevideo.com/

Final Project7

Documents