BIC Cello bets big on the Indian stationery market

Smartphone and tablets may have replaced notebooks and pens for many but the stationery business is here to stay. French stationery maker BIC Cello is sure of it.

The company recently opened a new factory in Gujarat, its largest in Asia. The factory will manufacture products not just for India but for the international market as well.

“No matter what technology comes, ballpoint pens will not disappear,” says Peter Van Den Broeck, senior vice president, Middle East, Africa, India, BIC.

Broeck estimates the market for writing instruments is growing at 8-10% in India. “We choose India above China as hub for the Asian world. It is a very young growing population with a government dedicated to education,” said Broeck, who was in the country to announce the opening of the new factory near Vapi in Gujarat.

By 2020, India aims to achieve a 30% gross enrolment ratio – the number of students enrolled in a given level of education as a proportion of all those of the eligible official age.

“Education is an important business for us,” said Broeck, adding that office goers are the second largest users of writing instruments in India.

"The Gujarat factory will not only serve the domestic market but also the export markets. We have plans of expanding further," Broeck tells Fortune India.

The stationery maker has invested ₹300 crore in the factory, which employs 1500 people. The factory will act as an export hub for an array of stationery products including ballpoint pens, gel pens, and mechanical pencils. The company also has five factories in Daman and one in Haridwar.

The €2.1 billion BIC group entered India through a 40% stake in Cello Writing Instruments, the largest manufacturer and distributor of writing instruments owned by Mumbai-based Rathod family, in 2009. But, seeing the scope for growth in India, BIC raised the stake to 100% in 2015 and Cello was re-christened as ‘BIC Cello (India)’.

The company says it sells 5 million pens in the country every day. While pens priced lower than ₹10 have a larger share in value terms, in volume terms, the premium offerings – like permanent markers, highlighters, fountain pens – lead the net sales.

BIC Group spans across 160 countries and is listed on the Paris Stock Exchange. “India is around 10% of the stationary turnover and the net sale of stationary globally stands at €800 million,” Broeck says. BIC Group also sells lighters and shavers globally. In 2017, it clocked €2,041.4 million in sales.

The company also invests about 2% of overall net sales into research and development. A part of its spend on innovation is focussed on including digital element in its new writing instruments.

Some of its latest innovations show the investment bearing fruit. For instance, the Bic Cristal Stylus 2-in-1, a pen and lightweight stylus for capacitive touchscreen devices like tablets and smartphones.

Meanwhile, the company wants to become the preferred stationary brand for the Indian consumer.