Read the exclusive interview of Mr.Madhukar Mishra, Managing Director, Star Paper Mills Ltd., India conducted by The Pulp and Paper Times.
Govt. Should Subside The Bamboo Transport : Star Paper Mills Ltd.
Govt. Should Subside The Bamboo Transport : Star Paper Mills Ltd.
Saharanpur, Feb 10, 2018: Part of Duncan Goenka Group, Star Paper Mills Limited established in 1938, is an integrated Pulp and Paper Mill. Starting with 6000 MT/annum, it has come a long way and produced of 72000 MT in 2008-09. It produces a wide range of Industrial, Packaging and Cultural Papers catering to almost all segments of the Consumers. Star has a distribution network throughout the Country.
The Pulp and Paper Times visits Star Paper Mills and meet Mr. Madhukar Mishra to discuss the various paper industry issues as well the evaluation of Star Paper’s long journey in present scenario. Here is the Discussion:
Q.Indian Population is increasing 1.2% annually and per capita consumption of paper is increasing gradually, than why Indian Paper Mills are feeling unsecured about its paper market?
A.It is true that both population and per capita consumption of Paper are increasing steadily in India, which makes it one of the few growing Paper markets in the world. At the same time, there are many countries where demand is declining rendering their capacity surplus and manufacturers from those geographies are looking for markets.
In addition, India has entered into Free Trade Agreements with some Paper producing countries which too have surplus capacities.
Manufacturers in these countries, like Indonesia, have an advantage of access to low cost raw material and fuel. Indian Industry, therefore, is forced to compete on a non-level playing field. As a result, most of the demand growth is being captured by imports.
Indian Paper Industry has been representing to the Government since long and is hopeful that these issues will be resolved before it is too late.
Q.It has been 40% jump in star paper's share price since November last year. What has made it to jump?
A.Paper Industry went through a lean patch financially for a few years recently. Subsequently the share prices of the entire segment got re-rated as the Industry performance improved. Star's financial performance has also improved leading to share price increase.
Q.You have got a R & D lab recognized by the ministry of science and technology. What are the major outputs of this labs which are successfully implemented?
A.We have well equipped R&D Lab which contributes to optimization of product costs and development of new commercially viable products. In recent past we have reduced our chemical cost and introduced a number of new products .Lab is also involved in development of high yielding clones and exploration of new fiber yielding species.
Q.Star Paper Mills is an established company of year 1938 and Star Paper mill has seen various ups and down in Paper Market in 80 years of operation.
What was reason of that bad time if you faced and how did you recover your company?
A.Paper Industry is a cyclical Industry both on the demand side as well as raw material side. Generally, expansions in the Industry happen in a bunch when demand-supply balance is favourable. This leads to a glut for sometime and the cycle is repeated.
Same phenomena occurs in the raw material also. Whenever any of these cycles is in adverse phase, the Industry performance suffers. Last time, both these cycles were in adverse phase at the same time.
Star was able to withstand the adversity thanks to efforts of its team towards cost control coupled with support and confidence of other stake holders.
Q.Your idea of Social Forestry Program in year 1996 was a commendable initiative. If you evaluate your initiative this time, what gains do you see?
A.With a small beginning in 1996, Star rapidly ramped-up its social Forestry Programme and has been facilitating plantation of more wood than it consumes for the last several years. In 1996 Star and other wood based Mills in the area were almost completely dependent on allotment of wood from Government forests, at present the Industry almost entirely sources its requirements from farmers. Satellite images of the area show tremendous improvements in Green cover. It has also contributed to increase in rural incomes and provided a stable source of livelihood to people engaged in farming/harvesting and transportation.
Q.Indian Paper mills are kept in red category by The Central Pollution Control Board and Paper making process is executed on the sharp edge of norms but still Paper Making is not considered environment friendly in view of government. The recent order of UP government to shut down 50 paper mills in western UP to maintain the better water quality in Ganga river. How do you see this situation and Paper making in long term?
A.Paper Industry has been consistently improving its environmental performance. At the same time, Government has been making the norms more stringent. With a constructive dialogue with the Regulatory Authorities, Paper Industry has voluntarily implemented many improvements under the CREP Programmes. Star also implemented some of the measures even before the CREP Programmes. We believe that Industry should continue to strive for better environmental performance. At the same time, regulation should be keeping in mind Industry's size, technological and financial capabilities and with adequate time given to Industry to respond.
Q.Recently, in International Market, there has been price hike of various grade of paper. If paper prices increases continuously then it will generate the alternate market of Digital Books, Non-Paper Packing and other non paper product which will be threat to the paper making. How Indian paper Mills can ensure cheap and better quality paper products for its buyers?
A.Digital Books etc. are not significantly cheaper and people prefer to use digital or paper books for reasons other than price as well. Same thing applies to use of different packaging materials.
At the same time, the challenge on the cost front is very much there. Industry needs captive wood plantations on degraded lands and should have access to fuel at internationally competitive rates.
Q. What is new Star paper is planning in terms of Expansion, new technology or something new in the pipeline?
A.Star Paper intents to modernize some parts of its operations to reduce costs further.
Q. Would you like to elaborate your CSR activities?
A.STAR PAPER MILLS LTD; SAHARANPUR :CSR activities
Star is running / supporting primary and secondary schools as well as a Girls college up to PG level.
Has provided Solar based LED street lights in the near by villages and also contributed towards installation of complete solar system in a Sr. Higher secondary school in city.
Provide drinking water to nearby residential areas.
Support social activities conducted by city administration like winter shelter, mini Olympic games etc.
Organizing classes of sewing and stitching in near by villages for skill development to make the girls self - employed.
Organizing free Medical Checkup Health Camps. In past the company had constructed complete building of main hospital of City.
Q. Government has given wings to the Bamboo Sector through launching bamboo policy. Now Bamboo will not be considered as tree. What impact do you see with this bamboo policy in paper making, bamboo production and trading in long term?
A. It should provide boost to cultivation. However most Bamboo growing areas are away from consumption centers and Bamboo being lightweight incurs high freight. Govt should provide transport subsidy also. In the recent past Railways used to charge lower freight on Bamboo which was then increased
Q. Government has increased the 25% corporate tax bracket upto those companies having turnover of 250 cr. This prudent step will give more money to the companies. How do you see this tax reduction in company's expansion and development plans?
A. Star Paper being above the limit , is not eligible for this tax break. This tax break should also be extended to larger companies on the principal of one nation one tax.