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Satia Industries to conduct trials on new Paper Machine from December; Reports YoY 53% growth in Q2 net profit

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Satia Industries to start trials on new machine

Satia Industries to conduct trials on new Paper Machine from December; Reports YoY 53% growth in Q2 net profit

Muktsar |13th Nov, 2021 | The Pulp and Paper Times:

One of the largest Wood and Agro-based paper manufacturers in India, Satia Industries Limited (SIL) has registered remarkable growth in its Q2 FY 21-22 net profit. SIL’s Net profit stood at INR 203.44 mn in Q2 FY22, compared to INR 132.60 mn in Q2 FY21.

“With the re-opening of the economy in Q2 FY22 post-Covid Lockdowns, SIL continues to receive regular orders from state textbook boards and open market. We have been able to record a further growth in SIL’s production level of 33,089.75 MT in Q2 FY22 as compared to the production of 30,780.61 MT in Q2 FY21. SIL’s sustained and healthy relationships with the State Textbook Board Corporations pan India has helped them secure orders at gross higher realization per ton,” said Mr.  Chirag Satia, Executive Director of Satia Industries Ltd. 

Informing about the SIL’s long-awaited expansion plan, Mr. Satia says, 4th Paper machine has been fully erected and production trials shall begin in first week of Dec 2021, and commercial operation will be started thereafter. Pulp mill, Soda recovery plant, Power generation plant along-with ETP have already been upgraded. Deinking plant too will start in this month only. Management is confident to get minimum three months additional production coming from this expansion in this financial year only.

Mr. Satia said in a statement that, we expect a sustained growth demand with the re-opening of schools & colleges across the nation and with economic activities resuming normalcy; in the second half of the year with higher realizations. We have a strong order book in hand of 60 days at attractive price realization. Our new production will come in this year only and we expect to get minimum one quarter additional production from the new Paper machine in this financial year.

SIL continued its efforts to diversify into new product line like wedding card base along with increasing the share of Cup stock base and Copier paper in its total production during the quarter.

In close association with Zume, a US-based global brand, engaged in producing and outsourcing of moulded table cutlery products SIL has completed mechanical trials and normal production should begin in Dec. 2021

“We are happy to report that we shall start commercial production of cutlery before the end of this calendar year and thereafter we also plan to scale up capacities in this segment. This segment is expected to generate attractive realizations and thereby enhance our overall margins.” Mr. Satia said.

SIL’s management looks forward to achieve over 1,50,000 tons of production this year and 50 – 60% increase in top line over the last year and at least 150 to 200 bps EBIDTA margin accretion in full year FY22 compared to the current margins of Q2FY22; driven by change in product mix and higher production.

SIL says in a statement that, wood pulp digester automation is being done at a cost of ₹ 60 crores to optimize steam consumption from present level of 1.6ton steam /ton of pulp to 0.6 ton steam/ton of pulp. Based on the present cost of steam @ 2000/ton; it will lead to saving of minimum 300 ton steam costing ₹ 6 lacs /day and 22 cr/yr. Besides saving steam consumption, it shortens the processing time thus leading to increase in capacity by almost 50%. Higher in-house wood pulp production will reduce dependence on imported pulp with substantial gains in cost and procurement risk minimization. SIL will be the second company to install this project in India. ROI for this project will be just 18 months.

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