Value-added coatings on Kraft will play a huge role along with quality paper in the future: SKPMIL

“Value-added coatings on Kraft will play a huge role along with quality paper in the future.” - Mr. Pasari

Shree Krishna Paper Mills & Industries Ltd. (SKPMIL) was established in the late 70s.  The paper division was set up in the year 2004 and since then, SKPMIL has been using recycled fiber and virgin pulp to manufacture several varieties of industrial and specialty papers including newsprint, electrical insulation kraft paper, interleaving kraft paper, colour kraft paper and absorbent kraft paper.  The company recently entered in the packaging sector with kraft paper for carry bags. 

Shree Krishna Paper Mills: A leading base paper producer for Film Faced plywood manufacturing We saw an opportunity here as we realise that construction activity will increase in a developing economy like India.

In the 1990’s it was the only company in India to manufacture thermal-sensitive paper. Thermal sensitive papers are used at the point of sales, ATM roles, credit card receipts, etc. 
The company believes in spending large sums of money in R&D and create in-house technologies of producing papers with our own recipe and blend of chemicals and Raw materials, pulp etc. 

Following the company ethics, SKPMIL developed our own in-house technology, we have never copied any raw materials or chemicals, or techniques from other mills. The company launched in shuttering base paper in the year 2011 using its own technology.

The Pulp and Paper Times got the opportunity to interact with Mr. Naynesh Pasari, Director at SKPMIL, he shares his views on current market situation and possible long term trends in Kraft Paper segment. Here is the full interview:

December 2021 | The Pulp and Paper Times:

The second wave of COVID has been over, how do you assess the buying response from the Indian and overseas markets?

Uncertainty has hit everyone after covid. No one is aware of what will happen tomorrow, as the world has completely changed the way it works post covid. Consumption pattern has changed, due to mindset of people, savings have become non-existent as generally, we all have realised that life has no certainty hence spending has increased. Work and business is become more difficult as liquidity in the markets have evaporated. Businesses now have a short term view now instead of the earlier long-term view post covid. 
 
Post Covid, the E-Commerce boom has emerged out vastly in India, do you think it’s a short period ‘bubble’ or will sustain for a longer time? Please explain

Markets evolve and the change remains in existence for at least 3 decades. For example, newsprint become prevalent in early 80s when markets opened and newspapers wanted superior quality paper from across the world. Consumption increased. Then due to the digital world, behaviour of people changed and newspapers printing and ads reduced drastically. The change after covid has accelerated but overall post-2010’s the pattern is changing. The same trend was visible with Thermal paper that my father introduced in India in the 1990’s. SKPM was the first to introduce this grade in India. If you look at thermal paper now post the digital world, such as tolls being fast tag, and payments now being PayTM and online the industry has dropped from a rising trend.

Hence I believe that high strength Kraft paper for E-commerce is here to stay for at least until 2040’s after which there may be a lot of changes in consumption pattern, mind set of consumers and innovations in packaging used. 
 
SKPMIL is also manufacture of décor paper, recently the Directorate General of Trade Remedies (DGTR) has recommended anti-dumping duty on decor paper imports from China between $110 per MT to $542 MT. How do you analyze this step of DGTR?  Do you think this duty imposition will save the domestic manufacturers in the long term?
 
We believe the Indian government is not doing enough for the ‘make in India' tagline. It applies to many industries, paper being one of them. We should practice what we preach and if the government wants domestic industries to flourish then why is cheap imports allowed from the world into India. The same is true for many papers, thermal, newsprint, decor and so on. 
 
Big paper mills are also diverting their production line to kraft paper manufacturing from writing and printing, what is the reason behind it – higher price realization in Kraft or sustainability in the Kraft paper market?
 
The packaging industry in India is growing rapidly and it is spanning across various end-user segments such as food and beverages, healthcare, hygiene, and home care, among others.  Strong favourable demographics aside, factors such as growing disposable income levels, increasing consumer awareness and demand for processed food and the multinational giants taking rapid strides in the food, beverages, e-commerce and pharmaceuticals space are the key drivers impacting the growth of paper and paper board packaging industry.  
 
Necessity is the mother of all inventions. When mills had no orders, they all had to diversify. We developed print base laminated paper due to the same reason. Similarly Kraft paper is a market of the future and it is rather important for mills now to participate in the market as it is our responsibility as mill owners to service the needs of the consumers in India, specially when India is now looked as the first preference country for production and conversion after China’s Covid situation. 
 
What new trends you may predict in packaging paper segments?
 
“If behind every successful man is a women, then behind every successful product is it’s packaging”. - Naynesh Pasari

So important and inevitable is for a product.

In packaging, the future will be developing high tear factor packaging papers with value-added solutions.  I feel the industry will change from using burst factor terms to tear factor terms, having high tear is more important than having high BF. The demand is eventually drives by convenience now.  Today we shop for convenience - not for need. We sit and order food, clothes, electronics, heavy furniture practically everything under the roof with convenience. Hence the entire eco system is dependent on the factor of our convenience being met by service and product. Value added coatings on Kraft will play a huge role along with quality paper in the future. 

Being a paper trader also, the procurement of imported waste paper (OCC) is becoming an issue for the domestic paper industry, prices are going up and lots of new capacities in Europe and America are ready to start in a few days. How do you assess the waste paper crisis? Do you think the price of Imported OCC will increase further like it is currently around $330 MT?

I think the reply will be similar to what we have all heard over the years. India being a fibre deficient country - we are always dependent on fibre from other countries. When we collect and recycle waste in India - we are recycling what is already manufactured from recycled fibre. This is where the distinction lies. When we import from abroad, we recycle what is predominately virgin fibre hence the quality of finished paper is dependent on fibre used to manufacture it. I see India maturing as a market in the next 5-7 years with mills realizing that only dependence on imported fibre is not a long term solution, hence we will see organised players entering the market for domestic waste who will provide better fibre at fair prices, which is extremely critical to keep the imported demand and prices at bay. 

Recently European Union puts an accidental ban on waste paper export to India...What impact do you see on the recovered paper supply chain in the future?

The impact is already seen as there is shortage of fibre and this has added to the challenge. The critical factor is shipping freight and availability of containers even after markets open. I think its high time the shipping lines get back to the ground from the sky and bring back normalcy in business from the super natural profits they are earning post covid. 
 
SKPMIL is a prominent manufacturer of specialty paper, what are the new market perspective emerging outpost covid for this segment? What will be the growth anticipation you see in the next two years?

No Comments
The demand for writing and printing paper is still to recover, any suggestion for paper manufacturers.

Its a learning phase for everyone and I think I would like to learn from others how to predict the market in future. It's the survival of the fittest now and we must catch up with finding our own niche. We at SKPM have taken the road of speciality paper, while there are opportunities available for other grades too. But I feel one has to decide the game they will play and stick with it- I believe being determined in any particular game always gives back returns at some stage. 
 
Any expansion in your current product portfolio or in production capacity, you are planning? please share.

We have invested a lot of money in R&D for food-grade packaging papers, the future is the development of high-strength papers with lower grammage. Paper is an industry which requires continuous investment and expansion in upgradation of technology. 

Any other comments for readers about the paper industry.

The company’s prime objective is to satisfy consumers with the best quality giving them the best service. SKPM does not believe in turnovers, profits etc. getting repeat orders  from consumers are the biggest achievements of SKPMIL, 

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