Emami Paper intends to double its capacity in 3-5 years through brownfield expansion; focus on value-added & niche segment products

                     

Emami Paper intends to double its capacity in 3-5 years through brownfield expansion; focus on value-added & niche segment products

The Company intends to increase its reach to more retailers and converters. It also intends to realign and dedicate one of its Paper Machine to manufacture superior quality Kraft paper

Kolkata | 3rd September 2021 | The Pulp and Paper Times:

Emami Paper is known for its strong product portfolio management, best-in-class quality as well as innovation in products and services, and is confident of meeting customer expectations. The Company is one of the most respected brands within the segments of its presence in India. Over the years, Emami Paper has brought a differentiated capability to its brand by continuously upgrading its manufacturing facility and product diversification.

The Covid-19 pandemic broke out during the Q3 of 2019-20 and continues to wreak havoc across the globe by mutating into new strains and claiming millions as its victim. It ground the global market wheels and the socio-economic disaster that has followed in its wake will take years to mend.

“With the devastation sparing none, the fact that our industry would also be hit is a no brainer. The paper and paper board industry faced headwinds in the form of a sliding demand for writing & printing grade of paper and a crippled logistic chain that hobbled input supplies and customer reach-outs. The turnover of Emami Paper Mill declined by~20%. However, it was a credit to the Company and the strategy it had followed, that its profitability stayed protected. It grew~34% over the previous year. The protected profitability testifies the intrinsic robustness of our business model that makes it cycle neutral,” said Mr. Aditya V. Agarwal, Executive Chairman of Emami Paper Mills Ltd. in the annual report for FY 20-21

Mr. Vivek Chawla Whole-time Director & Chief Executive Officer at Emami Paper says that Concurrently, we also strengthened our product mix. Our Paper machines at Balasore with a combined production capacity of 1,40,000 TPA were realigned to manufacture kraft paper, superior grade writing and printing paper, and copier paper. We also manufactured superior grade newsprint paper for our existing clients from these machines. We successfully developed and manufactured regal and superfine 40 GSM paper which is used mainly by pharma companies as inserts in their boxes. Our Packaging Board machine with an installed capacity of 2,00,000 TPA and a deckle of 3.6m is capable of making various grades of high-end Coated packaging boards.

“Various initiatives by our R&D team related to pulper machine, rewinder machine, rotor machine section along with usage of indigenous cationic starch & oxidized starch and introduction of clean water into DAF for clarification purpose resulted in savings of our input cost and energy consumption, while, at the same time, improving the quality of paper and paperboard. We also initiated various energy conservation measures mainly at cooling towers, secondary fibre treatment plants, and ETP which resulted in a substantial saving of power usage, “The paperboard segment lifted our morale and we achieved a total revenue of INR 1,236.58 crores. Despite the increase in prices of raw materials such as waste paper, pulp, chemical, dyes and coal, our steps towards cost optimisation led to an improvement in the Net Profit margin to 4.20% and Return on Net Worth stood at 8.75%. We also pared our debt burden significantly” Mr. Chawla informed.

The report further mentions that Emami Paper believes that quality doesn't start and stop with the product. It starts with us, runs through the shop-floor and stops at the doorstep of the customer. Quality is not limited to the products we manufacture, but it is reflected in the manner we handle every aspect of our business. We ensure superlative quality control through continuous monitoring and standardized practices at our manufacturing sites. Our quality control is created over a span of several years and is based on an international framework and benchmarks.

Emami Paper’s products are FSC certified. A testimony of its product superiority can be derived from the fact that it remains one of the few companies in India with the ability to manufacture low GSM kraft paper which is used by the packaging industry.

Mr. Vivek Chawla discloses Emami Paper’s outlook for the future and says, Looking forward, we expect to double our capacity in 3-5 years through brownfield expansion. We have a broader product offering and a wider geographical reach. Our entrepreneurial spirit and a very competent team will enable us to achieve the desired corporate goals. We know our job is to create value for all our stakeholders. We are honored to have that opportunity, and we look forward to a prosperous future together.

The Company intends to increase its reach to more retailers and converters. It also intends to realign and dedicate one of its Paper Machine to manufacture superior quality Kraft paper. The Company also intends to enhance its focus on value-added, niche segment products, and create value at the customer's place.

During 2020-21, the Company exported ~ 9,600 MT of Kraft paper to South-East Asian countries. It also exported around 60,000 MT of Packaging Boards to different countries and has established itself as a premium grade finest quality board manufacturer.

Emami Paper has incorporated flexibility in paper machines to manufacture value-added writing and printing paper. The Company is now having the flexibility to manufacture premium grade kraft papers newsprint and writing & printing paper on all paper machines up to 1,60,000 TPA capacity. “Our Packaging Board Plant with an installed capacity of 2,00,000 TPA Manufactures Consumer packaging board of recycling grade as well as that of virgin grade. Emami’s diversification into the paperboard segment is now the most discussed success story in the paper industry because of the tremendous performance of its board machine, appreciated market acceptance of the company’s Paperboard” Mr. Chawla said.

PERFORMANCE HIGHLIGHT

Despite the above multi prolonged challenges, Emami Paper had achieved relatively good performance during the financial year 2020-21 by achieving a Revenue of INR 1,236.58 crores as against INR1,519.14 crores for 2019-20. During the year under review, Profit after Tax (PAT) stood at INR 51.06 crores against a loss of INR10.45 crores in the immediately preceding financial year. The Company is continuously focusing on improving operating efficiencies and reducing manufacturing costs with increased production for better financial performance.

Continuing with the system of benchmarking the manufacturing processes against industry best practices, up-gradation of real-time quality assurance systems and induction of state-of-the-art technology for its products in writing & printing and packaging board variants were carried out during the year and achieved higher levels of productivity and product excellence.

The Report stated that the state-of-the-art manufacturing facilities along with market leadership in value-added paperboards, writing & printing paper and newsprint, world-class product quality, established supply chain system strategically positions your company to further enhance its leadership status in the Indian Paperboard and Paper Industry in the coming years.

                     

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