Orient Paper to reduce its dependency on imported pulp; targeting to commission pulping capacity of 1,00,000 TPA

                     

Orient Paper to reduce its dependency on imported pulp; targeting to commission pulping capacity of 1,00,000 TPA 

OPIL moderated its raw material furnish mix and optimized the sourcing pattern to bring down the raw material cost

Kolkata | 2 November 2021 | The Pulp and Paper Times:

The year 2020-21 was marked by an erosion in consumer sentiment following the outbreak of the pandemic. Amid to this, one of the most respected writing & printing paper and tissue paper producers in India, Orient Paper & Industries Limited (OPIL) registered a decline in volumes and posed loss for fy 20-21.

Mr CK Birla, Chairman of OPIL says in the annual report of the company for FY 20-21 that, “The year 2020-21 was marked by an erosion in consumer sentiment following the outbreak of the pandemic. As consumers were locked into their homes, there was a decline in volumes and realisations for paper and caustic soda. The combination of weaker volumes and value resulted in a temporary decline in our performance during the year under review”

“The contraction of the Indian economy had an adverse impact on the fortunes of the paper industry. The closure of commercial offices as well as the inability of consumers to buy whenever they desired had an impact on the offtake of paper during the year. Besides, the closure of educational institutions and commercial offices affected the performance of the writing & printing segment in terms of the offtake volume and selling prices,” said Mr ML Pachisia, Managing Director at OPIL in the report.

Mr. Pachisia further says that being a capital-intensive business, the erosion in realisations of mature products used in everyday lives affected OPIL’s profitability and it reported a loss of Rs 46.55 cr during the year under review compared with a profit of Rs 19.93 cr in FY 2019-20.

He informed the share holders that the writing & printing segment, which represented 55% of our total paper volumes in the last financial year, recorded a drop of over 33% in revenues in 2020-21 compared to the previous year. The tissue paper segment was also affected, although to a lower extent, due to a shutdown of the hospitality sector and adoption of work-from-home practice by most companies Although the export markets could plug the shortfall that arose in the domestic market, international realizations were lower due to increased competition. The caustic soda business also suffered following lower capacity utilization by the major consuming industries. The consequent oversupply moderated realisations for caustic soda as well.

OPIL moderated its raw material furnish mix and optimized the sourcing pattern to bring down the raw material cost without compromising the quality of our products. Several new products were developed like Carrier Tissue paper, leached wrappers GSM, High wet and dry strength tissue papers.

The result of the second surge is likely to affect the performance of the OPIL in the first quarter of the current financial year. By the close of the first quarter of FY 2021-22, new COVID-19 infection cases had begun trending down. The increasing incidence of vaccination is inspiring the hope that the next infection surge (if at all) will be muted on account of the accelerating vaccinations.

OPIL is also in the process of increasing its pulping capacity which will reduce dependency on imported pulp and also provide a scope for increasing its paper capacity. The project which was put on hold for some time because of the pandemic but has since been cleared and is making good progress.

Mr.CK Birla said that, we reaffirmed our commitment to the industry by pressing ahead with our pulping capacity enhancement project. Despite the setbacks caused by the pandemic, we are targeting to commission the project by the close of this financial year.

“Before the impact of the pandemic, OPIL had announced a decision to implement an upgradation plan comprising a 600 TPD dry solids capacity recovery boiler, a 7-effect 150 TPH evaporator, upgradation of a causticizing plant, and installation of ECF bleaching capacity, balanced with a pulp plant to achieve a pulping capacity of 100,000 tons per year,”

“Due to the restrictions imposed by the pandemic, the project was put on hold from April 2020 until January 2021. Construction commenced in the last quarter of the last financial year and the project is on track to be commissioned in the last quarter of the current financial year” Mr. Pachisia informed.

Performance for 2020-21

As a result of the challenges faced during the year, our turnover for the year was lower at Rs. 443.36 crores compared to Rs. 600.56 crores last year OPIL net profit after tax was also negative at (-) Rs. 46.55 crores this year. OPIL invested Rs. 19.07 crores on capital projects during the year.

New Product Development:

➢ OP-80 gsm water mark paper manufactured at main machine. This is first time we manufactured Water mark paper in higher than 70 gsm – A new product development to enrich the OPM product basket.

➢ OP-100 gsm bleached wrapper paper manufactured on main machine which is further utilized for self-use.

➢ OP-115 gsm paper manufactured at main machine – A new product development to enrich the OPM product basket

➢ Carrier Tissue paper developed at Tissue # 02 and paper sent to market for trial purpose.

                     

Web Title: Orient Paper to reduce its dependency on imported pulp targeting to commission pulping capacity of 1 00 000 TPA