TNPL will focus on increasing its market share in Virgin Fiber grades; Intends to strengthen the dealer network

Chennai | 28th October 2021 | The Pulp and Paper Times:

During the year Indian Paper Industry was under severe stress due to Covid pandemic resulting in poor market conditions and drop in prices. Despite this Tamil Nadu Newsprint and Papers Limited (TNPL)  has achieved better levels of operation and effectively contained the losses in adverse situation. The management had undertaken effective measures to contain costs and achieve sales to the possible extent during the year.

Due to poor market demand for writing and Printing paper and drop in prices, TNPL is all set to undergo major change in its product mix, “With the expected commissioning of Pulp Mill at Unit II during this year, the product mix of the packaging board business is likely to undergo a major change,” said Dr Rajeev Ranjan, lAS Chairman and Managing Director at TNPL in the annual report for the year FY 20-21

Mr. Rajeev informed that TNPL will focus on increasing its market share in the higher value-adding Virgin Fiber Boards business which includes Cup Stocks. In-house pulp will provide TNPL an input cost advantage as well as consistency in raw material quality. Active efforts are being made to shift the product mix towards Virgin Fiber grades of packaging boards like Folding Box Boards, SBS Boards, Cup Stock and other speciality grades. Distribution strengths are being further strengthened and additional customers are being mapped. TNPL is planning a major re-entry into the cup stock market and focusing on developing new products to utilize the additional pulp from the new pulp mill.

Efforts are being put to improve quality and optimize costs. TNPL is working toward strengthening the dealer network by appointing dealers in unrepresented markets and also reinforcing the dealer network in existing markets. The report stated that better credit control measures are being put in place and Information Technology is being leveraged to provide better and faster inputs to the distribution network.

“The sales momentum of Q4 – last year continued till mid April 2021. With the second wave of Covid hitting from the beginning of this year, the market seems to be slowing down once again. Lockdowns and closure of educational institutions have led to orders being put on hold. However, with the rapid pace of vaccinations it is expected that the situation will stabilize soon. Reopening of Offices, Educational institutions and courts will lead to regularization of demand. The international prices of pulp and paper continue to be firm which should keep imports in check. Overall, the year should be positive for the company,” Report further said.

TNPL has proposed to implement the project in two phases as below:

• Under Phase 1, the HWP line with a capacity of 140,000 MT per annum with the following

scope shall be set up 

• Under Phase 2, the Paper Machine of 165,000 MT/annum along with a Power plant shall be implemented following commissioning of Phase 1.

The Phase 1 of the project will feature installation of a state-of-art chemical hardwood pulping along with chemical recovery facility and augmentation of service utilities viz., Captive power plant and Wastewater treatment plant. The financial closure of Phase 1 of the project was achieved in October 2019. By February 2020, TNPL completed ordering of all the major, long delivery plant and machineries like Hardwood Pulp Mill, Chemical Recovery Boiler, Black liquor Evaporator, 20 MW Turbo Generator, Air Cooled Condenser, Lime Kiln, Recausticizing plant, etc.

PERFORMANCE HIGHLIGHTS OF THE YEAR 

a. Operations

1. The Company’s turnover during the year 2020-21 is INR 2,768.18 crore

2. Loss before tax is INR (98.69) crore and Loss after tax INR (65.11) crore.

Printing and Writing Paper

3. During the year the Paper production was 3,23,588 MT.

4. Achieved Paper sales of 2,95,644 MT during the FY 2020-21.Domestic Sales accounts for 76% and Exports at 24%.

Packaging Paper Board

5. The packaging paper board plant production was 1,71,711 MT during the financial year 2020-21, equivalent to 86% of capacity.

6. The packaging paper board sales during the year 2019-20 was 1,73,810 MT. Domestic Sales accounts for 94% and exports at 6%.

7. 2,74,142 tonnes of Hardwood, chemical Bagasse Pulp and Deinked Pulp were produced during the year.

Sustainability in Pulpwood Procurement

The company achieved the goal of Sustainability in pulpwood sourcing for 2020-21 financial year by procuring pulpwood directly from farmers without dependence on open market sources. The company has procured 4,38,029 MT of debarked pulpwood during the year, in which 1,76,511 MT from Government Sources (TAFCORN, Farm Forestry & Division Areas) and balance 2,61,518 MT directly from farmers field, in which 40% is Casuarina pulpwood and 60% is Eucalyptus pulpwood. From 2009, the company has procured 1.80 million tonnes of pulpwood directly from farmers without any intermediary under plantation schemes. The maximum pulpwood requirement is met from the districts where the plantation schemes are implemented i.e., Ariyalur, Pudukottai, Viluppuram, Cuddalore, Sivagangai, Karur and Trichy.

Marketing Management at Unit-I

The increasing use of electronic media for communication and learning is leading to a slowdown in the growth of paper consumption for writing and printing. Covid-19 has unleashed major changes like – work from home and distance learning. Some of these changes are irreversible and are likely to impact the usage of paper going forward. However, with a large and growing young population, the need for textbooks and notebooks is expected to continue.

                     

Consumption growth rates in this segment will slow down. The company is focusing on industrial usages of paper and further diversifying the product mix.

TNPL is built on the concept that environment should be protected for the benefit of present and future generations. TNPL has perfected the technology of manufacturing writing and printing paper from bagasse, an agricultural residue and consumes one million tons of bagasse per annum.