"We will be producing writing and printing paper, otherwise our main focus will be on Newsprint itself": CMD-NEPA

"We will be producing writing and printing paper, otherwise our main focus will be on Newsprint itself": CMD-NEPA

NEPA will sell paper both in ream and as well as in roll sizes as per market demand | NEPA has a plan to achieve an annual turnover between Rs. 450 to 500 Cr. For FY- 21-22 

Recently, The Pulp and Paper Times got the opportunity to interact with Cmde Saurav Deb, CMD at NEPA about the new beginning of NEPA after revival, in the paper market. The ups and down of NEPA's mill revival plan and how it is accepting the current paper market challenges? Here is his full interview:

Q: Please share Nepa’s Revival Mill Development Plan for our readers

A: The Revival Mill Development Plan (RMDP) was conceptualized in 2008.The administrative approval on RMDP was accorded by GoI in September 2012 with a direction get the revival scheme sanctioned from the Board of Industrial and Financial Reconstruction(BIFR) agency. BIFR sanctioned the revival scheme of Nepa Ltd in March 2014 with the Environment Clearance and Consent to Expands Certificate/ permission which was received by Nov 2015 and Feb 2016 respectively.

With the initial funding, RMDP project commenced with procurement and installation of a  new 300 TPD De Inking plant(DIP) the major part of the modernization plan, refurbishment of both paper machines( one of 1940’s and the second one of 1960’s vintage), renovation of 12.27 MW Captive Power Plant(CPP), installation of new ETP  with refurbishment of 132 KV Substation as well. On the completion of RMDP, Nepa Ltd will increase the production capacity to 100000 MTPA from 88000 MTPA with Newsprint of 53-57 % ISO brightness and Writing & Printing paper of 73-75 % ISO brightness.

Entire DIP line (make M/s ANDRITZ) has been fully installed with  dry and wet trials at an advanced stage. We expect to finish the trials of the systems and equipment by the end of June 2021. Braving the two waves of COVID like anyone else in the country, it did affect the overall schedule of the project though we are trying our best with a robust catchup plan to complete it at the earliest. Also being in Nepa Nagar, which is at a remote location, availability of man and material has been extremely challenging in these trying times.

Modernization of 12.27 MW CPP  is also nearing completion. To monitor air pollution on- line Continuous Stack Emission Monitoring System (CSEMS) is also being installed along with Fly Ash collection and disposal systems. 132 KV Substation has been already commissioned to take power from MPSEB. Hydraulic test of boiler already completed and other trials are expected to be completed by end June 2021. 

Coming to ETP, which is a new state-of-the-art technology to meet the zero liquid discharge which will have real time Continuous Effluent Monitoring System (CEMS). Works of ETP has been completed up to 95% and sectional trials have already started. 

Coming to heart of Paper Mills i.e. Paper Machines, we have got two Paper Machines, PM1, which was set up in 1947 & commissioned in 1956, and PM2  was commissioned in 1969. Our aim is to produce 300 tons-per-day (TPD), RMDP have increased mill’s capacity from 88000 TPA to 1,00,000 TPA. 

This is near about complete information about the project. I must put it on record that initial planning did take time,  the project is in nearing completion.  I must thank to Government of India for providing absolute support towards each and every nuances of the project including the manpower of Nepa Ltd. If the COVID pandemic wouldn’t have been hitting us so hard, we should have commenced production by now. 

After completion of initial trials, we expect mill to be operational by end July 2021,/early Aug. 21. During this period of operation, we will synchronize and adjust technical hiccups. We expect the plant to be operational commercially by August 2021 end.

Q: What will be the grade of paper and GSM range, NEPA is going to manufacture?

A: On completion of RMDP we will be manufacturing both newsprint and writing and printing paper (WPP). WPP and Newsprint would be having brightness ISO 72 to 75 % and 53 to 57 % respectively. Raw material for paper manufacturing will be various grades of waste paper. In Newsprint segment, we will produce 42 to 44 GSM range and in WPP, the GSM would be 60 to 80 as per our plan.

Q: NEPA was known for a prominent newsprint manufacturer, now it has diverted its attention to Writing & Printing paper grade also, what factors do you think are working behind this change? 

A: It is not a change; we want to diversify once we get a modernized plant. Newsprint is still a ‘bread n better’ for us and WPP is addition to that. Depending on market demand we will be producing writing and printing paper, otherwise our main focus will be on Newsprint itself.

Covid-19 pandemic has reduced 35-40 % paper demand in newsprint and WPP also leaving immeasurable dents on the economy, consumption behaviour, industries and social life as well. For sustainable production we will reconceptualize our business model and product in due course on completion of RMDP project.

Rising literacy rate, universalization of education through legislative steps like Right to education, Sarva Shiksha Abhiyan, mid Day Meal Schemes etc have increased spending on education by both Centre and State Governments. Per capita paper consumption in India is around 13-14 kgs and still low vis-a–vis developed countries which is hovering around 200-450 kg per capita. This segment is still growing at a CAGR of 6.2%. WPP segment forms 30% demand of domestic paper market but now demand seems to have narrowed substantially for time being on the back of Covid-19 pandemic. I am sure as the consumption pattern takes an upswing, demand will soon pick up in India, being one of the fastest growing economies in the world and will continue move vertically up to 2030.   

Q:  In the Writing & Printing segment, there have been big players in the market already, how NEPA is planning to combat the competition? Will Nepa serve to Government sector only?

A: It’s not only the Government sector,we will be going into the market definitely. I can assure you that we have a legacy and name behind us and we have to live up to that name. Competition is always welcome which makes everyone improve upon their own performance. It’s good that we have such a wide variety of choices in writing and printing paper produced by market’s major players. Definitely, it is a huge opportunity for us to improve upon our performance, and in case, we find the opportunity in Kraft paper segment; we would like to venture in its production as well.  There are quite a few challenges and as I have mentioned that Government has been supporting us and we must live up to the expectation of not only the Government but also of the people of India.

Q: What are the parameters NEPA is going to improve by applying the latest technology?

A : Post refurbishment paper production would have state of the art technology in DIP, Paper Machines using DCS & QCS and other automation logics integrated in back and front end of pulp & paper processing and steam & condensate loops. This will certainly enable us, not only for sustainable production, in optimization of process controls but also in standardisation of products specifications as per demand.

Strategically, we will go for low GSM, with higher brightness, and better printability, runnability & formation parameters, for which market is looking towards Nepa. Nepa was pioneer and launched 42 GSM News Paper in Indian market. Given higher input material cost, higher energy cost, lower margins due to supply and demand mismatch, the scale of economy and scope of economy appears to be road map for revival journey. 

Q: what is the planning of NEPA to sell the paper, will paper be sold in bulk form or Ream (A4 Copier sheet) form? 

A:  For newsprints, Nepa will follow the legacy patterns of paper selling already set in Indian Market and parallely register itself on Government e-market portal as well to sell Newsprint & WPP both. In addition, we will also explore other avenues to export as well. Yes, NEPA will sell paper both in ream and as well as in roll sizes as per market demand.

Q. When NEPA is going to launch A4 Copier paper in retail segment?

A: We will register Nepa Ltd at Government’s E- Market place as a seller in this segment. We will also have a marketing team which we are building up in Mumbai, Delhi, Kolkata and Bhopal and also focus on other state capitals as well. We will engage the distributors in these major cities for our sales. Further, down the line networks for retailing will be established in parallel once we are able to attain post RMDP performance guarantees.

Q: How do you analyze the current market situation? where demand for Writing and Printing paper has dropped almost 60 percent. What is the demand growth you are expecting post-pandemic?

A: Absolutely true. As per latest Government data, direct and indirect tax collections have surpassed Rs. 1.3-1.4 lakhs Crores since last 3 months which is a very positive indication how economy is unfolding. Moreover, In view of substantial reduction in the second wave of Coronavirus,  we are very optimistic that institutions including educational and market are expected to open up soon. Our team at NEPA is expecting that market condition should get momentum by Q3 of FY 21-22 and demand will pick up, as the offices and school should resume again. We have our strategic plans in place for a smooth run of the plant.

Q: What is the total investment in RMDP?

A: The total project cost is Rs. 434 Cr.

Q: Nowadays, Kraft or Packaging paper is in much demand, and many big players like Trident, Khanna Paper and Shree Rama Newsprint are also trying to enter into Kraft paper production, what is NEPA’s stand on this market scenario?

A:  In fact, we have a strategic plan for production of Kraft paper in NEPA. Initially, we will review the market response, how market is receiving NEPA’s products. If, we find market is less responsive for newsprint and Writing and Printing paper, we would like switch over to Kraft paper production.  Our PM-2 is well suited to produce Kraft paper which can produce Kraft paper up to 60 to 120 GSM range.

Q: Any estimation of the turnover target in FY- 21-22

A: Based on the present market condition, NEPA has a plan to achieve an annual turnover between Rs. 450 to 500 Cr. Though the project completion faced challenges due to the present pandemic   I am quite optimistic with support of project team, vendors, PMC and employees of Neap Ltd, saleable production will be resumed at the earliest and lost business opportunity would be covered in the coming quarters of FY-21-22.  

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