Andhra Paper developed Barrier Coated product, committed for capital expenditure to revamp and upgrade plants

Andhra Paper developed Barrier Coated product, committed for capital expenditure to revamp and upgrade plants

- APL was able to use its strength in changing product mix across machines to meet the need of the hour as per the Customer preferences
- Andhra Paper took timely initiatives on new product development and launched niche products, Carry Bag and Straw Paper during the year.
- The Company achieved the highest-ever sales in a year at 2,50,238 Tons (YoY 4%) with Zero Stock at the close of the year for second consecutive year.
- APL began producing value-added products, including Cup stock, Pharma Print and Hi BF Virgin Kraft

- net profit of INR 522 crores in FY 22-23

Rajahmundry | The Pulp and Paper Times

Andhra Paper Limited (APL) is one of the country’s leading manufacturers of paper and pulp. Since our inception in 1964, APL has earned a reputation for producing a diverse range of high-quality specialty grade products, including writing and printing paper and Paper boards.

Favourable market conditions and buoyancy in paper market throughout the year, driven by higher sales volume and higher sales price realization, Andhra Paper posted record performance in all key parameters during the financial year 2022-23 which are the highest in the annals of the Company’s history. The higher sales volume was ably supported by the production vertical which posted highest production during the year with improved performance of Pulp mill and recovery operations. The benefits from above factors were partially neutralised by exorbitant increase in the cost of most input materials such as Wood, Chemicals, Wastepaper, Imported Pulp, Coal.

In his message to shareholder, Mr Shree Kumar Bangur, Chairman & Managing Director of Andhra Paper Ltd., said, “Amid continued macroeconomic tension, volatile commodity prices, currency fluctuations and high inflation, fiscal 2022-23 witnessed a fair share of economic uncertainties. Its trickle-down effects were also evident on the price of coal and pulp, necessary raw materials for our production process. However, despite the impact of these developments, our resilient approach allowed us to sustain the growth momentum and what could have been a difficult year, turned out to be a year of historic performance.”

APL’s products are preferred by Customers for Printing, Publishing and Converting applications. With changing market dynamics during the year wherein supply for a number of products were short in the Industry, APL was able to use its strength in changing product mix across machines to meet the need of the hour as per the Customer preferences thereby bringing in swinging capability from Writing & Printing to Industrial application products. This resulted in incremental sales of Cup-stock (17% YoY), High BF Virgin Kraft (85% YoY), Pharma Print (125% YoY) and Copier (5% YoY) With changing preferences in Customers and Government Regulations, Andhra Paper took timely initiatives on new product development and launched niche products, Carry Bag and Straw Paper during the year. These products helped meet the requirements of end customer needs resulting in an incremental product basket offering as well.

Mr Bangur further informed about APL’s financial performance, he said, “We reported revenue from operations of INR 2097.66 crores against INR 1,380.23 crores in FY 2021- 22. Our EBITDA increased from INR 265.81 crores in FY 2021-22 to a phenomenal INR 786.74 crores in FY 2022-23. Our PAT stood at INR 522.46 crores, up from INR 139.73 Crores in FY 2021-22. We also touched the highest ever production volume of 2,50,292 MT for the year and were able to sell 250,238 MT of our products during the fiscal.”

APL continues to be focused on delivering high-quality products which are innovative, sustainable, and recyclable that distinguish it from the competition. In this direction, the Company developed a Barrier Coated product – Eco Cup-stock which is CIPET Certified and will meet the regulated requirements for replacing plastic converted cups. In addition to this, APL constantly endeavours to improve existing products based on periodic feedback from customers and channel partners.

“To reiterate our commitment towards environmental sustainability, we have committed a capital expenditure of more than INR 500 crores to revamp and upgrade our plants, to make them energy efficient, reduce emissions associated with our operations and reduce waste,” he added.

With the changing demand environment as the year began on account of supply/demand imbalances and geopolitical issues resulting in logistic nightmares, APL was able to swing supplies from Exports to meet the requirements of the Domestic Customers resulting in a record breaking domestic sales of 2,22,344 MT (14% YoY). The strong distribution network, high product quality and adherence to delivery schedules helped Company to overcome volatile Trade Flows.

APL had put in its best efforts to achieve OTIF delivery rate (On-Time-In-Full) at 95.40%, forecast accuracy to 93%, and improved complaint closure to 80% which is considered top tier in the Indian Paper Industry.

The Company achieved the highest-ever sales in a year at 2,50,238 Tons (YoY 4%) with Zero Stock at the close of the year for second consecutive year.

The annual report for FY 22-23 of APL says that the global recession is pushing the paper products to India at a lower price which is a threat for wood-based mills to sell their products at a competitive rate. In Q3 FY22-23 exports of uncoated wood-free & packaging grades had also hit due to highly competitive prices from foreign mills.

FY 2023 Highlights:
• Highest Sales of 2,50,238 MT 
• Highest Domestic Sales of 2,22,344 MT 
• Substantial growth in Niche Application products like Cup Stock (17%), Pharma Print (125%) & Hi BF Virgin Kraft (85%) 
• OTIF Score – 95.40%, one of the best in the Paper Industry 
• Launched Carry Bag, Straw Paper and Eco Cupstock (Barrier Coated)

Operational highlights 

With the changing market dynamics, the Company began producing value-added products, including Cup stock, Pharma Print and Hi BF Virgin Kraft.

Apart from developing new products while considering industry trends, continuous efforts are being made to improve the existing products based on feedback from customers and channel partners to customise the products to suit their requirements. It is therefore gratifying that even during these challenging times, the Company’s performance ranked among the best in the paper industry. 

APL achieved its highest sales in a year at 2,50,238 MT (Y-o-Y 4%) with zero stock being achieved for the second consecutive year.

Mill Development and upgradation 

During the year, the Board of Directors approved a capital expenditure amounting to ₹400 Crores to rebuild and upgrade the existing Pulp plant to improve the reliability and efficiency of the Pulp Mill. This will help sustain the current levels of production, improve efficiency in Pulp Mill processes and lend flexibility in operations, augment pulp production capacity and the average capacity utilisation. The proposal was funded through mix of debt and internal accruals. 

The Mill development was undertaken in phases with critical areas of upgradation works on recovery boiler, lime kiln, Fibre line, Evaporation, Ash leaching, recausticizer, Auxilliary systems, modification of KA3 Machine, modern automated film press for RJ5 machine to produce Surface sized premium paper grades. Additional capital equipment was installed in place of obsolete machinery to improve efficiency in production processes. This helped the Company achieve higher net sales realisations. The capacity utilisation for FY 2022- 23 at unit- Rajahmundry stood at 102.3% and at unit: Kadiyam the same was 107.8%

Green Field Expansion Project

The Board at its Meeting held on January 31, 2023 accorded an in-principle approval to the pre-feasibility report to exploit opportunities in Paper Board Segment through expansion and capacity addition by setting up an integrated Green Field Project at Unit: Kadiyam, East Godavari District, Andhra Pradesh. It is proposed to install approximately 175,000 Ton per annum Board machine (KA#4) along with ancillary and support infrastructure concerning the project. The existing production capacity is 87,000 TPA. The proposed capacity addition is 2,21,000 TPA (Pulp) and 1,56,000 TPA (Paper Board).
 

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