Customers are not willing to pay high costs for water-based coatings in India, says Mr. Santosh Wakhloo, ED of Marketing at TNPL, which plans to diversify into tissue production

Customers are not willing to pay high costs for water-based coatings in India, says Mr. Santosh Wakhloo, ED of Marketing at TNPL, which plans to diversify into tissue production

Mr Santosh Wakhloo Foresees Dynamic Changes in India's Paper Industry

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In his address, Mr. Santosh Wakhloo, the Executive Director-Marketing at The Tamilnadu Newsprint and Papers Limited (TNPL), offered a comprehensive perspective on the current state and future trajectory of the paper industry in India. Mr. Wakhloo touched upon the industry's overall growth, challenges faced, and TNPL's strategic initiatives to stay ahead.

The Pulp and Paper Times: 

Robust Growth Amidst Segment Dynamics

Mr. Wakhloo began by highlighting the overall robust growth in the Indian paper industry, citing significant expansions across virtually all segments. However, he acknowledged the declining trend in newsprint, noting a flattening or decline in the coated paper segment, and the lingering impact of the Covid-19 pandemic on coated paper volumes, which are yet to reach pre-pandemic levels. On a positive note, Mr. Wakhloo shared that writing and printing segments, as well as packaging boards, have experienced substantial growth - with writing printing showing muted growth at about 3%, and packaging boards flourishing at an impressive six to 7%.

Adapting to Market Dynamics

Mr. Wakhloo stressed the industry's challenge to adapt its product mix to stay relevant. He explained that TNPL, as a major player in the writing and printing segment, has expanded into packaging boards, which currently contribute nearly 33% of the company's volumes. Despite the shrinkage in the writing and printing market, Mr. Wakhloo pointed out that the demand remains due to a burgeoning young population and a heightened focus on literacy and education. He emphasized the role of quality, modern machinery, and customer discernment in sustaining demand.

Challenges in Shifting to Eco-Friendly Practices

Speaking on the industry's move towards eco-friendly practices, Mr. Wakhloo acknowledged the increasing use of plastics as a composite in paper-based packaging. While the industry is transitioning towards water-based coatings, he highlighted the economic challenges associated with this shift. Drawing attention to the price differential, Mr. Wakhloo emphasized the need for a balance between technology and economics, stating that customers are not willing to pay a substantial premium for eco-friendly alternatives.

He mentioned that there are solutions to making paper as a barrier against moisture, as a barrier against oil, but economics and those are water based coatings. But economics have still not worked out and we need to understand that as a country we are not a very rich country. I mean, we look at a differential in price. Supposing the PE cost is about eight to INR 8 to 10 kg or 8000 to INR 10,000 a ton on paper. Whereas going with the aqueous coatings to get the same barrier properties, we have to spend somewhere around INR 25,000. Customers are not willing to pay. One thing I must say that Indian audience is or Indian population or the customer is very sharp and smart to move. I would say as soon as somebody has to be a forerunner or a front runner to ensure that they give a suitable product at a decent price point to shift and start the shift of the market from plastics or PE to water based coatings.

Mr. Wakhloo expressed confidence in Indian innovation, predicting a faster shift from plastics to water-based coatings compared to advanced countries. He underscored the need for a pioneering move to present a suitable product at a reasonable price point, estimating a maximum of a year to a year and a half for this shift to be economically viable in India.

Indian Innovation: A Catalyst for Change

Mr. Wakhloo expressed confidence in the innovative spirit of the Indian population, predicting a faster shift from plastics to water-based coatings in India compared to advanced countries. He believed that a suitable product at a reasonable price point could drive this change within a year or a year and a half.

TNPL's Strategic Diversification: Tissue Segment and Beyond

Looking ahead, Mr. Wakhloo unveiled TNPL's plans for further diversification. Despite acknowledging the tissue segment's relatively small size, he highlighted the substantial change in consumer behavior post-Covid, with increased tissue usage in both the HORECA segment and households. TNPL is actively planning to venture into tissue manufacturing, anticipating significant growth similar to what was witnessed in the virgin packaging boards market.

In conclusion, Mr. Santosh Wakhloo's insights shed light on the complexities and opportunities in the Indian paper industry. As TNPL navigates these challenges, their proactive approach towards diversification and innovation positions them as a key player in shaping the future of the industry.
 

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