JK Paper targets INR 1000 Cr. turnover from Corrugated packaging business in FY 24; establishes a direct engagement with customers through AI-based chatbot

JK Paper targets INR 1000 Cr. turnover from Corrugated packaging business in FY 24; establishes a direct engagement with customers through AI-based chatbot

- JK Paper expects to generate over INR 1,000 crores turnover from Corrugated Packaging business in FY 23-24
- Revenue increased by 57% from INR 4165.76 crores in 2021-22 to INR 6,543.68 crores in 2022-23.
- The Company reported a 73% increase in Profit after tax (PAT) in 2022- 23 following record revenues and cost management, JK Paper earned INR 885.33 Cr PAT in fy 22-23
The Pulp and Paper Times | 2023

JK Paper Limited is among the leading Paper and Packaging Board companies in India. The company has graduated to become a distinctive brand within its sector.

In a capital-intensive industry, financial stability enhances the effectiveness of all aspects of the business, promoting long term viability. JK Paper has consistently bolstered its sustainability by making wise investments, securing affordable and long-term debt, increasing the use of accrued funds, adding value to offerings and improving trade terms.

In the annual report for FY 22-23, Mr Bharat Hari Singhania, Chairman- JK Paper Limited, said “The global shift to responsible eco-friendly packaging has led to a conscious decision to reconfigure our product mix in favour of packaging materials. In fact, we have accelerated this transition in this space, with expansion to 2,91,000 TPA or 38% of our capacity from smaller presence, in just a year. The company expects to generate over INR 2000 crores in turnover from this business in the current financial year, validating its entry into the space”.

The Company incurred INR 14.26 crores on CSR activities in 2022-23 directly benefitting almost 7 Lac people across 846 villages in Gujarat, Uttar Pradesh, Telangana and Odisha, a 5-fold jump in the last 4 years (2020-23). Amongst the notable achievements is the launch of a green campus program with Climate Reality Project (across air, water, biodiversity, energy and waste management). 27 schools were registered in Rayagada under the program.

“The global paper industry witnessed an upsurge in paper and pulp prices due to increase in demand and rise in input costs. This along with the continuous improvement made by your Company in product mix, lowering energy costs, enhancing people productivity and a wider-deeper distribution network resulted in the record performance in the last financial year, with highest ever Sales, EBIDTA and PAT. JK Paper, which leads the office paper vertical, witnessed robust growth in sales by 46% in 2022-23 over 2021-22, which was primarily contributed by the rising popularity of co-working space and the opening of offices in new locations., The expanding education sector and the emphasis on literacy are also positively impacting the market for writing paper. With demand for environment friendly and sustainable alternatives, including office paper, expected to rise in the foreseeable future, we are continuing to widen and deepen the distribution footprint while increasing our market presence in this business.” Mr Harsh Pati Singhania, Vice Chairman & Managing Director- JKPL said. 

JK Paper is well-positioned to benefit from the shift from plastic to paper in the food packaging industry, with new product launches that offer oil and water resistance, moisture and oxygen barrier and heat sealable capabilities. In response to the growing need for sustainable packaging, the company has developed plastic-free alternatives.

JK Paper also doubled the sales of packaging boards (including exports) during the year under review due to ramp of volumes from the new Packaging Board plant.

As part of the strategic initiative JK Paper entered into Corrugated Packaging business to take advantage of the growing industrialisation and e-commerce markets which is expected to grow at a healthy rate. To this end, a greenfield state of the art plant has been set up at Ludhiana. The combination (organic and inorganic) of initiatives has graduated the company from no presence in this space to 320,000 TPA. By the virtue of a dispersed national presence, the company is close to industrial demand intensive hubs, marked by a lower logistical incidence

Furthermore, the Company had acquired 85% stake in Horizon Packs Pvt. Ltd and Securipax Packaging Ltd, which are engaged in Corrugated Packaging business and are collectively number one in the Country. These acquisitions are in synergy with the growing packaging sector enabling substantial expansion of the corrugated packaging business, making it the largest organised player.

JK Paper is now positioned to build on customer proximity and enter into multi-year relationships. Besides, the presence in the brown segment is expected to broad base revenues on the one hand and enhance the company’s respect as environment friendly on the other. The company expects to generate over INR 1,000 crores turnover from this business in the current financial year, validating its entry in the space.

HPS We have been able to successfully turnaround the operations of Sirpur Paper Mills during the year under review through our focus on quality, which enabled the Company to gain customer’s confidence, resulting in good order book along with equipment uptime through a structured preventive maintenance schedule and improving customer service levels. This resulted in the production to grow from 97,401 MT to 1,21,898 MT, a jump of 25% y-o-y.
The Company extended into direct marketing, enhancing its value chain and graduating the consumer relationship to a different level. To establish direct engagement with customers through a D2C platform, we came up with JIA (JK Paper Intelligent Assistant), an AI-based chatbot, which is currently active at pan India level.

The Company continued to play an industry-leading role in encouraging social forestry in the hinterlands of its manufacturing facilities. During the year 2023, the Company had planted trees covering 55,700 acres in Odisha, Andhra Pradesh, West Bengal, Telangana, Maharashtra, Gujarat and Chhattisgarh. This has not only increased resource access and moderated delivered wood cost, but also greening environment and enabling the Company to be wood and carbon positive. It has enhanced livelihoods of over 84,000 farmers who have benefited through the Company’s farm forestry over the last 10 years. The Company has sharpened the focus on FSC-FM certification during the year and the Certified coverage as % of total plantation coverage increased from 27% to 63% at JKPM unit and from Nil to 57% at CPM unit over the period of last five years.

The company embarked on growing its retail presence some years ago. During the last financial year, the realisation was complemented by digitalisation and formalised under the Leap200 campaign. The company recruited employees to specifically visit retail partners to understand consumer needs, collect orders and ensure that these were serviced with speed. The proprietary ownership of this activity resulted in a more intensive and periodic coverage of a larger sales footprint. The result is that the JK Paper representative became a timed fixture, enhancing familiarity. The company also launched a Chat BOT to service retail enquiries in real time.

Highlights, 2022-23 
JKPM 
-The plant (one of the largest in India’s paper sector) manufactured 3,35,757 tonnes (3,03,632 tonnes in the previous year); capacity utilisation was 107% 
-The plantation extended to 9543 hectares, 25-30% more than the yearly harvest 
-The plant’s pollution was below the threshold limit specified by Pollution Control Board and one of the lowest in the industry 
-The plant’s employees participated in programs like total quality management (TQM) and LEAP 200 with corresponding upsides 

CPM 
-The plant accounted for 49% of the Company’s manufacturing capacity in 2022-23 
-The plant manufactured 3,13,854 tonnes (1,87,579 tonnes in the previous year); capacity utilisation was 101%. The plant’s overall equipment effectiveness (OEE) increased, marked by lower waste, enhanced plant availability, capacity debottlenecking, increased speed and reduction in furnish by increasing ash loading and reducing fibre loss 

SPM 
- The plant manufactured 1,21,898 MT of paper with the highest ever finished production at 10,850 MT/month and 1,00,626 MT of pulp 
-The plant’s overall capacity utilisation was 90% with nearly 100% revenues earned through in sourced products 
-The plant received BIS Certification for the copier and maplitho segments. 
-The plant reported the lowest power consumption of 1,414 kWh/MT with 97.8% of its power needs addressed through captive generation 
-The plant implemented an action plan to increase production from 320 TPD to 350 TPD, based on a process audit by Andritz. The plant is implementing TQM for quality improvement and lower inline rejection 
- The plant introduced one-point lesson at every process stage to enhance quality awareness
Paper and board demand are expected to remain high due to cost-effectiveness and renewability. The company is committed to conserve natural resources, utilising modern technologies (big data analytics and artificial intelligence). The company is exploring different chemicals for offline coating. It will expand the product range and upskill workers to enhance machine runnability. It will seek ways to reduce costs and achieve 100% capacity utilisation across plants.

Outlook, 2023-24 

JK Paper will continue to carry out flagship events like AutHer Awards, Mother’s Day, Father’s Day. We are planning to launch a 360-degree digital campaign on positioning our brand as a sustainable paper solutions provider with the help of digital campaigns to promote new products like JK Copier Plus (Anti-microbial) and JK Pac Fresh. We will intensify our market research through initiatives under the Leap 200 Project, entailing demand sensing and digital sales enablement. We intend to launch quick service centers for packaging board dealers and a new jobbers program with modifications and a loyalty program for converters in the packaging board segment.

PERFORMANCE REVIEW

The Company achieved its highest ever Sales, EBIDTA and PAT during the financial year 2022-23 despite higher input costs. Ramp up of volumes from the new Packaging Board plant at Unit CPM coupled with overall better realization have contributed in increasing overall revenues of the Company. The Gross Revenue, EBIDTA and PAT increased by 57%, 72% and 73%, respectively, compared to FY 2021-22
 

Web Title: JK Paper expects to generate over INR 1000 Cr. turnover from Corrugated packaging business in FY 24; establishes a direct engagement with customers through AI-based chatbot