Ruchira Papers will reorganise its production capacity in line with the dynamics of an evolving marketplace

Ruchira Papers will reorganise its production capacity in line with the dynamics of an evolving marketplace

-RPL's flexibility will translate into the manufacture of fast-moving and value-added products, strengthening overall profitability

- Writing & printing paper capacity (also referred to as ‘white’) will be allocated to wedding cards and other value-added products

The Pulp and Paper Times:

Ruchira Papers Limited (RPL) produces and markets kraft paper as well as writing and printing paper grades. The Company established a dependable recall, scale and leadership in North India where a majority of its products are sold.

RPL reported 34.81 per cent higher sales during the last quarter of FY 2021-22 compared to the last quarter of FY 2020-21 and an increase of 31.92 per cent in average realisation over the previous year

The Company’s writing & printing paper capacity (also referred to as ‘white’) will be allocated to wedding cards and other value added products (cup stocks and branded copier paper included). This will progressively moderate RPL’s dependence on writing and printing paper grades.

Ruchire Papers’  kraft paper capacity will focus on the manufacture of packaging grade varieties. The Company’s flexibility will translate into the manufacture of fast-moving and value-added products, strengthening overall profitability.

“The Indian paper sector is at an inflection point. There is a stronger nationwide commitment to moderate the use of plastic for packaging applications. This plastic of a relatively thinner grammage (measured in microns) is being replaced with paper of a higher grammage, addressing the demanding market needs of a higher burst factor, tensile strength and durability requirements.” Stated by Mr. Jatinder Singh, Chairman, Ruchira Papers Limited in the annual report for 21-22.

Mr Singh further says that the result is that an entirely new opportunity has opened in terms of scale, scope and sophistication. We believe that more investment is likely to go into research-led production; manufacturers are likely to work closely with downstream converters; new supply chain linkages are likely to be explored.

“There is another factor that provides us with long-term optimism. India is embracing e-commerce with speed. The numbers being enunciated by serious research houses indicate that the number of internet users in India is likely to increase from around 84.6 Crore in 2021 to an estimated 134 Crore by 2030. This 44 per cent increase in internet users could drive the growth of the Indian e-commerce market by 19 per cent per annum until 2030 and create a USD 400 Billion e-commerce market opportunity (estimated at around USD 100 Billion in 2022)” he said.

The management of RPL was pleased on account of the sharp recovery in performance following the decline of the previous year. RPL reported record results during the last financial year: sales at Rs.612.86 Crore were 27.41 per cent higher than the pre-pandemic level of Rs.481.01 Crore; the sales of Rs.190.54 Crore that we reported during the fourth quarter of FY 2021-22 was the highest in any quarter reported by the Company and higher than the previous fourth quarter by 34.81 per cent. Net profit increased 563.12 per cent to Rs.33.09 Crore Correspondingly. These numbers indicate that the Company capitalised effectively on the rebound in market sentiment during the last financial year.

RPL remained flexible and responsive to changes in the marketplace. There were two options available to our Company: keep making writing & printing paper and market it at progressively declining costs in the face of sluggish demand or shift to alternative products using the same infrastructure and utilising virtually the same distribution network.

Mr Singh informed that the result is that we kept adapting our product mix through the course of the year: for instance, as the market shifted from plastic beverage cups and with the revival of the marriage market, we enhanced the production of cup stock paper and wedding card paper and allocated approximately 50 per cent of our writing and printing paper capacity for these segments (capitalising on a lower production cost on the same machine, strengthening profitability). As consumers began shifting from plastic bags, we allocated a small portion of our white paper capacity for bleached kraft carry bags; the kraft machine experimented successfully with the manufacture of cup stock for paper bowl applications.

RPL reported a 13.48 per cent increase in production to 1,40,688.24 MT during the course of the year. Writing and printing output was 25.05 per cent higher than the previous year; kraft output was 7.50 per cent higher. The average realisation for writing and printing paper segment was 23.17 per cent higher; the average realisation for kraft paper segment was 35.79 per cent higher than the previous year. These numbers indicate that the Company experienced volume and value growth during the last financial year.

A few years ago, the management of RPL had announced the creation of a large paper manufacturing facility in Punjab. Mr Singh further updated that INR 800 Crore (estimated) project was deferred following the pandemic. However, given the cash flows of the last year and the projected surplus for the current year, the time will soon come to take a call on this project.

Web Title: Ruchira Papers will reorganise its production capacity in line with the dynamics of an evolving marketplace