Satia Industries plans to raise speeds of PM4 and PM3 will culminate in huge energy savings, converting rice husk boiler to a rice straw boiler

Satia Industries plans to raise speeds of PM4 and PM3 will culminate in huge energy savings, converting rice husk boiler to a rice straw boiler 

- Recorded a remarkable growth of 111% in revenue for FY 22-23
- Hope to maintain these levels of margin 4 with slight increase in production volume in the financial year 2023-24

The Pulp and Paper Times: 

Satia Industries Limited (SIL) is one of the leading Wood and Agro-based paper manufacturers in India, with a completely integrated manufacturing setup with 4 paper machines, 100% in-house power generation, soda recovery plant and one of the best effluent treatment facilities in the nation.

Last year the company added a 4th state of the art paper machinery to its production facilities with a capacity of 100,000 MTPA. With a diverse capex program to modernize and scale up its capacities, SIL now has total installed capacity of 2,05,000 MT in FY23.

“Satia Industries achieved a production volume of over 2.0 lac tons and supported by the robust market demand and bullish prices, we were able to almost double the topline to 1897.80 crores and the PAT to 192.17 crores in the financial year 2022- 23. We hope to maintain these levels of margin 4 with slight increase in production volume in the financial year 2023-24. Our focus in the current year shall remain on new product development and quality improvement of the existing product line supported by increase in wood pulp in total furnish. Your company shall make all out efforts to fulfil the high expectations of our customers for a quality product especially from PM 4.” Stated by Dr Ajay Satia, CMD of SIL in the annual report for FY 22-23

Dr Satia further stated, “We are continuing with our Project Green with full thrust to meet the shortage of wood based raw material in future and also fulfil our responsibility to plant more trees than we use to make pulp and paper. Our focus is on sustainability by using maximum of agro waste, veneer waste and wood waste being generated in plywood industry. We plan to start a new steam boiler in this year which will use rice straw as fuel leading to fuel cost saving and solving environment pollution problem caused by burning of rice straw in the open fields.”
Performance for FY 22-23 

SIL recorded a remarkable growth of 111% with the turnover of Rs 18,837 Mn in comparison with Rs 8,909 Mn in the previous year. Net Profit for the year 2022-23 stood at Rs 1,922 as against Rs 1,007 Mn in the previous year. SIL announced a 40% equity dividend for the year FY23.

Cost Saving Initiatives 
SIL introduced PM4, a new state of the art machine with a speed of 1025 meters per minute, in February 2023. In the coming year, management plans to raise its pace by 10%. Between FY24 and FY25, PM3 will be modernized, and its speed will be increased from 650 meters per minute to 800-850 meters per minute. The enhanced speeds of PM4 and PM3 will culminate in huge energy savings for the company.

With Rice prices rising to the levels of Rs 7,000 to Rs 8000 a ton we are converting our rice husk boiler to a rice straw boiler to make production more economical. The rice straw fuel costs ~Rs. 2,000 a ton, nearly one fourth of the rice’s price as on date, which will reduce production costs significantly in the next financial year.

Capacity expansion
Satia purchased eight new cutlery machines, two of which have been installed in Q4FY23 and the remaining six would be installed in Q2FY24. Two of the eight wood pulp digesters were upgraded with modern technology in March. The new improvement allows for decreased steam consumption while producing more pulp. By the end of Q2FY24, the next six digesters will have been modified.
The installation of a DD washer, which performs three washings in one, has freed up one pulp washing line. The company shifted the spare pulp washing line along with a standby wood cooking setup to agro-pulping, thereby boosting the capacity from 220 to 270-280 tonnes.

With enhanced wood pulping capability, Satia can supply 100% in-house wood pulp or 10- 20% additional pulp to its paper machines. This extension will aid in the production of highquality surface-size Maplitho paper, increasing the paper’s sales. By introducing a product in the Maplitho market, the company can increase its average grammage from 54-55 GSM to 65 GSM, enabling them to reach 100% or greater machine capacity utilization.

SIL’s Strategic and Sustainable Revenue Model
- SIL supplies High quality watermark paper to various state boards.
- Consolidated demand from all Textbooks board is approximately 5,00,000 TPA of paper
- By supplying ~50-75k TPA to various state boards, SIL boasts of a major market share in this vertical. 
- The State Text-book orders are tender driven business, these projects are State government funded under Sarva Shiksha Abhiyaan and do not rely upon school fees to pay the vendors, the average receivable days happen to be 45-60 days
-Sales to Textbook boards command higher (10%) operating margins as compared to open market, attributing to higher GSM and less finishing loss due to single size and more filler in the paper. 

Open market supplies: ~50-60% of Revenues
SIL supplies to retail traders through its strong Pan- India distribution network with 70+ dealers and 3 branch offices located in Delhi, Chandigarh & Jaipur. 
-Out of total sales from Open Market Supplies, ~5-10% of sale comes from Rajasthan and Delhi in a Direct sale, to end users, and facilitated by the SIL’s employees.
 

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