Emami Paper: Chinese mills flooded the South-East Asian market with their paper products, resulting in a loss of nearly 30% of market share for companies in India

Emami Paper: Chinese mills flooded the South-East Asian market with their paper products, resulting in a loss of nearly 30% of market share for companies in India

-Annual Progress Report for FY 22-23:

-Company’s export sale stood at INR 270 crore compared to INR 586 crore in immediately preceding financial year
- A size press successfully retrofitted in the largest newsprint machine of Emami Paper Mills making it suitable for producing other grades of papers
The Pulp and Paper Times: 

Emami Paper Mills (EPM) is one of the largest newsprint manufacturers in the country as well as a leading manufacturer of Packaging Board and Writing & Printing Paper. Having a rich legacy of delivering superior quality products.

Setting aside the conventional approach, the Emami Paper of today believes in informing and educating its stakeholders. EPM is transparently sharing financial performances, operational metrics and procurement strategies within the organisation and it has created deeper engagements of various teams within the organisation. The cross-functional synergies derived from these efforts inspire us to set more precise targets and aim for greater goals.

“Over the past year, we have continuously reiterated our commitment towards excellence, innovation and sustainability with a greater focus on adapting ourselves to an evolving business landscape. We have adopted a proactive approach to understand client expectations, improved our capacity to develop new-age products and above all, kept an unwavering focus on abiding by the highest standards of quality. Alongside, our focus on ensuring customer satisfaction drives us to operate with great passion, enabling us to produce customised products and consistently create new revenue generation streams. Besides, it forges enduring relationships and earns us the trust and loyalty of a marquee clientele,” said by Mr. Aditya V. Agarwal, Executive Chairman of Emami Paper in the annual report for FY 22-23.

Mr Agarwal further added, “As a responsible business, we believe in not just pursuing profitability, but also take into account its impact on the environment and society. By undertaking initiatives for the welfare of communities, optimising resource utilisation, and embracing viable methods to minimise our imprint on the planet, we are actively contributing to a greener and more sustainable future.”

During the fiscal year, EPM revenue grew by 18%, reaching INR 2,308 crore. The EBITDA and PAT stood at INR 237 crore and INR 69 crore respectively in the previous fiscal year.

“Reflecting on the past year, while the first half favored us, the latter part did not progress as expected. Several factors contributed to this, including the unprecedented increase in the price of pulp, our key raw material. The Russia-Ukraine conflict and the COVID-19 outbreak in China were among the reasons for this surge. Additionally, the domestic consumption of pulp declined, and Chinese mills flooded the South-East Asian market with their paper products, leading to a significant impact on our sales. This region accounts for 20%-30% of Indian exports, resulting in a loss of nearly 30% of market share for companies in India. Moreover, the energy crisis in the Euro region posed a threat to our industry,” said Mr. Vivek Chawla, Whole-time Director & Chief Executive Officer.

Mr. Chawla further added about Focus on innovation and digitization, he said, “Focus on innovation and digitization remains a top priority for Emami Paper Mills. We understand that innovation is the key to remaining competitive in an ever-evolving paper industry. To foster innovation, we have established a dynamic Product Development Cell, dedicated to creating innovative paper products that meet the diverse needs of our customers while driving profitability. This emphasis on quality and customization ensures we deliver high-quality products that stand out in the market”.

On the way forward, Mr. Chawla described that our unwavering commitment to quality, customer engagement, cost optimization, and operational efficiency will continue to be the cornerstones of our success. By consistently delivering high-quality products and services, engaging with our customers to understand their evolving needs, optimizing our costs, and driving operational efficiency, we are confident that we will achieve sustainable growth in the years to come.

Emami Paper Mills recognizes the importance of technology as a catalyst for progress. Through continuous investment in technology, EPM aims to enhance productivity, streamline processes, and ensure efficient resource utilization. By leveraging technology, EPM will stay at the forefront of innovation and reinforce its position as a leader in the industry.

Environmental stewardship is another key pillar of Emami Paper Mills' sustainability strategy. Given the nature of our industry, it is crucial to find ways to reduce freshwater consumption. To this end, Emami Paper Mills has set internal targets to increase the share of recycled water used in paper production processes. We are also implementing energy-efficient practices by employing state-of-the-art energy meters to monitor and curtail energy usage. These initiatives reduce our carbon footprint and minimize our impact on the environment, aligning with Emami Paper Mills' long-term sustainability goals. 

EPM’s total production capacity stands at 3,40,000 tons per annum. It has also established a captive power plant generating 33.5 MW power, thereby ensuring self-sufficiency in meeting our energy and steam demands. EPM produces 2,00,000 tons per annum of multilayer coated packaging board and have a combined capacity to manufacture 1,40,000 tons per annum of superior quality writing and printing paper along with best-in-class newsprint.

During FY 22-23, the export sales of the Company declined mainly due to increase in export from China to the Southeast market at throwaway prices where the paper industry in India was exporting. This led to sharp fall in the prices of the Paper Board in the countries where the Company was exporting. In FY 2022-23, the Company’s export sale stood at INR 270 crore compared to INR 586 crore in immediately preceding financial year.

During FY 2022-23, EPM witnessed a significant impact from the rising prices of major imported raw materials such as pulp, waste paper and fuel. Amidst a trend of global greenflation, there has been also a surge in freight rates and container costs. Currently, we are sourcing raw materials from countries like United States of America, United Kingdom, Canada, New Zealand, Indonesia, etc. During the pandemic period and even thereafter, there were bottlenecks with regards to supply chain which is gradually now streamlining.

A size press successfully retrofitted in the largest newsprint machine of Emami Paper Mills making it suitable for producing other grades of papers. The trial run has been successfully completed. For the first time in the Indian Paper Industry, such a project in a running mill was successfully commissioned. With the successful commissioning of size press, the company was able to cater to the increasing market demand in the writing and printing paper segment apart from Newsprint. The writing and printing paper segment gave a good realization.

The Report further added that the paperboard and industrial packaging paper markets, as well as the newspaper print markets, are estimated to account for over 70% of the total paper market share. However, the stationery paper and speciality paper sectors are predicted to experience an upward trend in annual market growth in terms of volume, while the growth of the stationery paper market in terms of value is likely to decline. At present, the growing demand for environment-friendly products is driving manufacturers to seek effective ways to meet this emerging demand. The paper industry is benefiting from technological advancements, which have resulted in improved production capacity and reduced fuel costs, among other advantages, thus enabling the industry to scale new heights.3 The pandemic adversely impacted paper consumption, leading to a sharp decline. However, demand has recuperated strongly in the current fiscal year, surpassing prepandemic levels.
 

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