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Pudumjee Paper is exploring different kind of packagings with or without use of paper; reports INR 30 Cr net profit for FY 2020-21

Author: | Date: 4 years ago

Pudumjee Paper is exploring different kind of packagings with or without use of paper reports INR 30 Cr net profit for FY 2020 21

Pudumjee Paper is exploring different kind of packagings with or without use of paper; reports INR 30 cr net profit for FY 2020-21

Mumbai | 1st September 2021 | The Pulp and Paper Times:

“Pudumjee” laid the foundation of their Specialty Paper business with a core belief in value creation. The business that came to the company was started with the manufacture of high quality papers to meet customer’s critical and demanding requirement in packaging of food and oily products. Pudumjee Paper Products Ltd (PPPL) is now exploring different kind of packagings with or without use of paper for which purpose it has in December-2020 amended and expanded object clause of the Memorandum of Association.

“The dynamic marketing and pricing strategies adopted by the Company for the last few years has been able to systematically put the Company and its products on better footing when compared with the previous years. This marketing strategy not only incentivizes the market participants but also achieves better capacity utilization, low inventory and improved margins,” said Mr. A.K. Jatia, Executive Chairman of Pudumjee Paper Products Limited in the annual report of the company.

Pudumjee Paper’s manufacturing facilities are located at Thergaon, Pune where due to rapid urbanization it becomes imperative to relocate its manufacturing site for which purpose the Company had invested in an industrial site of about 75 acres at MIDC, Mahad in Maharashtra where while relocating the aforesaid facilities, future growth opportunities can also be tapped.

Mr. Jatia further inform about the company’s plan said, “we have been exploring various options in regard to manufacturing of new addition of products whenever the facilities are relocated at Mahad at an expanded capacity which obviously requires high investment”

The current manufacturing facility at Pune has witnessed rapid urbanization around it and faces all associated challenges including higher cost of operations. These facilities are located on the land and buildings owned by AMJ Land Holdings Ltd. (Formerly known as Pudumjee Pulp & Paper Mills Ltd.) and 3P Land Holdings Ltd. (Formerly known as Pudumjee Industries Ltd.) under Leave and License agreement, which has been renewed and extended upto 31st January, 2026 pending Company’s plans to relocate facility to 75 acre site at Mahad.

                     
“As stated, the Company’s papers are used for various packaging applications. With the objective of enhancing extent of value addition to its existing and potential range of products, the Company is also exploring different kind of packagings with or without use of paper for which purpose it has in December-2020 amended and expanded object clause of the Memorandum of Association,” he said.

Whilst it is difficult to estimate precise future impact of Covid-19 on Company’s operations in view of the prevailing uncertainty about the duration of Covid-19 in the country, again caused by its second wave, it is believed that the Company’s operations would be in line with overall developments and revival of economy and business sentiments prevailing in the ‘unlockdown’ phases. Pudumjee Paper also recognizes the opportunities arising to its business of paper and hygiene products, due to likely increased preferences of public (i) to avail of more ecommerce platform for door delivery as also and (ii) about more and better hygiene practices. PPPL is currently comfortably placed in terms of capital and financial resources and liquidity position, since the profitability during the year has been much better than envisaged but it may suffer due to the sluggish operations unless a quick and robust rebound in the economy takes place or waves of pandemic are contained through aggressive vaccination. The internal finance reporting and controls are robust and are periodically evaluated. These reporting and controls have been appropriately modified to allow certain office function to be discharged under “Work from Home” environment and wherever feasible to discourage document handling.

OPERATIONS :

During FY 2020-21 Pudumjee Papers has achieved a net profit of INR 30.03 crores as against a profit of INR 27.21 crores  in the last year in spite of it being a difficult year faced by the nation owing to Covid pandemic. The profit for the year is much higher at about INR 4,648.21 lacs but for provision for exceptional items of INR 2,449.59 Lacs made during the year in respect of disputed liability for electric power availed by the Company in earlier years. Whilst the nation-wide lockdown in earlier part of the financial year compelled the Company to halt its production upto 11th May, 2020, subsequent lower utilization of its capacity at 61% due to lower demand in certain products resulted in lower turnover at INR 436.88 crores ( INR 604.48 crores last year). However, the pandemic Covid offered opportunity to the Company to reposition and sell more value added papers with better margins which opportunity was appropriately supported by prudent raw material inventory management, lower input costs and other measures for cost reduction. The consequent higher profit margins, also reaffirms inherent strength the Company and its many products have.

The Hygiene Products Division, which primarily focuses on Institutional Business, on the other hand, could achieve lower turnover, operating at about 30% of normal level at INR 1,973.52 lacs (INR 5,687.35 lacs last year), due to closure of corporate offices, hotels, restaurants etc.

The present second wave of the Covid 19 has caused lockdown kind of conditions, in some of Company’s major markets, although temporary, may result in some uncertainty about extent of performance in Financial Year 2021-22 specially in the wake of suspicion about subsequent wave(s). The Company’s paper production is currently continuing at about 70% of capacity of 6,000 MT per month.

Whilst PPPL, as stated aforesaid, is well-known for the specialty paper manufacturing and has certain niche products, does have its limitation of raw material in as much as it depends upon imports of market pulp and waste paper to meet its fibre requirements. The prices of these raw material significantly impact its margins. Through the substantial part of the year the prices of raw material virtually remained without much of movement. The market pulp prices of various grades put together ranged from INR 36,000/- to INR 52,000/- Per MT. Of late these prices have hardened and moved to the range of INR 63,000/- to INR 78,000/- per MT.

Overview:

Pudumjee Paper has two business divisions, namely; Paper Division and Hygiene Products Division. The Company is well-known for manufacture of specialty papers having market span throughout the country with some exports to nearby countries and Europe. These specialty papers having specific required properties are meant to address special purposes in various applications such as packaging of food products, industrial applications and applications required in oil and grease resistance etc.

Published at : Jul 10, 2022 01:45 PM (IST)
Total Views : 10876
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