In two months time, Emami is set to commence work on its Greenfield packaging board project in Gujarat. The Group sees the current phase of growth in packaging a good sign for the industry to put capacities.
Paper Mart talked to Mr. P.S. Patwari, Executive Director, Emami Paper Mills Ltd to know the developments on the planned board project in Gujarat. Mr. Patwari also divulged during the interview that the Group intends to increase the capacities in existing units of packaging board and newsprint to 200,000 tonnes and 150,000 tonnes respectively by the end of this year.
Paper Mart: Please tell us about the new expansion plans.
P.S. Patwari: We are in the middle of a major expansion in Gujarat. We are setting up a new packaging board mill with an annual capacity of 200,000 tonnes. The land has already been acquired and all the formalities and clearances from Govt. Authorities have been completed. The civil work on the new plant is expected to commence within the next 2 months. The orders for machines and equipment are underway to be completed within next 30 days, immediately after which we would start the work on the mill site.
PM: Tell us something about the technologies that you have planned for the new plant?
PSP: Emami is an extremely brand conscious group with an uncompromising attitude towards product quality and absolute customer satisfaction. As a result, we have been constantly making products which are internationally competitive withstanding all the conceivable quality standards, be it consumer boards or other products within the segment. Such quality commitment is unthinkable without cutting-edge technology, which remain our unwavering priority for the new mill also. We are going for a combination of technologies, which are the best world over. The Board machine would be a mix of European and Asian solutions, the critical parts and major equipment coming from Europe’s leading suppliers. Environmental sustainability, energy efficiency, and least resource consumption are the central considerations for selecting the technologies for the new plant.
PM: Is your current capacity being fully utilized? Is there any capacity increase planned for the existing unit? What is the raw material scenario?
PSP: There is more than 100 percent capacity utilization in our mills.
We are further increasing the capacity for both packaging board and newsprint. At the end of this year, we intend to achieve a capacity of 200,000 tonnes in packaging board and 150,000 tonnes in newsprint.
For raw material, we will be working more on the imported pulp, imported wastepaper, and local wastepaper.
PM: The newsprint market is now doing very well. What are your thoughts on that? Also, do you plan any expansion on the newsprint side?
PSP: Newsprint is doing very well mainly because of China, who has stopped importing inferior quality of wastepaper. This has created a shortage of newsprint and shooting up the prices. The Chinese Govt. has become quite uncompromising in its environmental dealings creating opportunites for the papermakers in India and other countries.
The Greenfield expansion in Gujarat is already under process. Once this project completes and stabilizes, we would think of any other, for instance newsprint. It will take almost 2 years or more to commission the Gujarat project.
PM: With all the expansions lined up on the packaging front, what are your thoughts on market? Is the market ready to consume this much capacity?
PSP: There is a big growth in packaging. In the high-end segment, the growth is in double digits. We are in the high-end segment for which the base is very small. Every year there is an additional requirement of over 100,000 tonnes for the high-end packaging board. These types of capacities so far have not been announced and will take some time to get fully implemented.
The demand is also supply driven. Once the supply is increased, the demand follows and matches the supply. I don’t think the industry is going to face challenge on account of capacities being created on high-end packaging segment. In fact, these capacities are needed for the growth of the industry and more such capacities would be announced in future. For instance, we have planned at least two such expansions in Gujarat. We have the infrastructure and have acquired enough land in case we announce such other capacities in future. The area we have acquired is adequate for producing 500,000-600,000 tonnes of paper and board. We are putting only 200,000 tonnes for now. We will install another board machine once the ongoing project is completed. There is undoubtedly a good demand and growth in the packaging board sector.
PM: Would you like to give any advice to your peers in the industry on the market front?
PSP: Yes! The market is very good and others should also avail the opportunity and expand as much as they can. They should focus equally on the products, quality, and service, which we at Emami Papers do. We have gained immensely from these practices, giving us courage and capability to expand further. The focus on technology is equally crucial for responsible manufacturing keeping environmental compliance and regulations in view. We need to strictly follow the prescribed consumption and environmental standards in order to avoid future troubles.