Interview with Mr.Mukesh Jain, Executive Director & CFO
Andhra Paper Limited is one of the largest integrated paper and pulp manufacturers in India and the only one in the state of Andhra Pradesh using virgin pulp.
Paper Desk : Could we know more about the history of Andhra Paper Mill and its recent developments?Mukesh Jain : Andhra Paper Limited (Company) is one of the largest integrated paper and pulp manufacturers in India and the only one in the state of Andhra Pradesh using virgin pulp.
The history of the Company goes back to 100+ years when the company was set up in 1921 as Carnatic Paper Mills Ltd. In a few year span the Carnatice Paper Mills was shut down because of insolvency and revived as Andhra Paper Mills Co Ltd in 1929. Since then the Company has moved in multiple hands from Govt of Andhra Pradesh in 1953 to the industrialist, Mr. G. D Somani to West Coast Paper Mills Ltd to Digvijay Investments Ltd.
In October, 2011, the Company was acquired by International Paper (IP), a Global giant American pulp and paper company. This was a first significant domestic acquisition by a foreign paper company in Indian History. In October, 2019 the controlling stake in the Company was acquired from IP by West Coast Paper Mills Ltd. (WCPM). WCPM, a part of the industrialist of its fame S.K. Bangur, is one of the oldest and the largest producers of paper in India.
In the year 2000, company gave a new life to a sick company Coastal Papers Limited by acquiring controlling stake. This unit is called as Kadiyam Unit and Mother unit is called as Rajahmundry. The Rajahmundry unit is an intergrated pulp and paper manufacturer and we supply pulp to Kadiyam unit. The Kadiyam unit also manufacture waste paper based recycled pulp. The production capacity for both the units put together is 255,500 metric tons.
“The company has been a pioneer in various fields, which has immensely benefited the entire paper industry”
PD : What are your company’s principles, mission & vision?
MJ : 1) We fulfil our commitments with the highest ethical standards.
2) We focus on superior results to create value for our shareholders.
3) we are responsible towards our environment and our community.
Company Mission & Vision: To become the top performing and most respected paper company in India. Company’s culture & values given to your employees: The Company recognises the value of an efficient workforce. Andhra Paper Limited invests in hiring and retaining individuals that can effectively contribute to the growth of the Company. It undertakes effective talent management strategies, leadership succession, planning initiatives and organizational assessments to maintain the skill and competency of its human capital. The Company follows the 3C rule-Character, Capability and Catalyst. This rule is integrated into the process and tools for employee development, ensuring the employees are aligned with the Company goals. The Company also uses career planning and training and skill development initiatives to strengthen its human capital and build a strong organization.
The Company prioritizes the safety of its employees. The Company fosters a positive work environment that does not discriminate on any grounds. It also ensures no sexual harassment at work.
PD : What are all the papers manufactured by Andhra Paper?
MJ : We produce a diverse range of writing and printing papers, packaging boards and specialty papers. These products are available in a variety of grades and finishes to perfectly suit writing, printing or packaging needs.
Writing and Printing: As a one-stop shop for premium writing and printing paper solutions, our focus lies on crafting exceptional quality paper. Our papers are used in notebooks, diaries and for vibrant colour printing.
We also have a diverse range of paper specifically designed for professional applications, for use in journals, textbooks and reference books. Additionally, our papers are ideal for printing calendars and fulfilling other commercial printing needs.
Copier: We offer a complete range of office papers, from budget-friendly options for everyday use to premium grades for a luxurious touch. Our papers provide exceptional brightness for crisp, professional quality documents. It is also engineered to run flawlessly through any office equipment, from photocopiers to multi-functional devices, enabling high-volume printing with ease.
Specialty Papers: We offer high-quality specialty grade paper. These custom engineered varieties cater to diverse applications and can be used for printing high resolution photos to creating innovative and functional packaging solutions.
PD : Do you produce recycled papers or virgin papers or both and which market is challenge-able & why?
MJ : We manufacture both virgin paper and recycled paper. Our recycled paper is just 10-15% mix on total production. The price realization for recycled pulp based paper is lower than virgin paper and we have a high challenges on recycled paper because of high competition.
PD : How do you differentiate & describe the products you are selling to foreign and domestic markets?
MJ : We offer all tailor made customised products that suits for our esteem customers. Most of our export are for African countries and the market requirement for those countries are for note book segment which is a cream wove segment of paper made out of mix of virgin and recycled paper based pulp.
What kind of specialty papers produced by Andhra Papers such as custom engineered to suit specific and diverse range of applications?
MJ : Some of the specialty paper we produce which are custom engineered to suit specific and diverse range of applications are Andhra Cup stock, Andhra Carry bag, Andhra Pharma Print, Andhra Thermal base paper, Andhra Colour poster paper, Andhra plain kraft, Andhra Straw paper and Andhra Sketch choic.
PD : How important is the QC for a paper manufacturing company and how do you assure the quality consistency of your products?
MJ : The Company sustains its core belief in “Customer First” and its endeavour to create value for the customers, “Serving you with pride”. The Company remains focused on delivering high-quality products and value for money for our customer. The Company’s fundamental value of “Think Customer “continues to produce desired outcomes to augment customer value by way of offering “right products for right applications’ at an amplified speed to meet customer requirements. All these are becoming possible because of a strong Quality check system in place.
We follow multiple level of Quality check through automated checking QCS and through manual checks. We carry multiple samples checking to make sure we feel pride of what we are delivering to our customer.
PD : May we know about your environment management policies?
MJ : The Company’s vision is to become the top performing and most respected paper company in India by integrating Environmental, Social and Governance (ESG) principles into its growth strategy which is central to improving the quality of life of the communities it serves.
As an organisation, APL is committed to integrating ESG into the organisational culture. The environmental impacts cover Climate, Resources (Energy, Air & Water) and Waste Management. The Company has committed to reduce its carbon emission and has established policy for Quality, Environment, Health and Safety. The Company is committed to conducting fair business practices to the labour, human capital and to the community. It provides employees and business associates with working conditions that are clean, safe, healthy and fair. It strives to be neighbour of choice in the communities in which it operates and contributes to their equitable and inclusive development. To deliver these commitments, the Company has separate CSR Policy, Human Rights Policy, code of conduct, ethics policy. It is our constant endeavour to deliver products and services of the highest quality to our customers while ensuring minimal harm to the environment and society. Our robust business model, adoption of emerging technology and automation, brand strength, and customer-centric approach back our robust economic performance.
“We promote environmentally & socially responsible business practices by assessing and mitigating the environmental & social impacts on sustainable economic growth“
PD : What are your other group companies?
MJ : Andhra Paper Limited is a subsidiary of West Coast Paper Limited. We do not have any other business entity as a subsidiary or associate for Andhra Paper Limited.
PD : Future business plans?
MJ : Tissue Project: The Board of the Company has approved the proposal of installing a new tissue machine with capacity up to 35,000 TPA to produce various grades of tissue paper such as facial, napkin, toilet and towel grade tissue papers which has optimum demand in market.
Green Field Expansion project: In January, 2023 the Board had given in-principle approval to exploit opportunities in Paper Board Segment through expansion and capacity addition by setting up an integrated Green Field Project at Unit Kadiyam, East Godavari District, Andhra Pradesh. Proposed Mill Expansion Plan (MEP) with Installation of 1,75,000 TPA Paper Board Machine, 1,60,000 TPA Writing & Printing Paper machine, 1,92,500 TPA New Chemical Wood Pulp mill and 87,500 BD TPA BCTMP connected along with Recovery Plant (1500 TPD of BLS) and Expansion of Co-generation Power Plant from 5.74 MW to 94 MW with New Coal fired Boiler and New TGs and auxiliary facilities in the Existing Paper Mill at Unit: Kadiyam.
In this regard, the Company has filed the requisite application with the Ministry of Environment & Forest for Climate Change (MOEF) for Environment Clearance.
PD : Challenges or Competitions you are facing in Indian Market?
MJ : One of the biggest turbulence the paper industry is navigating through is the availability of raw material. It’s been a perennial challenges for Paper Industry, there is a scarcity of raw material with the waning forest resources and limitations on man-made forests. This gash has aggravated since last one year because of drop in cultivation during pandemic period. The Indian paper mills have been constrained to adjust their prices due to the volatility in imported materials, currency fluctuations, substantial increase in production costs, logistics challenges etc.
There is a rise in import from ASEAN countries because of free trade agreement. This rise in import has proven to be a noteworthy threat for the growth of the country’s paper manufacturer.
PD : How do you forecast the Indian paper market in coming years?
MJ : Today the paper stocks have been among the top performers on the back of robust demand, consolidation in the sector and the ban on single use plastic. The paper industry in India accounts for about 5% of global paper production. The estimated turnover of the industry is over ₹ 80,000 crores, with a contribution to the exchequer of approximately ₹5,000 crore. The industry directly employs around 500,000 workers and indirectly employs nearly 1.5 million.
The per capita paper consumption in India marginally improved over the years to 15kg at present, which is way behind the global average of 57kg. However, India is the world’s fastest-growing paper market, presenting an exciting scenario wherein paper consumption is poised to take a significant leap forward in tandem with economic expansion. The growth in paper consumption is estimated to be in multiples of GDP and hence an increase in consumption by one kg per capita would lead to an increase in demand of 1 million tonnes. We can assume the growth in Indian paper manufacturer for atleast next 15 years.
PD : What is the actual scenario for paper sustainability in India and how to make the same more sustainable?
MJ : There are three scenarios for the sustainability of Paper in India, sustainable forestry, reduction in consumption of water and energy efficient low cost production processes.