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An Unexpected Discovery Pushes ABC into a High Capability Orbit

In their search, ABC Paper chanced upon a machine which they had not initially planned to study. With this addition, the company is entering a turf of increased capabilities.

 

Mr. Pawan Khaitan
Mr. Pawan Khaitan

ABC Paper has acquired a previously owned Beloit machine from Georgia Pacific. The machine, earlier upgraded in 2001 and 2005, has a deckle size of 3.87 m, production speed of 900 mpm and installed capacity of 225 TPD. ABC has undertaken substantial re-engineering and up-gradations in the machine’s components and auxiliaries. These upgrades will allow production of 280 TPD, rendering 2-3 existing machines inoperative due to lack of raw material. Before this expansion, ABC was producing 100-150 ton a day, which ABC planned to double. July has been slotted for the trial and commercial production.

The estimated cost for the entire project is INR 1.97 billion including paper machine, wood pulping street, power plant, and chemical recovery plant. The company had already commissioned a 10 MW power plant in January. ABC has supplied and overhauled DCS and automation components. The upgrades will enable ABC to produce a high quality product, with improved speed and efficiency.

The Tale of ABC’s Discovery

After having visited various facilities in UK and Germany, ABC went to the Portland premises of Georgia Pacific, where they had initially planned to view a closed machine. Mr. Pavan Khaitan trivially asked if they could purchase a nearby operational machine. In a subsequent discussion regarding the machine, ABC learned that they were planning to halt its operations within a month. A deal was immediately struck for the running machine. In Mr. Khaitan’s words, “It was a question of being at the right place at the right time. After having looked at 4-5 closed machines, it was easier to opt for a running machine.”

Stressing on the industry’s future challenges, Mr Mr. Pavan Khaitan stated, “Fiber sourcing is going to be a big challenge for the industry along with increased raw-material and energy cost. Moreover, the demand of paper will be sluggish. There will be over capacity in the industry in the short term. These factors will put pressure on the pricing. All aspects have to be looked at very critically. You have to monitor your operations very closely and see where you can make improvements in the value chain in order to optimize costs. So, I hope lot of focus will be given to sourcing of raw material.”

Expansion Plans

This machine will position ABC onto its next phase of expansion, which is to increase production to 450 TPD within the next two years. The further expansion will require installing additional pulping capacity.

Previous plans to construct a plant in Western or Central India were cut short when ABC gauged the existing industry scenario. The company thought it wise to consolidate and optimize current operations before undertaking further expansion plans.

Raw Material

ABC has an existing capacity of 160 ton agro pulp, and is installing a 60 ton wood pulping street. In addition to this, the company will buy softwood and hardwood pulp. The raw material mix will be 60% agro and 40% wood pulp. Due to an insufficient supply of agro-residues, ABC will have to look for a good wood source or recycled fiber material.

Products & Market

ABC will, for the most part make Maplitho grade on its new machine. To retain its premium quality creamwove market, ABC will also manufacture this grade on the new machine. ABC will also be targeting the value added products segment, by making good quality Copier, which is now possible with sufficient supply of wood pulp. The copier will be marketed under its own brand, while conversion requirements will be outsourced.

Environmental Concern

ABC has undertaken an ecologically conscious initiative by using agro-residue. This move is designed to reduce consumption of wood in production, as well as prevent pollution due to burning of agro-residue. Also, ABC has invested in an effluent treatment plant, and entered into a joint venture  with Swiss company to recover lignin.

Management Style

ABC believes in taking a bold, intrepid, and risk-taking approach in its undertakings. In the days when the company was known as Amrit Banaspati Company Ltd, it had gone through a period of stagnation. The responsibility to revive the company was given to Mr. Pavan Khaitan. He courageously decided to undertakemajor investment, which stimulated and renewed the company. Mr. Khaitan also believes in teamwork, and maintaining good professional relations with his team.

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