Mr. Harshpati Singhania - Managing Director JK Paper Ltd

Mr. Harshpati Singhania, Managing Director, JK Paper Ltd during his inaugural speech at IPPTA annual seminar held on 1st March 2012, in Kolkata, enumerated certain points where Indian paper industry has to look upon immediately like human resource management (HRM), sustainability, technology in order to meet its projections of 20 million tons by the end of this decade. He began his speech by giving the strong fundamentals that are pushing the demand of the paper, on which he said “the usage of high speed printing and copying paper machines are propelling in demand for high quality writing and printing paper. Simultaneously the change in the lifestyle, increase in demand of consumer goods and expansion of organized retail has led to the increased usage of high end packaging board.”

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Addressing the audience on other points he said: The demand projection of the India shows that we are growing rapidly and likely to double our annual requirement from 10-11 million tons currently to about 20 million tons by the end of this decade. To achieve this, we have to entail substantial capacity additions and more importantly the investment will have to be made in modern machinery that incorporates high end technology. And, it is imperative from many reasons for instance to meet the requirements from increasingly demanding consumers for better quality, conservation of scare resource like water and energy etc.

On the path of growth and development, sustainability is very important which engross cutting down the cost and also to meet stringent emission standards. Today the new paper machines that are coming in India have broader widths, faster speeds, better automation and sophistication with state of the art equipments like shoe press, new generation calendars etc. I believe this trend will definitely accelerate but the challenge, which is in front of us, is how to absorb this technology. Today, machinery comes with the certain degree of embedded technology and we need to have certain scale and size to absorb this technology. It’s not just because of the volume reasons but also to meet the challenges of sustainability in terms of being able to minimize cost through energy, water and other resource conservations by applying good technology.

Now coming on to the human capital which everyone sitting here believes is very critical for the growth and development of the industry. We can buy machinery with money but not the human capital. We need to have high caliber workforce that is both talented and skilled and it applies both to technologists as well as to the operating crew at the shop floor. My apprehension is that the availability of high caliber and trained workforce will become a major constraint in the development of the industry if we don’t take adequate measures to address this issue. At present attracting new talent as well as developing the existing talent will have to take the center stage. To attract new talent we need to create well defined opportunities and compensate them adequately. The people whether new or existing talent must be trained properly on how to operate the high end technology. For this they can be trained with the help of leading technology vendors like Voith, Metso, Andritz etc and even with people who are involved in automation like ABB, Yokogawa, as all these things are integrated in a paper machine. People trained then can become internal trainers for other people.

Most importantly the industry has to change its mindsets. Clearly we need to give up the attitude of “chalta hai” if we have to operate on sophisticated high end technology to meet our requirements. More of rigor and discipline has to be inculcated in the workflow. I always look at the example of airline pilot, before flying any plane he has to perform all the checks, though he may have flown thousands of hours and hundreds of flights but he has to perform all the checks because of the system that has been created and that is what we need to apply to our operation and the way we operate. The air of fresh thinking has to flow on the way we deploy our workforce. A minimum prescribed qualification for the workforce has to be pen down like operating crew on the shop floor has to have at least an ITI certification if not a diploma. Similarly we need to decrease the layers in the hierarchy and have flatter organization structures for the smooth flow. If you visit any mill abroad one thing that will strike you is that where are the people and in India you go to any paper mill you see people crawling all over. So I believe some of these people have to be curtailed and gradually be eliminated. If many countries in the world can manage without them and can have multi-skilled workforce, then why can’t we? I believe it is we the managers who are often the biggest bottlenecks, as we are not convinced that we can operate in a different way or without the whole ladder of people. The idea is not just to reduce the manpower it is the matter of running the whole organization in much more efficient way. Just a few trained, knowledgeable and skilled people can bring the difference by running these high end machines rather having 100’s of people. This is something where industry has to think that to what extent the change has to be brought in.

Another point I would like to put forward is that we need to think about outsourcing the maintenance and other day-to-day activities to the third party. This concept is fairly low in priority in the Indian paper industry. Being a paper company we need to focus on our core manufacturing activities. There are already many success stories available in this regards from other industries in India but the issue is how we can learn from them and can adapt them to the paper industry. The models have to be rearranged to suit the aspects of the paper industry like most paper manufacturing facilities in India are located in the remote areas. We must develop parties who will execute outsource services and maintenance for us. We need to provide them with adequate business otherwise they will not survive. To enable this, paper industry may have to release some of the experts to these vendors. I would also like to invite the global vendors to set up shop for this in India.

Before concluding let me turn focus on the issue that has been given low priority in the Indian paper industry, which is wet end chemistry. It is changing with a great pace and is a weaker area for us where we must apply our technical mind to see how best we can use it to our advantage in improving product quality and reducing cost. I hope this area will get the much needed prominence and will get deliberated as often the focus is more on how we can get better machinery.

Mr. N.K. Jain - Director (Sales) Metso Paper India Pvt Ltd.

Metso’s presence in India was felt with its first pulp mill order from JK paper in 1995, which got commissioned in 1997. Then it was a flurry of orders wherein they supplied there technical capabilities in the form of pulp mill to ITC, Trident group, TNPL, West Coast Paper Mills and Century Pulp & Paper. India being on the growth path is now a desired destination for everyone in the world and each one is eyeing on to have the share in this market. And, Metso wants to participate in India’s growth story as a strategic partner. So to take a bird eye view of Metso’s overall plan for the Indian market with regards to its technical capabilities, service support, value added services team Paper Mart interacted with Mr. N.K. Jain, Director (Sales), Metso Paper India Pvt Ltd who also gave his views on the Indian paper industry practices and highlighted certain challenges of the industry. Excerpts

Metso’s Technical Fortitude

At present, energy, water & environment are the major concern areas of the paper industry worldwide and this is where Metso play its role in providing the technological breakthroughs for the industry. Our innovative process solutions and superior product technologies ensure the continued success of our customers worldwide. When it comes to rebuilds and upgrades we always develop our concepts in cooperation with the customers. This ensures the right results, with the right effort, at the right time. Metso supplies full scope of technology and expertise covering a wide range of process and machine designs for all paper, board and tissue grades.

Metso puts continuous effort to provide the technical excellence and experience to the industry. The result of which is our new modular machine concept, which provides an easy and convenient way to improve operational efficiency at paper mills. Ready-engineered packages offer low risks and a minimized cost per ton start-up for mills striving for higher technology levels. The modular concept allows for an optimized investment and operating costs with a short investment payback time. It ensures a secure way to future upgradability. On the modular machines, you can opt for capacity from 150,000 to 200,000 TPA, which is quiet economical and relevant for the Indian market too.

At Metso, we provide a full range of customized support services to our customers such as process analysis, studies, troubleshooting and operator training. We conduct many educational courses online and offline that provide project-based training. We have online portals where our customers can access the information. During the analysis of KPI’s (key performance indicators) our team can connect to our experts worldwide and put up their queries. And, based on the analysis they evaluate the capability, strength and weakness. And based on those strength and weakness, online or offline training is imparted. On the other hand we send our experts in the mill, who train the operating crew in order to improve their overall capability.

Today we have the full capacity and capability along with modern technology to deliver engineering excellence in such a way that it fits to the Indian market.

Challenges for Indian paper industry

Being a fragmented market Indian paper industry has many challenges. As far as I believe raw material is a challenge but it should not be a major constraint. The major barrier is under developed infrastructure, which affects both input and the output cost. The difference between China and India is the availability of infrastructure and that is why China can afford to have large scale of paper machines and pulp mills. Whereas in India if anyone plans to go for 300,000 tons of pulp mill based on the imported wood chips it’s not possible because the ports here don’t have the capacity to handle that much amount. The road and railway networks are under developed. On the other hand when it comes to capital, the interest rates are too high in India.

Metso’s value added services for the Indian paper industry

We cannot do anything on the infrastructures front but we support our customer in all the other arenas like talent management, training, improving efficiency etc. Today we offer value added services to our customers like performance based maintenance. A service agreement with us puts the focus on the measures required to keep the mill or plant fit and profitable. Inspection and troubleshooting become an inherent part of a strategic, long-term program for keeping the plant competitive. We are here to support the Indian paper industry whether it is a big mill or a small mill with our service solutions.

Metso’s Plans for India

We have quiet aggressive plans for India as a part of which Metso’s single largest Greenfield investment; “Metso Park” is coming up in Alwar, Rajasthan. It will be built with state of the art utilities, spanning over 47 acres.

Metso is serving its customers through a network of eight business lines, which are organized into three segments i.e. Mining and Construction Technology (MCT), Paper and Fiber Technology (PFT), Energy and Environmental Technology (EET). But on January 1, 2012, Metso’s power business line and paper and fiber technology got merged to create a new Pulp, Paper and Power (PPP) segment. This will provide us with great opportunities for even stronger growth in the pulp and paper industry power generation business. To serve the customers in a better way we have a plan to establish a workshop in our Metso Park, which is in quite advanced stage.

We have a strong engineering setup at Gurgaon and Chennai office for project handling. Through our talented technically oriented workforce we provide service support from start-up to commissioning. Providing the after sale services is what we are keen on like performance based agreements. Besides, in the near future we are open for JV or acquisition to have quick presence in India.

Views on the Indian paper industry practices

My answer will be related to different subject matter.

A decade ago people never thought to invest on pulp mill, they use to say that paper is made in a paper machine, but I always said that paper is being made in pulp mill and then we have seen companies investing in world class pulp mills in late 90’s and afterwards. Now on the paper machine side also people have started thinking to buy new machines, which can provide those economies of scale and sustainable operations. And, most importantly this thinking has to be supported by apt technology. But still there is lack of confidence that exists and which keeps them aback from investing in good technology. The result of which is visible at the time of crisis where people are not able to handle the situation and just by using “jugaad” system they try to fix it and they end up losing more money in the long term. None of them thinks about the effective cost but what they think is to minimize the present cost which is a bigger loss.

Efficiency is another thing, which is the need of the hour. Mills need to be efficient in their day-to-day operations. Generally people say that we have achieved 80-85% efficiency in a particular area of the mill but we say why can’t you have 90-95% or may be 100%, what is the bottleneck in achieving this. So, this is one important area where the drill has to be done.

Image makeover of the paper industry is another important issue, which I believe hasn’t been taken seriously. Paper is biodegradable, environment friendly then plastics and is produced in a sustainable manner. But this message must come from the industry as a whole. The mills should not tell their individual USP rather they should talk of the industry as a whole that our operations are sustainable and eco-friendly. We are producing these papers by adhering to environmental norms.

On vendor-customer relationship the entrepreneurs have to change their mentality. Today you need to have a right partner to run your business. At Metso we always say, we don’t work as a supplier we work as partner. We respect our customer’s profitability because when the customer will earn then only we can survive. The mills should be fair to suppliers it’s not that being a supplier the headache is all mine. I always stress upon this point to our customers that we cannot do this alone you need to handle the equipment with best ability and appoint right people to run them. We can only teach them how to behave but ultimately they have to take care of it as their baby.

Mr. Datta Kuvelakar - Head of Forbes Marshall Limited.

Energy efficiency the buzzword of the 21st century is the key priority for everyone. You have to use your resources very efficiently in order to be profitable. Energy is one such resource that is scarce and has to be used efficiently. Though there are alternates that are available but either they are not viable or expensive. So you are left with one choice to use what you have, to the best. This is where company like Forbes Marshall comes into picture to help you achieve process efficiencies. To know more about how Forbes Marshall can help the Indian paper Industry to tackle there energy issues team Paper Mart interacted with Mr. Datta Kuvelakar, Head of Forbes Marshall Limited. Excerpts

Paper Mart: Your company tagline says: “Trusted Partners, Innovative Solutions” kindly elaborate your company philosophy?

Datta Kuvelakar: Forbes Marshall has been serving the pulp and paper industry with an intense focus on energy efficiency since the last 7 decades. We have constantly evolved the solutions that provide customers with sustainable benefits. The knowledge, services and products are based on each customer requirement. Then our solution engineers create innovative workable solutions that will have a positive impact on the customer’s fuel bills. With a dedicated and focused work on energy efficiency, we have become our customer’s partner for whenever they seek energy efficient solutions for their existing plants or new green field project. Thus it’s the work that we have done in the past and our emphasis on strengthening this for the future decades makes the tag line “Trusted Partners, Innovative Solutions” not merely a tag line but something that we live by every moment.

PM: Forbes Marshall has evolved into a leader in process efficiency and energy conservation through technology tie-ups and focused investments in manufacturing and research. Comment

DK: Innovative solutions need constant rethinking on our technology platform. Customer needs drive our product offerings. This demand makes us to strive constantly and devise new and better ways of providing energy efficient solutions. Being pioneers in the business of steam engineering, we constantly raise the bar for energy efficiency benchmarks. Customer expects us to deliver the best and most innovative solutions. Thus it’s the customer need and expectations that drive us to make investments in manufacturing and research. This helps us remain at the top of our business expertise and helps us constantly to provide world class quality with world beating standards of energy efficiency.

PM: Energy is one of the most important inputs for any industry. How the paper industry can become more energy efficient?

DK: With our regular energy audits we have always discovered that there is potential of saving 10% to over 25% energy in pulp and paper industry. The most essential step in becoming energy efficient is to create more awareness of potential opportunities that are not generally visible. Thus our role is to ensure that we create substantial awareness about energy efficiency and infuse the knowledge through the ranks in the pulp and paper mills. The second aspect is to actually deliver energy efficiency, which is also an area where Forbes Marshall specializes through doing energy audits and then subsequent implementation. Energy audits that deliver “real” benefits has become our forte.

To be more specific on the opportunities for thermal energy efficiency that would come from taking necessary action like running the boilers at peak efficiency thereby saving fossil fuel. This would come from minimizing various heat losses in a boiler from stack loss to blow down loss. Another is to maximizing condensate evacuation from paper machine driers. This has a double effect of enhancing heat transfer and reducing steam consumption and also reducing fuel consumption due to higher feed water temperatures. And, finally having good housekeeping practices in the entire utility network to control leakages and drain losses.

The concept of a “zero vent” mill is something that we strive to reach in our efforts to minimize energy consumption. Maximum condensate recovery and minimum flash vent is a concept that we target for each an every paper mill.

PM: What kind of innovations Forbes Marshall has to offer to the paper industry in case of energy efficiency?

DK: Forbes Marshall has introduced several innovative concepts to enhance energy efficiency in pulp and paper mills. Some of these are:

• Effimax - the world’s only online boiler efficiency analyzer that provides diagnostics for maximizing energy efficiency. This has won the CII most innovative product award.

• The wireless steam trap monitoring system - this system is used for paper driers to provide diagnostics on condensate condition inside driers.

• Smart Thermocompressors - Thermocompressors that not just entrain low pressure waste/vent vapors but they do it with powerful diagnostics that help sustain the energy efficiency.

• High dew point and smart high quality completely closed hood and pocket ventilation systems with real time control of critical parameters. The world’s only touchscreen controlled hood and PV system.

• Packages that help customers not just dry paper but also maintain quality in terms of basis weight and moisture. All leading to better control on process and thereby lower energy consumption.

The concept of an integrated & smart energy management system based on a seamless package of products and services are the basis of providing energy savings to our customers.

PM: “Partnering with companies to cut cost, increase energy efficiency and reduce energy consumption”. Kindly share your modus operandi, which helps you execute this?

DK: The methodology of partnering companies to cut cost, increase energy efficiency and reduce energy consumption is based on simple principle of identifying problems in client’s processes and sources of energy wastage. We start with a simple process survey and then to a more detailed process and energy audit, which then leads to actual implementable and solid results on energy conservation. Thus the very simple step of surveying a customer’s plant to identify what can be improved is the base for all our energy conservation activities.

Mr. Pascal Granseigne (Director – Industrial starch business unit) Roquette

The Roquette group, a leading global producer of starch products marked its presence in the Indian paper industry in 2011 to meet the concerns in wet end, surface sizing or coating and working together with those seeking to enhance productivity on corrugating or gluing sacks. Ever-increasing energy costs, the origin of raw materials and environmental policies are the three main paradigms faced today by the paper makers. Roquette actively participates in these industry efforts and development policies by supplying biodegradable polymers made from renewable carbon sources to replace as much as possible petrol chemistry and ‘classical’ chemistry, increase process productivity and create energy savings. In a candid chat with team Paper Mart, Mr. Pascal Granseigne (Director – Industrial starch business unit), Roquette enlightened us about their presence and operations worldwide, the use of starch and its benefits and above all how Roquette can help the Indian paper industry through its value added products and services.

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Paper Mart: How starches can help paper makers to improve their environmental footprints?

Pascal Granseigne: During the recent past years, Roquette has developed new starch solution to be used as binder to replace latexes in coating colors or starch based polymers able to replace current anionic trash catcher or strength polymers. A new chemistry based on renewable carbon source is now available and can help the paper makers to reduce carbon footprint.

Industrial example on chemistry based on renewable carbon source for Sanitary towel virgin fibres

In this paper mill, the anionic biopolymer is introduced to the fan pump, just after the WSR (machine chest). These figure hereafter shows that not only the chemistry has been improved, but also the direct effect in a better working order of mechanical properties. On this machine, it was possible to avoid breaks and reduce the overall amount of WSR resulting in cost saving and less chemical used.

PM: Being a starch expert, in your perspective how you can add value to the Indian paper industry?

PG: Our range for paper industry is very large and they are cost efficient with any sort of fibers (long, short or specific like bagasse). We are also producing some tailor made products for small production capacity allowing them to reach the quality standard of large paper machine. In general our strategy will be to help customer to be consistent in the paper quality all along the year whatever the quality and variability of the raw material he uses. Our focal purpose includes studying and manufacturing of turnkey installations and then adapted to the client process, offering the products suiting to project and then following-up and assisting them in implementations. We have some value added products like pea starch that can add value to the production. For example:

VECTOR® N Range has demonstrated its performance in terms of productivity for double and triple wall production. Lightweight double-wall to heavy triple-wall production speeds can be increased by 20 % to 100 %, with a corresponding increase in productivity, as shown in the examples below:

PM: Brief about Roquette and its offerings for the Indian paper industry?

PG: We are number 2 in Europe and top 4 worldwide in the business producing the starch for the various industrial applications. We have 18 facilities around the world to support our customers. We basically convert four vegetables maize, wheat, potatoes and peas, into raw materials essential to industry. The starch extracted from them produces more than 700 by-products. Our resources include the best in high-quality range for wet end cationics, 70 technical engineers on the field, pilot labs in France and China, starch handling and cooking equipment department, continuous development of new innovative environmental-friendly ranges, large base of raw material to give secure supply to all our customers.

VECTOR® N-7152 in comparison to potato starch

Our offering to Indian market includes the most modern starch technologies that will provide certain benefits like increasing the filler content by boosting retention, save energy by promoting new type of glue in corrugated industry or new type of cationic polymer in paper and tissue industry, reduce cost of paper production by offering alternatives to petrol chemistry (latex) or conventional chemistry and ultimately enhance paper machine productivity.

PM: What strategy does Roquette will adopt for the Indian paper industry?

PG: Roquette is relatively newcomer to the paper business in India and would like to place emphasis on understanding the specific needs of the Indian paper industry. Therefore listening to their needs would be a very important exercise and then to customize our large range of starch products and 40 years of experience to adapt to the Indian market. Globally we are not only providing starch to our customers but also helping the paper maker to handle and cook starch up to the paper machine, advising proper cooking parameters and or injection points in function of the need of the customer. We are also able to deliver equipment like jet-cooker, enzymatic conversion or glue kitchen.

Mr. Renato Duranti Director - Sales, Milltex S.p.A.

“When paper is manufactured at paper machine then it is cut in desired shape and weight. Reel is cut on the rewinder and sheets are cut on sheet cutter. After checking the quality of paper it is packed according to demand of consumer.”

Reading the above lines seems that finishing is a very simple task. But that’s not true it is a very important and a critical exercise because that determines the result of your hard work. Being the last exercise in the paper manufacturing it demand extra focus, attention, detailing and every possible step to make it a success. A small haywire will bring down the value of your investments. During the interaction with team Paper Mart, we asked Mr. Renato Duranti, Director – Sales, Milltex S.p.A., a renowned supplier of machineries for finishing houses to highlight the importance of finishing house and how paper mills in India can benefit by installing good machineries at their finishing house along with the challenges that are being faced today.

Paper Mart: Finishing section is one area, which seems to be neglected in many Indian paper mills. Your views on this current situation

Renato Duranti: In the present market situation nobody can neglect the finishing house, as competition is very tough in terms of quality and timely delivery of the material and tailor sizes. Market will not accept any size variation, rough cutting, marking, uneven dressing etc. To achieve all these quality parameters finishing house needs to invest in machineries with high precision technology. Even for reel order the quality of the cut, winding, length of the reel also plays very important role. If there is unevenness in the reel then there will be issues in running the reel on the printing machine, so investment in good quality rewinder is also important. Presently demand of copier paper is rising so a good quality sheeter and packaging line plays an important role. Other than all the above quality parameters finishing house machineries in terms of production is also very important to cope up with the market demand and to handle huge production coming from the paper machine. We must always keep in mind that the printing industry is running much ahead as compared to the paper industry all over the world in terms of adapting automation, increasing printing speeds and quality requirements. Hence paper industry has to be watchful and aggressive to adapt to challenges ahead and make their investments accordingly. I was very surprised to hear from one of the Indian premium board company, who told that the 70% of the quality complaints that they used to receive were due to the finishing house. So it says of its importance!

PM: What action plan you would suggest to the Indian mills irrespective of their size & scale and product manufactured?

RD: Before finalizing the machineries for finishing house first and foremost thing is to properly design the layout for finishing house, because without this there are chances of jamming and chaos at finishing house for which may be sometimes paper machine has to stop. After that, finalization of the machineries is required as per the parameters mentioned above. In India generally the manufacturers face the severe crises of small order quantities. So a major decision must be taken in light of this challenge that only small sheeters may be bought or not? The usual sizes which industry buys are 2.8, 2.4, 2.2, 1.9 meters. It would be good idea to buy more number of small sheeters rather than buying one large sheeter.

PM: ROI is the first question before finalizing a technology/equipment. Kindly justify the value on investment in the finishing section for the Indian mills.

RD: Earlier paper machine were running either with machineries taken from local manufacturer or second hand machineries from aboard. But, looking into present market scenario, to achieve quality parameters and precision machineries with high speed is important. Presently production from high speed machine is 3-4 times higher than the low speed machine. So, there will be 3-4 times less manpower requirement and power consumption than earlier machineries. So when paper mill will calculate the ROI in terms of power saving, premium for quality product, access to export market and manpower saving then automatically they will understand that investment in high technology machineries are worth it.

Mr. Sim Boon Kiat, Group VP, Head of ABB Global Pulp & Paper Business

At the start of the conversation Mr. BK Sim gave the synopsis of strengths that ABB brings to the pulp and paper sector: the biggest strength that ABB has is its tremendous offering for the pulp and paper industry. We have a team of people who can talk pulp and paper making and you will not see too many of the suppliers in this industry that can do that easily. The competence level varies between countries and it takes years to accumulate that kind of knowledge. But ABB has the stamina to perceive and adapt to the local conditions. India with the population of more than a billion people represents huge opportunity to grow and we are here for the long haul. Our main focus is on providing the special services which is not there in this country today; we really stand up for those value added services so that mills can improve their productivity and quality. For example we have more than 150 people giving service to US paper industry, now we are trying to build similar expertise over here so that those services could also be offered to all of our customers. We are continuously adding to the pool of technical, competent, experienced and highly committed people to serve our customers. Our way of doing business is value-based, leadership-driven and performance-oriented.

Mr. KVS Rao, VP, Head of business Unit - Cranes, Marine, Pulp & paper

Commenting on the advantage that has helpe ABB in getting the order from JK Paper Mr. KVS Rao said: We have been doing our homework from day one when the JK Paper project was officially announced, couple of years back. The main factor that helped us getting the JK project was our total comprehensive offerings in terms of providing end to end solutions. In this project we’ll do the basic engineering, supply & install the equipment and commission them. In this project there are only 3 vendors i.e. pulp mill vendor, paper machine vendor and one common electrical vendor which is ABB and this is where our strength lies, in providing a wide range of solutions for the varied needs of the projects.

Mr. G Srinivas Rao, Asst. VP, Pulp & Paper, Marine & Cranes Process Automation

Explaining how ABB adds value to the entire chain of paper industry ranging from large to medium size mills Mr. G Srinivas Rao said: Earlier we were focusing on only on tier 1 segment in the paper industry but from the last 4-5 years we have moved ourselves to the tier 2 segment mills by expanding our product portfolio. At present we sell almost 5-6 QCS equipment to the non-integrated mid-sized mills. We are trying to provide the same value to the smaller mills as we are giving to the bigger mills. We are hoping that in coming days we would be able to provide our technological excellence to the mid-sized mills. We are committed to the whole Indian paper industry and not limiting ourselves to only big mills.

Highlighting the product development activities at ABB to support pulp and paper sector Mr. BK Sim added: R&D is a continuous process at ABB. We spend a good amount of resources on product development like quality control systems, scanners, sensors etc. in order to provide better products to our customers. We strongly believe that if we stop spending on R&D then the future will be bleak. We use our domain knowledge of pulp and paper to build the systems, first integrate all the things and then form the component. One thing that keeps ABB on its toes is to provide the value added services to all our customers along with our standard offerings. So it is a lot of globalization plus the domain knowledge that is pushing us consistently to develop lot of products.

On the topic of customization Mr. BK Sim told: cost is always important to every project therefore localization is very necessary. Right now we are just providing the tailor made solutions for the Indian mills according to their requirements. Adding further Mr. G. Srinivas Rao said whether it is an A grade mill, B grade mill or C grade mill, we are giving the same DCS/QCS & PM drive systems to all of them. We have developed specific software for pulp and paper like pulp and paper libraries which can be used by mills having our systems irrespective of the size. We give common logic or solutions to everyone but the only thing is that the saving can be done in terms of add on features. We don’t play around with our offerings we can only cut on the certain additional things to fit in to the budget and suit to the customer requirements.

“Expanding the market footprint is imperative for ABB and we are now serving Middle East & Africa which is also growing at a good pace. Earlier we were providing support service to Middle East from India, but now we are planning to put our own people there so that the services can be rendered to them in the quickest time. Then we are also trying to give them remote diagnostic systems so that at any point of time India could also support them simultaneously. We have already posted people in Egypt and will expand further to strengthen our commitments to the business partner”, said Mr. G Srinivas Rao.

On creating awareness Mr. KVS Rao said: we will be working towards the areas, which will help to improve productivity and efficiency. We still have to work on providing better services to the customers. We undertake customer specific events wherein we do presentations, demos, and in fact we also plan to sell training programs as a product next year. This program can be availed by any of the mills wherein they can send their people for training in automation and get them certified and we hope this will create more and more awareness towards automation & instrumentation.

Mr. Suresh Kilam - APP

A Brief about APP

At present APP manufactures 13 million tons of paper comprising of 3 grades i.e. writing & printing, industrial and tissue paper. Out of the total paper that we produce W&P surround 6½ -7 million ton for which we consume about 65-70% of the hardwood pulp, which is met by our own captive plantations simultaneously we source our softwood pulp from Scandinavian & North American countries. Recently, we did some acquisitions of small mills in Europe for our softwood pulp requirement and to lower our dependency on the open market. We have started producing little bit of mechanical and softwood in Hainan too. Lately, APP ventured into a greenfield project in Indonesia with the capacity of 2 million tons and we have enough forest to support that. Ever since we acquired Indah Kiat in 1986 we have been planting trees and have enough forest cover to support our production capacities. To increase our pulp capacities further we are using the different techniques to boost our per hectare yield of wood by 20-25%.

Thought on over capacity

I would say the market has over capacity, but in W&P paper only. This is not because of the additional machines or the additional capacities that has been added. The main reason is that the market in Western Europe and North America is shrinking. Chinese and the Indonesians can’t export to North America and Chinese can’t export to Western Europe, so the panic button is pressed in Asia. And, the over capacity is only in coated paper and not in wood free uncoated as it is still balanced. People have the temporary phenomenon of getting worried and stop buying. The total world consumption everyday is 1.3 million tons and if you don’t buy for let say 30 days than 39 million tons is what you have for the disposal, so panic situation is created.

Like I said earlier over capacity situation is in coated paper whose worldwide consumption is 22 million tons. China produces 8 million tons of coated paper against 4 million tons of demand. And, because China cannot export to Europe & America, which jointly consumes 11 million tons so it diverts the excess of 4 million tons to Indian sub continent, Middle East and South East Asia. In a nutshell over capacity situation is only in coated paper, which is about 5% of the total global portfolio of paper, and it’s a temporary phase.

Market Synopsis

The graph of W&P paper seems to be going negative and I am talking about the whole market growing at -1.8%. By 2020 it will come down to 105 million tons or 100 million tons from the existing 125 million tons because market in western world is shrinking and the only area where it is growing little bit is Asia. Industrial paper is doing okay and growing at rate of 2-3%. The other item, which is doing very well in the world today is tissue paper. The global consumption is about 30 million ton and still growing at the rate of 6-7%.

APP Plans for India

APP wants to capture some percentage of growth in the Indian market, without displacing the local industry. So far Indian story is very good with the present demand of 11 million tons, growing at 10% every year. We would like to grow in India into high-end packaging board i.e. ivory board or folding boxboard. And if Indian government allows the FDI in retail then the demand for the cartons will double in the next 5 years.

In coated paper segment, India has to import it irrespective of the dollar price, as there is deficit of couple of thousand tons of coated paper. Tissue market in India is very small with the consumption of 60,000-70,000 tons per year as against 6 million tons in China. Though it is very small but in the next 5-10 years it will grow at 20% p.a. highlighting the great opportunity for us.

Views on Indian market & role of international players

If the industry has to survive or if you want to improve the industry, competition has to be there. And, if you want fair & healthy competition then you have to bring down the duties to zero level, as you can’t protect the Indian industry in future. The recent acquisition of APPM by IP shows western interest in the Indian market. IP paid a good entry amount to the mill which is just 250,000 tons p.a. to see whether they want to expand into the Indian market or not.

After our brief stint of Sinar Mas in India we decided it is better for us to export paper here. Now India has joined AFTA, so under the AFTA agreement Indonesia can enjoy 50% set off against the duty, the duty for the rest of the world is 10% and for Indonesia is 5% and under this agreement the duty has to come down to zero in the next 2-3 years.

By 2020 you will see the Chinese producers will dominate 60-70% of the W&P and 30-40% of the industrial grade, why because China has access to new technology, which provides them economies of scale. They can afford to invest in a machine, which costs over a billion dollars even because they have huge domestic base. This year China produced around 105 million tons of paper and growth in every year is as big as one India. The average age of a paper machine in America & Europe is 35-40 years and 27 years respectively whereas in China it is 5-6 years. So even if the prices drop below the raw material cost the Chinese can still survive. The entire growth of 10 million tons in India in the next decade will largely be met by way of imports except for the low value grades. China is efficient and you cannot tell them that no, we will not allow you to come to India. The day the 10% duty comes down to zero then you will see the complete turnaround.

About 25 years ago Mr. Chandrasekhar Padmanabhan, Chairman and Managing Director of the Arjun Group, started CP Engineering GmbH with a vision to serve the global pulp, paper and converting industry by providing quality used, unused and reconditioned equipment at competitive prices. The industry being highly capital intensive, therefore the need for well maintained used machines has always been stressed upon. Over the years the company has established its foot holds in the Indian market by serving esteemed clients like Ballarpur, ITC, SPB, Khanna, JK, Rainbow etc. In India the group which is led by their group President and CEO Mr N Narayanan, is operating in the paper industry under 2 outfits i.e. Arjun Technologies India Limited (ATIL), as the leading turnkey system supplier to the Indian paper industry and Arjun Chemicals Limited (ACL) to deliver versatile, world class, new generation paper chemicals. Both these companies have been successfully involved in bringing new concepts of production to the Indian paper industry.

Arjun Technologies India Limited (ATIL) undertakes the activities from raw material handling to pulp mill to paper machinery accessories to converting to materials handling. It has grown to be the one-stop-shop for the paper industry. The main idea is to bring together the best expertise and experience from some of the world’s forerunners in pulp and paper machinery manufacturing. With a professional and understanding approach to project feasibility, planning and management alike, Arjun Technologies India has provided value added engineering services from concept through commissioning. Arjun Technologies has the key global leaders like Kadant Lamort, E.C.H. Will, Toscotec, Bekaert Soloronics, Horst Sprenger, Pemco etc. as its partners.

Arjun Chemicals Limited (ACL) came into being with its ultra-modern manufacturing plants at Ranipet, Tamilnadu and Jammu, J&K. It has dedicated itself to provide consistent quality to meet the customer’s entire needs in paper chemicals. Their ever expanding product range includes products like sizing chemicals (akd, cationic rosin), retention chemicals, sodium chlorate, DSR, refining enzymes, deinking chemicals, deposit control chemicals, biocides, surface sizing chemicals, coating chemicals and converting additives. It has expanded its facilities to provide fully automated and world-class manufacturing infrastructure to produce the complete range of paper sizing products under License from Eka Chemicals.

Arjun at Paperex 2011

We are representing and partnering our principles such as EKA chemical, which is part of Akzo Noble, Kadant Lamort for stock preparation, Toscotec for tissue machines, ECH Will for sheeting, ream wrapping and A4 sheeters, Bekaert Soloronics for IR drying etc. Since the last 1 year we have also started manufacturing head boxes, wire part upgrades, presses etc. A few handshakes have also been done with respect to new tie-ups and the new products will be launched soon. Some inquires pertaining to paper machine components and stock pre-parations have been received at Paperex.

Views on the Indian Paper Industry

I think industry is going through some tough times with rate of interest as high as 16%, people are finding it difficult to plan viable projects. Writing & Printing is in bad shape due to the current over capacity situation but market should absorb this additional capacity in a year or two after which things should look up in this segment. Newsprint is doing well, board is doing a little bad, brown is expected to keep doing well.

(From L to R) Mr. Andy Walti, Head of Paper Business- Clariant - Asia Pacific, Mr. Adrian Fox, Business Development Manager, Clariant - UK and Mr. Shashikeerthy US, Head of Paper Business Clariant Chemicals (India) Limited

Clariant Chemicals (India) Limited is one of the leading specialty chemicals companies and is the number one player in Pigments, Textile Chemicals, Leather Chemicals, Biocides for Paints, among others. Their strong business relationships, commitment to outstanding service and wide-ranging application know-how make them a preferred partner for customers. Clariant is committed to sustainable and innovative growth in India. With over 900 employees generated sales of about INR 10 bn (in 2010) through its various businesses like – Textile Chemicals, Leather Services, Paper Specialties, Pigments (Coatings, Printing & Plastics and Special Applications), Additives, Emulsions, Industrial & Consumer Specialties, Detergents & Intermediates, Oil & Mining Services and Master batches. Their innovative products play a key role in customers’ manufacturing and treatment processes and add value to their end products. Its success is based on the know-how of its people and their ability to identify new customer needs at an early stage and to work together with customers to develop innovative, efficient solutions. During Paperex 2011 team Paper Mart interacted with Mr. Andy Walti, Head of Paper Business- Clariant – Asia Pacific, Mr. Adrian Fox, Business Development Manager, Clariant – UK and Mr. Shashikeerthy US, Head of Paper Business Clariant Chemicals (India) Limited.

Paper Mart: What kind of value added solutions you offer to the paper industry?

Clariant: We supply products for the Pulp, Paper making and Coating applications. Globally we are one of the leading players in providing Optical brightening agents (OBA’s), Dyestuff and Tinting Pigments and Process & Surface chemicals. At the moment we have around 14% of market share catering to 70-80 mills in India.

Depending upon the customer needs of value addition, Clariant focuses on developing the innovative products in accordance with the customer process needs. We provide solutions for the end users - it may be a printing related problem which can be sorted out by our chemicals for coating applications. Over the years many developments have been done for better print image or better print results for e.g. we have developed different cross linking agents depending upon the type of binders used in coating formulations and the end printing method the industry adopts.

PM: What is the major challenge you find working out here in the India?

Clariant: In India there are around 50-60% waste paper based mills and the quality of the waste paper which is being obtained is not consistent as the collection, sorting and procurement is very fragmented. This leads to problems with respect to the stickies which are bound to come with the different quality of waste paper. This leads to paper mills having a lot of down turns due to web breaks. One will not get a 100% solution for this but can always minimize it. We work in the direction where solutions are provided to reduce the number of web breaks, keeping the system clean, increasing machine speed etc. With such measures you can increase the productivity by 2-3%.

Here, it becomes very essential for Clariant to educate the mill personal (not only the technical but, also the commercial teams) about the benefits which can be derived by using the value added products by taking in account all of the parameters like improved machine runnability, reduced substandard quality, cleaner system and ultimately higher productivity.

PM: Your plans for the new products launched in India?

Clariant: Initially, we will use our global expertise to establish our two new deposit control products (Cartaspers SCM and PSM) in the Indian market. The high dependence of the Indian Paper Industry on the recycled fibre is a good potential to grow in that area. In India with the new product launch, in the first quarter or two we will target some 10-15 key customers who can get the value addition and to build our initial references. We have many references outside India and we are working on to try and establish local references very soon.

PM: What is your strategy for Indian paper industry?

Clariant: We did a thorough strategic exercise last year and in overall we have an ambitious target. We plan to triple our sales in the next 5 years with the new products and simultaneously broadening our customer base.

Mr. Abhishek Gupta, Marketing Head, Trident Group

Abhishek Gupta, Marketing Head, Trident Group has joined the business 3½ years ago, looking after marketing of Trident group as a whole and also involved in the new projects undertaken by the group as a core team member. During his first visit to the Paperex 2011, team Paper Mart interacted with him. Also present at the interaction was Mr. Rajeev Gupta, Business Head – Trident Paper. They jointly shared their views on future plans, their green USP, raw material and market scenario etc.

Paper Mart: What are the opportunities and challenges you find in paper industry?

Trident: It is a promising sector resembling the high growth opportunities along with some challenges. The availability of skilled workforce is a problem not specific to the paper industry but it is a problem across industries and sectors. The economy is growing and paper typically grows at the same rate at which the economy grows. Copier is growing at an exponential rate of 15% p.a. Export markets which are not completely but largely untapped from the Indian shores present the high growth opportunities. The industry as a whole has to work together to project the true image of the paper industry in a right way. We should aware the people about the CSR activities undertaken by us whether it is farm forestry or social development of the nearby areas.

PM: The USP of Trident i.e. saving trees, in a way presents a negative image of the industry. Kindly comment.

Trident: My reaction is going to be twofold because your question is like that; the first is on paper industry. Paper industry is more infamous than the real facts, the people who are using mobiles are in no way saving environment and they are taking pride in saving environment just by recycling the things, which cannot be recycled completely. Whereas paper industry which is actually planting trees and lot of forestry programs run by the industry that is not being discussed, so from that point of view paper industry is may be perceived or may be marketed as against environment.

Now coming to the second point i.e. Trident paper save trees that is a fact. We may say or we may not say but even if you plant you still cut a tree for making paper. At Trident, we do not cut tree but we substitute it with agricultural residue, which would otherwise have burnt and should have created environmental problem. So we are serving the society in 2 ways; one, we are not cutting the trees and second we are using agricultural residue as a raw material and on the second hand rewarding farmers also. This is our USP and we would like to leverage our USP and make people aware that Trident is one company which works for the environment, live for the environment and do business which is environment centric.

PM: What are your plans for the paper business?

Trident: Trident Paper did turnover of 605 crores in financial year 2010 -11 as compared to 495 crores in 2009-10. We are planning to achieve somewhere around 680 crores in this financial year from the same set up and this is not because of any additional major capex but more on the basis of balancing and harnessing the technology to the fullest that we have bought in 2008. Once we are able to do it efficiently we would be able to create a balance between what we have spent and how we are using it and after that we will definitely come for the expansion but right now paper expansion is not on the cards.

PM: What is the raw material scenario for next 5-10 years for Trident?

Mr. Rajeev Gupta, Business Head – Trident Paper

Trident: India is the third largest producer of wheat in the world. In 2011 it produced around 85.9 million tons next only to Europe and US. Every ton of wheat gives two tons of wheat straw which means 170 million tons of wheat straw should have been available and in fact our region is the largest producer of wheat in India. Entire wheat straw produced is not available for paper, partly goes for fodder, partly goes as land filling; some of it is still burnt. Now the challenge is the supply chain and ultimately bringing it to the factory. To attain this all around effort by farmers, society and Trident has to be in place.

PM: How do you look forward to the market and what exactly the market strategy Trident has?

Trident: When market is tough all are equally bad or good, this is a race and you are fighting a race amongst yourself. Trident has an advantage of being environment friendly. We are alive and active and change as per the market needs. By virtue of our belongingness to the company, which is exports oriented, we never see India as the only market but entire globe as our market. Though in India we have 10% of the share but at world figures we are nowhere, so we do not feel any challenge in terms of market saturation.

The strategy for paper is two-fold; first we are increasing copier production because the technology that we have allows us to produce more. Indian paper industry is growing at 7.5% and copier paper in that is growing at 15%, so our capabilities and the Indian growth both complement each other. Copier remains the major focus for us and we are converting our business from other segments to copier and this is the first part of the strategy. Secondly, there is a price gap within copier paper, so to harness that gap we have been launching copier time and again. In last 2 years we have launched 4 new brands, which is a part of our strategy to penetrate in the market and make ourself present across all the brands and segments.

PM: What is the vision of Trident Paper for 2020?

Trident: We are a company, which is environmental friendly and will continue to work in this domain. Having the vision on 2020, we haven’t drafted it very precisely; we are still working on this and will largely depend upon as how efficiently we are able to do the current paper business. We would like to be in a much stronger position than we are now and would like to grow faster than the industry, which is about 7-8%.

PM: If at all you come up with an expansion, what will it be?

Trident: The product will be packaging as it is growing at an exponential rate in addition to the copier so that is something that we will consider in future and in terms of raw material it is going to be agro based only or even if we go for wood it is going to be FSC certified. If you look at the past growth the big players have grown to the tune of 11.5-12% in last 7 years whereas Trident paper has grown at an average of 23.5%, so it is more than the double that average, that we have been able to obtain in the 7 years. Within packaging we might go for carton board or the container board or mix of both.