JK Paper Ltd. is India’s largest producer of branded cut size papers and a leading player in the fine papers and packaging board segments. Grappling the major chunk in the copier segment and growing it year on year basis involves capital investment, workforce and other resources but the most important element that makes all the things worthwhile is the strategy and its rightful execution. In an interaction with Mr. A.K. Ghosh who spearheads the sales and marketing operations at JK paper ltd., he took us through the market strategies of JK Paper, their focus on product development, its strength and critical success factors highlighted below.

Paper Mart: Highlight the marketing strategy of JK Paper and its focus on product development.

AK Ghosh: When paper industry was content with producing ordinary cream wove quality, JK pioneered in 1962 the surface sized maplitho paper – popularly came to be called ‘JK Maplitho’ – a premium quality printing paper ideally suited for the litho printing process. We went further and the real transformation in marketing began in early 1990’s viz. JK Paper’s customer driven business approach.

Advancements in printing technology in copier machines, with upgradation from liquid toner printing to dry toner and now digital printing – saw evolution of a premium and brighter copier paper – made to exacting specifications – in consumer friendly packs of various sizes.

JK Paper was quick to see the opportunity of introducing ‘Mill Pack’ as compared to ‘Local Cut Packs’ of copier papers available in the market that time – giving birth to largest copier paper brand in the country – ‘JK Copier’ – no machine jamming, whiter & brighter, excellent edge finish and print results.

JK Paper was among earliest to invest in state-of-the-art A4 cutting lines for mass production of these products. JK Copier’s status as the largest selling multi-functional office paper is not by chance but its efforts over the years.

Apart from JK Copier, JK Easy Copier and Sparkle, we also introduced JK Copier Plus, CEDAR etc to meet the requirements of corporate executives as also to meet the demand from printers for high quality premium writing and printing paper.

Branding approach + diversification into coated and virgin board segment has helped us to be present in all the fast growing paper and board segments of the market (the only Indian paper co. to have this distinction).

Introducing ColorLok is yet another milestone in our efforts and market initiatives to be ahead of the curve. JK Paper has signed an agreement with HP to be the first Indian paper company to make ColorLok papers in India.

It is important to emphasize that this will also provide “true-value-for-money”. It substantially reduces printing costs and helps reduce environmental wastes. It will also, by making printers run smoothly, increase life of printers themselves.

Branding and marketing of JK Paper is being greatly facilitated by wide marketing/channel distributors. Some of these have been with us for a very long time. Good quality products require good technology and quality people.

PM: Elaborate on the strengths that a company such as JK Paper brings to the table.

AKG: JK Paper has been constantly creating value in a highly capital intensive and cyclical business, where volume is traditionally considered as key profit driver. Most companies concentrated on increasing capacity but JK Paper responded with a brand driven strategy, with customer at its heart. We were able to make JK Paper synonymous with premium quality paper and this is reflected in customer’s trust in its products enjoying the ‘Brand’ status among its competitors. It is the ability to understand customers’ expectation / aspirations and fulfil their needs and requirements that had given us the “first mover advantage” in many products.

PM: Highlight the factors that seem critical for JK to succeed in emerging markets.

AKG: It is essential to ensure that JK Paper service different pricing points without sacrificing quality standards. This is why we have two distinct brands JK Copier and JK Easy Copier: for high end market and lower end market respectively. Sparkle’ is yet another brand introduced to meet the middle segment of the market and face competition from new products launched by other paper producers in the country. We also went for modern technology and focussed on “size” whenever we took capacity expansion. This helped us to gain economies of scale on one hand and resource conservation on the other.

Apart from catering to the domestic market we have also been making efforts to penetrate global market. Our efforts have been rewarded with a special export award from CAPEXIL for 2010-11.

Constant innovation, eye for managerial and operational efficiency through programs like TPM helped us to save on costs on a wide front. The fact that we largely have an “in-house” pulp capacity to meet our requirements also helped us to overcome volatilities in price of market pulp also helped us in a significant manner.

It is important that we make available all varieties and at various price points to cater to a wide range of customers and their varied requirements. Paper is still considered as a commodity or “a white piece” and it is important to differentiate our products from the rest in the market place. The critical factor would be to augment our branding to commodity marketing like paper, particularly when copier paper is emerging now almost like a FMCG product.

PM: Where do you see W&P segment in the coming 5 years?

AKG: Currently W&P segment size is about 5 million tons per year. It is likely to grow by 9-10% annually so over the coming 5-6 years one would see the market expanding to around 8 million tons per year. Copier and coated, however, are growing faster than the overall W&P segment. I see a combined size for coated plus copier at around 2 million or doubling from annual 1 million today.

The point is we shall see a further shift in output mix that favours branded and value added products and at the expense of traditional varieties like maplitho, cream wove etc. I also visualise a big demand growth from digital printing segment and these would require high quality papers like ColorLok etc. Competition is bound to intensify and only those with good understanding and meeting the aspiration of customers will succeed.

To give a global perspective, it is clear that markets in developed countries are likely to grow slowly if at all and most of the growth will come from emerging countries including India. This is all the more so in recent years when we saw recession in many advanced countries and this in turn accentuated the stagnancy in demand for paper in these countries. Add to this, the growing competition from electronic media like internet advertising, I-Pad & smart phones in these countries. Thus, I would not be surprised to see India emerging among the top global pulp and paper players over the next decade and possibly earlier as well.

While this is a good sign as it reflects greater opportunities we would also see foreign players eyeing this market either through exports to India or setting up production bases. Competition is therefore like to become intense.

PM: What are the biggest growth constraints in the Writing & Printing Segment?

AKG: The challenge is to be among the low cost producers but with high quality products. Economies of scale and modern technology will thus become far more important than now. These are important not only from cost point of view but also from the fact that resources like water and energy will become scarce and also environmental issues will occupy greater relevance then. Besides I also see raw material availability as a major challenge.

Emami group, headquartered in Kolkata, a diversified business house enjoying leadership positions as:-

• 4th largest Indian FMCG Co (Emami Ltd)
• Largest newsprint manufacturer (Emami Paper Mills Ltd)
• 4th Largest manufacturer of ballpoint tips in the world (CRI Ltd)
• Largest healthcare provider in private sector in Eastern India with hospitals and pharmacies (Advanced Medicare Research Institute)
• Prominent real estate player
• Ventured into edible oil & cement manufacturing (Emami Bio-tech Limited, Emami Cement Limited)
• Turnover of over Rs 4328 crores (USD 940.86 mn) (FY 2010-11)
• EBDITA of over Rs 821 crores (USD 178.68 mn)(FY 2010-11)
• Net worth of over Rs 1358 crores (USD 295.21 mn) (F.Y.2010-11)
• Strong and dedicated workforce of over 20,000 people.

Emami entered into paper business 30 years back with a small newsprint plant of 15-20 TPD based on rice straw. In the span of 30 years they rose themselves to become the largest manufacturer of newsprint in India with 145,000 TPA capacity. They serve most of the leading newspapers – The Economic Times, The Times of India, Hindustan Times, Anandabazar Patrika, The Telegraph, The Hindu, Dainik Bhaskar, Dainik Jagran, Rajasthan Patrika, Samaj, Sanmarg, Deccan Herald etc.

New expansions on the Cards

Emami initially chalked out 2 expansions for its paper business. First to install a 400 TPD newsprint machine at their existing location with total outlay of Rs. 500 crores and second an integrated wood based writing and printing paper unit of 175,000 TPA with a project cost of approx Rs 1225 crores (USD 272 mn).

Seeing the market scenario they have switched their plan of expansions and now they are first putting up an integrated W&P unit which will be followed by newsprint unit. Highlighting the reasons for switching the plans Mr. Patwari explained “the market scenario for newsprint is bright with 8% per annum growth. Today the country’s total requirement is around 2.2 million ton out of which 50% is manufactured domestically and 50% is being imported. Our entire production is getting consumed amongst the selected clients. We face competition from the inter-national players only. Internationally the growth in the newsprint segment is slowing down and contrary to that it’s increasing in India and China. Newsprint being exempted from import duties creates threat of imports. Thus in order to balance our portfolio we thought to go first for the integrated W&P unit.

Describing the idea behind opting for W&P first, he said: “The copier segment is growing at 15% per annum which act as a requisite force to go ahead. Besides, the Indian printing industry is expected to grow at a CAGR of 15-18% and recent trends show India has emerged as the outsourcing hub for printing and publishing businesses”.

“The W&P plant will get commissioned in April 2014. Once this W&P project is commissioned we will add up capacity in the newsprint segment as there is a ready market and ready customers who are comfortable with us and need our product. Sooner or later we may enter into packaging board segment too.”

Securing raw material

The planned capacity of 175,000 TPA would need around 500,000 TPA wood for the pulp making. We have done the complete research work for securing of raw material availability within 200-300 kms area. Since last 2 years we have started the plantation activities in Orissa, Jharkhand, West Bengal and in and around areas under 300 km radius. We have opened agro-forestry division within our company and a team of 60 people has been created. We roughly need 7000 hectares land per annum for the plantations. Last year we covered around 2000 hectares and this year we will cover 5000 hectares. Our target is to cover 70,000 hectares in next 4-5 years.

To secure the marginal land from the farmers our team goes village to village to meet the leaders, panchayats and convince them by giving audio and video presentations to give there marginal land for growing trees. Once they are convinced then we provide them saplings at 1/3 cost. We have created more than 30 nurseries in all the districts and are developing the saplings with the clonal technology. We also arrange finance for the farmers from the banks and give them buy back guarantee. We are growing the species like eucalyptus, casurina, subabul etc.

From this agro farm forestry we will roughly get 25-30% in the first year, 50% we will take from open market like Andhra Pradesh. 2nd year it will be 30-40% and 3rd year roughly 50% and 4th year we will get full 100% of our own, so that way we are considering our project also that first 2-3 years we have to incur roughly Rs 1000 per ton for wood as extra cost. Moreover, we can also access the plantations that are standing for long due to the closure of paper mills like Titagarh, Bengal Paper Mill, IPP etc.

Planned Technology, Product and Project Finance

The W&P integrated unit will be established at the current campus in Balasore, Orissa where we have further acquired the land. We will manufacture copier, offset printing and if requirement is there then base paper for coatings. We are targeting to produce internationally competitive product as 3-4 years down the line import duties will come down further giving push to imports from South East Asian region. So, we have to be at par in terms of quality & pricing. We are planning to put up an environmentally sustainable technology in which the consumptions of energy, water, chemicals and other variables can be minimized. For W&P we have identified a second hand machine and we will be rebuilding it to the latest standards. The cost of the W&P integrated project is 1,225 crores. Financing of this project will be majorly through debts (70%), partly by internal accruals and equities (30%).

Steps taken to become environmentally sustainable

Whatever waste we generate out of pulp making we burn it in the boiler to generate power. Secondary sludge is also used as manure in nearby areas. Similarly, fly ash generated is utilized 100% by manufacturing fly ash bricks, in road construction and filling low lying areas and in asbestos sheet manu-facturing. Then, we are planning one cement unit also at Chhattisgarh so we will be using the waste from our mill over there.

Initiative for waste paper collection

Considering the global scene there is dearth of waste paper. In order to tackle the future scarcity of the waste paper we have tied with local rag pickers for dumping all the collection of paper every day at our various dumping points and take immediate payment, which act as an incentive for them. To encourage the households to sell it as a scrap rather spoiling it we have made it more remunerative for them i.e. instead of Rs.6/kg we give them Rs. 9/kg.

CSR activities at Emami

Our founder’s philosophy is to incur 10-20% of the income towards CSR activities. Our CSR activities on education side includes opening schools with all the basic amenities, giving scholarships and distributing free text books, sponsoring colleges for providing higher education. We have also in the process of opening up an industrial training institute (ITI) to train local people and provide them employment. On healthcare side we send the mobile vans equipped with latest medical equipments for free check-ups of the local people. For empowering women we supply sewing machines and other employment opportunities.

Mr. K.L. Chandak

Mr. K.L. Chandak has gone through ranks at West Coast Paper Mills Ltd. and now manages the mill as the Executive Director. He has also served as a Director of Rama Newsprint & Papers Ltd, Bahubali Papers Ltd., Speciality Coating and Lamination Ltd. Above all he is a chartered accountant and a coveted rank-holder in ICAI . He is committed and indebted to Bangur family who has provided him growth opportunity from management trainee to executive director over the career span of 40 years in the company. With his inherent quality of meticulous planning, quick and precise decision-making traits, he has played a vital role in the execution of 1425 crores expansion project which has provided WCPM a leap of ambition.

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Paper Mart: What are the factors that have helped the propagation of the idea for such a huge expansion of Rs. 1400 crores e.g. growth prospects, competition etc. Explain briefly?

K.L. Chandak: Expansion programme completed at an investment of about Rs. 1425 crores which ensured the long term viability of the unit by increase in production from 180,000 TPA to 320,000 TPA (including 135,000 TPA on new paper machine – No. VI) and cutting costs due to scale of operations. It was also for better environment compliance as fiber line with elementary chlorine free (ECF) technology has been installed not only for incremental production but also for taking care of pre-expansion production capacity. It has also helped us in improving the quality of the paper in terms of brightness and strength properties, particularly copier paper production on new paper machine No. VI is very well accepted in the market in terms of quality. We are also able to tap industrial consumers as we can deliver excellent reel quality on the new paper machine and even reeling quality from the existing machines has improved. Our export target on PM VI is 25% of production. Concurrently, we have also strengthened our product mix derived from the new machine; we produce writing and printing paper of a higher bulk with the same grammage. Varied grammage were also introduced in copier paper with corresponding brands.

The project has been mostly funded through foreign currency loan / external commercial borrowings to the extent of USD 165 million (about Rs.750 crores) at lower rate of interest which is presently less than 2.5% p.a. International Finance Corporation, Washington has participated to the extent of USD 40 million, whereas USD 105 million was funded by ICICI bank led syndicate and remaining USD 20 million by Barclays bank.

PM: What factors were taken into consideration before finalizing the expansion in various areas of the mill? Kindly elaborate the Technology & Equipments selected for respective areas?

KLC: Thrust was to adopt latest technology in all sections i.e., pulp mill, chemical recovery and power house. The equipments have been purchased from reputed national and international suppliers so that we get the benefit of cost reduction apart from quality improvement. The company has also gone for backward integration in terms of plantations in a major way so as to ensure that at least 50% of the requirement of raw material (wood) is met from captive plantations. It has already raised plantations in 21,916 acres till 2010 rains and target is to plant 100,000 acres over a period of time.

Technology & Equipments selected for respective areas:

• Pulping – ECF. Supplier Metso Paper

• 135,000 TPA Paper M/c – Voith Paper

• Power Generation, Utilities, etc.

…•  34.5 MW Turbine – Bharat Heavy Electricals Ltd

…•  125 TPH AFBC Boiler -Thermax, Babcox & Wilcox

PM: What were the challenges faced during the execution of entire project and how you overcome that?

KLC: We had faced problem of project over-run due to delay in commissioning on account of government actions, including employment visa restriction on foreign technicians engaged in project work. Further, it is a brown field project and hence equipments were to be installed within the available space in the existing factory premises. Teething problems were also faced with various equipments which have been successfully resolved and now the plant is fully operational.

PM: How are you meeting increased raw material requirements to service your expanded capacity?

KLC: We require around 900,000 tons of raw-material per annum to feed our enlarged paper production capacity, completely procured from the current market. However, a few years ago, we embarked on contracts for farming scheme, wherein we identified fallow/waste land belonging to marginal farmers within a 250 km radius from our manufacturing unit. We provided clonal seedlings to these farmers, encouraging them to raise plantations from a long-term perspective with the safety net of an assured buyback. This proposition will lead to a win-win situation, provide income for wasteland owners and enhance our raw material security. We expect to derive raw materials from 661 acres (planted in 2006) of our total plantations in 21,916 acres currently. We expect to scale up with speed; our annual plan is to plant 10,000 acres, and based on an average yield of 40 to 60 tons per acre, we expect to secure 50% of our annual raw material requirements from these proximate plantations over the foreseeable future. This will not only protect our raw material sourcing from a volume perspective but it will also provide us with robust raw material, leading to superior paper quality.

PM: How do you view the fundamentals of the Indian paper market, given the volatility in demand, supply and prices and what are the drivers and enablers of growth for the industry?

KLC: The country’s paper industry is in good health; the copier and packaging paper segments are growing at an annual rate of 15%, even as the other segments are growing at 5-7% per year. The government’s thrust on the education sector is likely to catalyze paper demand from a per capita consumption figure of 9.6 kg – considerably lower than the international average. Further, we feel that an increase in disposable incomes and faster rural economic growth will strengthen paper demand – even a one kg per capita consumption increase could enhance annual paper demand by about 1.2 million TPA. We hope that paper market will remain buoyant, given the demand drivers, particularly industrialization and government focus on education. There is replacement demand also, particularly cup stock board replacing plastic and paper replacing plastic packing for Ghutka, etc. Due to recession from 2008, effective actions for creation of additional capacity have not been taken in the last 3 years and therefore paper realization should improve on account of demand/supply mismatch.

In addition to India our existing markets of focus are the Middle East, Africa and South East Asia. Our technology up-gradation helped us present superior grades in line with the requirements in these geographies.

PM: Lastly the recent acquisition of APPM by International paper in India shows that most of the times the Indian paper industry has been undervalued. After this acquisition BILT Paper Plc has kept on hold its IPO in UK for re-rating of the industry. Does this acquisition has really paved way for the Indian paper industry to get image makeover and rather appropriate valuation and might also open up a trend of consolidation in the Indian paper industry. Comments?

KLC: We do agree that acquisition of APPM by International Paper will definitely add value to the paper sector as more international players will be interested in this industry, given the growth scenario in Indian paper market. It will also make paper industry more competitive.

WCPM entered the paper industry in 1955 with a production capacity of 18,000 TPA, which gradually increased to 1,80,000 TPA in a little more than 50 years; then within the space of just three years we increased our capacity by 78% to 3,20,000 TPA, indicating the management’s faith in the long-term viability of this business.

Mr. R. R. Vaderah

Mr. Vederah started his speech by saying “The industry has to really respond to the challenge of 3 E’s and we have to get away from our manipulative way of trying to meet the regulatory norms. Industry has to get far more committed and dedicated approach”.

Further giving a synopsis of the Indian paper industry, he said: “The Indian paper industry is an integral part of the nation economy and is contributing to its growth and development. It is with this spirit that the paper industry is continuing to upgrade its capacity and technology despite of several challenges where many mills have invested in capacity building with the latest state of the art technology. The current turnover of the Indian paper industry is about Rs. 30,000 crore (USD 7 Billion) and the industry contributes to the exchequer about Rs. 3000 crore providing employment opportunity to almost 1.5 million people especially in rural areas. Debatable but our domestic demand of all varieties of paper is somewhere around 10 million tons. Out of which writing & printing is about 3.8 million tons, packaging grades is about 4.5 million tons, newsprint is around 1.7 to 1.8 million tons and then we have some quantity of specialty paper. Even though our per capita consumption is 10 kg currently, India is likely to experience the highest growth rate in world in paper consumption over next 10 years. Paper consumption in the world is 380 million tons and India consumes just 3% of this. While, 16% of the world’s population resides in India. By 2020 the paper consumption in India would be about 20 million tons or 20 kg per capita”.

On industry’s role in the growth, he added: “The industry will have to invest in the capacity building through adoption of superior technologies as well as continued effort to conserve resources and reduce its impact on the environment. Over the last two years the industry has expanded capacity by approximately 1 million tons with an investment of Rs. 8000 crore (USD 2 billion) and further projects which would add half a million ton capacity with an investment of Rs. 4000 crores have been announced”.

Talking about 3E’s he highlighted the challenge of non-availability of degraded land for plantations: “The 3E’s energy, ecology and environment a very crucial to address the sustainability of pulp and paper industry. India would have 325 million hectares of land mass and out of this there would be around 65 million hectares of degraded land. Here the industry has not been able to convince the Government to garner 2 million hectares of degraded land to grow our wood resource. We can develop in ascaled manner, commercially viable plantations, bring in advantages of improvement in clonal technology, vegetative propagation technologies and even through genetic intervention. As a result the industry has resorted on Farm Forestry and through farm forestry initiatives about 8-10 million tons of wood is generated on annual basis. This is a survival initiative but the cost of procuring wood through this process is too high”.

Enlightening about the technological upgradation in the industry, he quoted: “Industry has upgraded process technologies, installed most modern fiber lines and high speed paper machines with shoe press to boost the production, conserve energy & water and improve financial performance. Many mills have adopted extended delignification processes, ECF bleaching to modernize the fiber lines. In the area of paper making adopted alkaline sizing, replacing clay & talk with GCC & PCC fillers and increase the ash content in paper to reduce usage of fiber. Recycled fiber based mills have adopted superior de-inking technology. While, agro based mills have adopted chemical recovery system to recycle soda and generate steam. Few mills have gone for lignin recovery from black liquor. Industry has progressed in spite of challenges, improved environmental performance in terms of reduction of effluent volumes, reduction in terms of usage of steam, power, AOX reduction apart from many other successful achievements in process technologies”.

On environmental issues, he mentioned: “Environment is going to pose a huge challenge for us especially when we are targeting to cross 20 million tons in next 10 years. It’s not only going to be wood but availability of other resources, also the environmental compliance like water, air and solid waste generations a big challenge for industry. Due to alternate usage of wood the requirement will increase to 3 times in coming 10 years. The availability of the waste paper in the world is shrinking and the hunger from China is too large and they are buying 20-23 million tons of 55 million tons available recycled fibers. The water is a scare resource and the cost of the water has gone up by 10 times in few regions. The industry would be forced to conserve this resource. Paper is a natural, recycle and renewable product. The paper manufacturer has negative carbon footprints. However the paper industry has been continuously optimizing its operations and reducing its CO2 emissions, but much more has to be done by the industry with far more commitment towards reducing resource usage and moving towards the sustainable world”.

During his speech he also shared few facts related to his company: “Company like us moved out of the country not to run a paper mill in Malaysia, but to secure the fiber base, because that fiber base can make us grow”.

“We expanded BILT’s capacity initially based on bought out fiber and we burnt our fingers. As with the current market pulp situation which is there since 3 years, sometimes we don’t even meet our variable cost with respect to the selling price. So we have to do vertical integration and go upstream to have access to land and grow our own trees”.

“We are working with an Israeli company with the objective to bring our COD level to less than 200 PPM and secondly make the effluent color-less”.

A vivid follower of Swami Vivekananda and a keen observer of the stakeholders’ insight, Mr. Ashish De demonstrate traits of simple living with high thinking. In his tenure of over 40 years in the paper industry he has worked with some of the biggest names in the industry and successfully handled some of the successful projects with shear calm & compose manner along with analytical thinking. Banking upon his experience he is now handling the 1500 crores mega project at J.K. Paper with the utmost priority. Here are the excerpts of the interaction which we had with him along with the course of his busy schedule.

Paper Mart: Let us start with a topic that’s probably on everybody’s mind right now – the 1500 crore mega project which is in the pipeline. How do you see it? Kindly elaborate in detail?

Ashish De: This is a major decision taken by JK Paper in recent years. The main objective of such investment is to sustain the leadership position of JK Paper in the segment of the “Multipurpose cut-sized office papers”. This project together with our recent tie-up with Hewlett Packard to introduce copiers with “ColorLok” logo for Indian market will substantially enhance the brand image of JK Paper and especially of our unit at Rayagada, Orissa.

PM: What have been the hardest lessons you’ve learned about how to survive, innovate, making breakthrough etc? What have you learned from them?

AD: Never compromise with the basics. Always keep objectives very clear and visualize the bigger picture. Collect as much insight as possible from all the stakeholders, particularly from the customers, knowledgeable vendors, in-house team and of course from the wisdom of the Top Management. The trick is to create a dynamic & passionate team, with people who are everready to think “out of the box” and willing to do the things differently. Also would not like to settle down with the comfort zone. Take every competition or challenge as an opportunity.

PM: Let me get you to a subject you know a lot about, which is waste paper and the packaging board. Kindly discuss the challenges in terms of how innovation can address both the quality and the cost. Where do you see the opportunities? Where are the barriers?

Mr. Ashish De- Ch.Exe. (New Project) JK Paper Ltd.

AD: Yes. You are absolutely right. This is a subject close to my heart and I am very passionate about it. More than the challenge, I see a great opportunity in the area of consumer packaging in this part of the world. We are yet to see the retail explosion. The FMCG industry, barring a few exceptions, due to their global connection, has just started discovering the packaging as a value addition tool, instead of an overhead (which is still perceived by many). It is needless to mention that the consumer packaging board has been accepted as the most preferred substrate over other packaging medium globally.

But, Indian consumer packaging board industry has its own set of problems and this is not an easy subject that can be overcome soon. This is a complex business and actually it involves direct dealing with the converters and the end users.

Very few organizations, engaged in the manufacturing of packaging board in India, have understood this business well. Majority of the manufacturing facilities are still managing their business with yesterday’s technology, through conventional ways of manufacturing and distribution routes. Their products are struggling to cope up with the ever increasing demand of their customers, for the need of their new generation printing, converting and the filling lines.

Here comes the role of the ‘contemporary technologies’, economic scale of the manufacturing facility that can generate an attractive ROI. But there are two more important issues, we need to address so as to see the real growth in this segment:-

• We have to establish the discipline in disposing and  recovering the used paper & paper products at every level in the society. This will generate the precious raw material locally and reduce the dependency to the import of waste paper. It is unfortunate to know that the Indian metro cities’ garbage contain more than 25% Cellulosic material (recoverable paper products) and our overall recovery of the used paper is only about 20% against global average of +50%.

• Poor packaging results in very high losses during transit and distribution of FMCG products. FMCG industry should encourage their converters and the packaging board industry for better product by paying adequate price so that new investment in technology would be possible in the area of the manufacturing of packaging board. This will not only reduce the losses during transit and distribution but also create higher value through better packaging solution for the FMCG manufacturers. Today’s consumers see what is outside the pack before they see what is inside the pack.

PM: How do you change personally?

AD: Change is the only constant”. There is no fun in being stagnant and becoming outdated. One has to be transparent and open to all the ideas. Regular 360 degree feedback process in various organizations I have served, really helped me for making a visible change, which has helped me a lot to perform better.

PM: Where do you get your ideas from?

AD: Mainly by capturing the customers’ insight and partnering with know-ledgeable vendors. The most important thing is to be open and transparent with my team during all discussions, through careful and patient listening.

PM: Where do you get your energy from?

AD: Firstly, from my family and of course from the organization I work for. Last, but not the least, when the dynamic team, as mentioned earlier, produce exceptionally good results through innovative ideas.

PM: What are a couple of the big trends that you foresee, from where you sit, will really affect the Indian Paper industry?

AD: The Govt. of India should bring about a suitable Forestry policy by allowing the corporate to create renewable forest in the waste lands to address the issue of acute shortage of paper making wood. There is also a need for a nationwide campaign through administrative departments as well as through efficient NGOs for creating awareness and discipline to dispose the used paper properly and for effective collection and distribution. We cannot neglect paper industry anymore.

PM: What is leadership to you? And how would you define your leadership style?

AD: Many years ago I read one of the books written by Great Swami Vivekananda, where he mentioned about leadership in The Govt. of India should bring some context, which I am unable to recollect at the moment. I have read the same leadership statement several times and keep practicing it as my leadership mantra.

I believe this leadership statement is applicable anywhere & everywhere and for all the time. It is as:

• “Leaders are rare people who come along and raise the standards of excellence, those who capture the hearts of many, and inspire them to achieve the impossible.

• A true leader should have the confidence to stand alone, the courage to make the tough decisions, and the compassion to listen to the needs of others.

• A true leader is one who does not set out to become the leader, but becomes one by maintaining the highest standards and going that extra mile.”

]]> http://papermart.in/2010/11/30/learnings-from-an-evangelist/feed/ 0 http://papermart.in/2010/09/30/the-executioner/ http://papermart.in/2010/09/30/the-executioner/#comments Thu, 30 Sep 2010 08:04:29 +0000 papermart http://papermart.mediologysoftware.com/?p=3025

Mr. Sanjay Singh, a chemical engineer from IIT Kanpur,  who is better known as an executioner because his  responsibilities includes, to administer all the operations  of all the units of ITC located at Bhadrachalam,  Bollaram (A.P), Kovai (Tamilnadu) and Tribeni (West  Bengal). Under his belt Bhadrachalam Paperboards,  completed a series of production investments for Rs 11  billion (USD 242 million, EUR 178 million) in 2007-08.  Likewise he has also played an important role in the  other expansions too. His analytical & insightful  thinking makes it easy for him to undertake  any task with confidence and execute it at  its best. Below are the dialogues from the  conversation.

Paper Mart: Stepping back a bit, what it takes to build a state of art manufacturing unit – one that demonstrates the benefits and transformation, which involves major investments and a lot of change? What strategies you have applied to be sure that all the elements are aligned on every front in terms of latest technology (energy efficiency, water management etc.) along with culture?

Sanjay Singh: To built a state of art manufacturing unit the management of ITC PSPD kept in mind the following strategies -

1) Latest technology has to be sustainable.

2) Use minimum amount of natural resources like Water, Energy, Wood etc.

3) Benefit the society & cause no damage to the eco-system.

When new technology is brought in lot of time and money has to be spent on training of people to absorb the technology & operate the plant efficiently. In India we generally spend lot of money on buying the technology but we do not spend enough of time and money on training of people. Very intensive training was imparted to people ahead of start up of the plant to prepare them for the new technology.

It was extremely difficult for us to get good quality qualified professional to work in our plant located at Bhadrachalam. This was done by providing good housing & infrastructure facilities for people to stay & work.

We need to keep updating the team on developments in technology & its connect to the final customer. Every development and technology finally must benefit the customer.

Our experience has been that along with exposure bring in the latest technology which will use minimum of natural resources & give maximum benefit to customer. It always pays. The Indian paper industry has become big enough to reap the benefits of technological advancement and give good products to customer.

The Indian paper Industry needs to be convinced that new technology which uses the minimum natural resources will be sustainable in the long run. We need to go for bigger plant size to bring in economies of scale in the paper Industry.

PM: As the Indian Paper Industry operates comparatively on a smaller scale? Can Indian paper mills actually go for the expansions along with better technological advancements, to reap the benefits and How?

SS: As, the Indian economy is growing at 8 – 9 % and likely to continue at this rate the demand for Paper & Board will continue to grow. To meet this additional demand, the opportunity for existing mills or new entrants will be huge. The demand for good quality paper & board will continue to grow, as more & more automatic filling machines came into the country to meet the growing demand of population. To meet this new demand of paper mills will have to invest in higher & higher speed machines with new technology. The new technology brings within a lot of cost saving opportunities. Our experience has been that, the investment in new technology along with expansion brings lot of economic benefits to the mill besides being environment friendly.

PM: Being the head of the India’s best paper manufacturing unit? Kindly elaborate the development plans along with the expansion plans in the course of transformation?

SS: At our Bhadrachalam unit we have invested in state of art pulp mill with ozone bleaching. This was only the seventh plant in the world to introduce ozone bleaching. This has helped us to reduce water consumption & improve the quality of the effluent going into the effluent treatment plant. in the effluent treatment plant we have introduced the MBBR Technology for the first time in paper Industry in the country.

To meet the raw material requirement of our pulp mill we have completed 100,000 hectares of plantations working closely with the farmers. It has helped to improve the green cover & created additional employment opportunities in the state.

We also use wastepaper at our Bhadrachalam & Kovai units. For this we have started the Wealth out of Waste (called WOW) in the state of Andhra Pradesh and Tamil Nadu. In this we collect waste paper at the source itself namely households, schools & offices. We are working with hundreds of schools & corporate on this initiative.

Climbing the ladder from a Shift in-Charge to the roof top as a CEO, the journey of Mr. R.C. Mall has been a roller coaster ride. Having a stint of around 4 decades in the Indian Paper Industry and the ride on the roads of varied positions and companies has made him an all rounder. During his tenure as a CEO in APPM, their graph saw a 250% revenue growth. His in-depth understanding of the industry and its workings has earned him the position of one of the best analytical minds available in the Industry. To analyze the thoughts of Mr.R.C. Mall, team PAPER MART went to have a brief interaction with him.

PAPER MART : You have a background of working in different arenas in paper industry with the likes of Bangurs, Birlas, Duncan Goenkas, and now with Agarwal-Goenkas. How has been the journey so far?

R.C. Mall : I had all along very challenging opportunities in all my assignments where I learnt a lot and tried to give my best to the Organizations where I worked. All the jobs were highly satisfying. Some of these like that at Star Paper and APPM have been professionally very satisfying in terms of achievement and recognitions. I am lucky that once again I am having the tough challenge with a highly motivating environment to take up the assignment for spectacular growth of Emami Paper.

In APPM, I was given the responsibility to conceptualise and implement the two large scale brown field modernization and expansion plans of Rs 70 and 625 crores during 1998 to 2007 with installation of latest pulping and chemical recovery technologies to achieve cost reductions, economy of scale with high level of environmental compliance. At present I am busy strategizing and planning installation of a paper machine of capacity 132,000 TPA for manufacturing Newsprint at an outlay of Rs 600 crores and a wood based Integrated Pulp and Paper Mill of capacity 200,000 TPA of P&W grades at an outlay of Rs 1800 crores for Emami Paper.

PM : What kind of growth you anticipate in Indian paper industry?

R.C. Mall : Since many decades, we have seen that the growth of Pulp & Paper industry have been well linked to the GDP and has been close to it. Given the current growth environment of all the business sectors coupled with the thrust to education sector by the Government, there is every likelihood of Paper Sector registering a growth of at least 7% for the next 5 to 10 years.

PM : What are the key challenges which Indian paper industry is going to face along with this growth?

R.C. Mall : The most important challenge is the availability of fiber. The country is fiber deficient. The cost of imported fiber, be it waste paper or purchased wood pulp, makes the operations highly unattractive. The best answer is to develop the captive plantations through public and private partnership models involving the farmers and the rural populace. This way not only the availability will be tackled, the cost will be reasonable and we will be able to overcome the issue of scale of economics. Apart from this, a practical way to increase the recycling through better collection of waste paper needs to be put in place. Some models have been attempted by mills like ITC. These need to be taken up as social movement.

Besides the above, we need to tackle the technology aspect for environmental issues and improvise on our production and marketing strategies as well. We all realise and agree to the necessity of making the Industry environment friendly. Processes and equipment designs have been developed to tackle the menace of pollution and are directed to do so at the source itself. This calls for adopting higher technologies which work out to be economic with scale of operation, e.g. installing continuous digesters of latest generation to adopt low solids and low temperature cooking like the one installed at APPM. These are best adaptable at higher capacities. This also compels us to tackle our fiber availability issue.

PM : As per your view, throw some lights on the raw material scenario for the Indian paper industry in terms of challenges, solutions to overcome the challenges and the future you foresee?

R.C. Mall : The raw material scenario can be made sustainable, if a few bold actions are taken. Plantation activities through the involvement of the farmers is an area for which I canvass a lot. I have experienced it to give satisfying rewards to the rural population as also support the Industry for its raw material needs. This drive also propels the need for ecological balance and offers excellent solution to both – the drive for greening India and providing carbon sequestration while arresting the soil degradation.

The other step is to take up the massive task of organizing the collection system of the waste paper for increasing recycling for paper making usages which is very low at about 22% in our country as against at over 50% in many developed countries. This shall require very high level of administrative involvement at the government-end (because of the societal issues) and support of organizing abilities of the Industry.

PM : What is your perspective on the technological change in the Indian Paper industry in terms of awareness, adopting new technology?

R.C. Mall : As far as awareness and desire to adopt newer and greener technologies are concerned, the managements and technical fraternity in India are highly conscious of the same and quite aggressive also about these when it comes to pushing these into application. Nevertheless, the constraint of the scale to make such efforts economically sound often comes in the way. Even then many of the progressive Mills have been able to overcome these to a great extent.

PM : According to you does paper industry has a positive or negative impact on the environment & society. How?

R.C. Mall : Forest Survey of India’s latest biennial report suggests that while the overall green cover in the country went up by 2.8% over the previous level 2 years back, the forest cover was up by 0.005% only and the tree plantation outside the forests grew by 22.6%. In other words while the forests hardly grew much, the growth of total green cover of the order of 2.8% was possible because of the tree plantations registering impressive growth. This is corroborated by the corresponding figures of the state of Andhra Pradesh where the overall green cover went up by 5.4% despite a drop in forest cover by about 0.004% because of an impressive growth of tree plantation by 34.5% which was spearheaded relentlessly in the last few years by couple of mills located in the state. In other words, the Industry is creator of green cover rather than destroying it and maintains sustainability of eco balance adequately when you consider following added advantages from this drive to help raise tree plantations.

Now consider its social aspect. Progressive coverage of areas under such activities results in jobs and livelihood for rural population, many of whom may be in the BPL category. Mills have covered almost 250,000 ha of mostly waste or peripheral lands of the rural/tribal populace. Plans are afoot to cover about 40000 ha per year further by the Mills over the next 5-7 years.

The industry is being blamed by environmentalists for polluting water. But, through process developments and ever increasing adoption of recycling the used water, the Industry has brought down fresh water intake to less than half of where it was about 2 decades back. Not only that, the technology of treatment of the process waste water has been improved to the level that the same is being used safely in many cases for irrigation and other purposes too.

PM : What is the meaning of satisfaction for Mr. R.C. Mall both professionally and personally?

R.C. Mall : With persons having extremely high level of dedication to their tasks (and I think I can claim to belong to such a category), no separate meaning of professional and personal satisfaction can ever be defined. For me, working all through for the betterment of the Industry in all its respects resulting in creativity with real growth to ensure the future of the Industry is what counts most and gives me immense satisfaction.

Mr. M K Tara

He has earned his chops as a turnaround and commissioning expert. In his 4 decades of service to Paper Industry, he has developed the knack of successfully commissioning & turning around many companies with his eye for detail and focusing on finding the cause of problems rather than treating and minimizing the effects.

Mr. Tara told us about his success & satisfying journey from a trainee toMDand briefed us about some of his turnarounds and his mantras.

His Mantras:

• To be successful, you should enjoy your job.

• Set targets and aim higher (his definition of target is what you initially think; you cannot achieve & then find ways to achieve it.)

• You should deliver continuously and then you can survive at any place.

• Motivate & empower the people to take independent decisions. Wherever required, guide them to get best results.

• Freedom for R&Dand experimentation.

He has inculcated the culture of empowering people at all the levels in order to provide them the freedom of action along with learning’s. His priority towards environment and safety is first on his list. He pointed out that his professional life has been like a nomad’s life as he doesn’t stay for more than 4-5 years in the same company as the job gets monotonous. He is in continuous search of challenges and adventures in the job to get satisfaction and happiness. He counts everyday of his life and makes it worth. Language, religion or place is not a challenge for him. He worked at 9 different places where the language was a hindrance but he has been successfully able to communicate with his strategies and actions.

His Major Turnarounds

His major turnaround started from his first job. He understood that to earn respect and control, one should know the job, try and understand the problem of colleagues and help them to solve the same. Working as a team member, the results achieved were great and beyond the expectation of the management.

His innovative ideas were ably awarded by HPC. He was the first recipient of an award for trouble shooting, streamlining functions, reducing breakdowns, during commissioning of Pulp Mill.

He was involved with the commissioning of Sabah Forest Industries (Malaysia) and Phoenix Pulp & Paper Mill (Thailand). The mills were quickly stabilized and achieved record production in a short time.

He joined Punjapol Pulp & Paper Mills, when the mill was lying shut due to environmental and other teething problems. The evaporator tubes were regularly failing during that time. The Paper Machine was running slow due to use of superheated steam.

He took over as General Manager and before restarting the Pulp Mill, he thought the problems out. To look back, it looks so simple, but the mill suffered for three years. The problem traced was the use of high temperature and superheated steam in the Paper Machine and failure to check the desuperheater capacity in the pulp & recovery sections. The steam temperature was brought down to near saturated temperature. In four years after revival, not a single tube failed in the pulp or recovery sections. The paper machine could be speeded up to the rated capacity and still there was good margin left for steam consumption while at one time, the management was going to lay an additional steam line to cater the demand. Black liquor spillage was eliminated and recovery efficiency was improved. Earlier visitors, who used to know the company as full of black liquor in the drains or on floors, were pleasantly surprised to see final lagoon full of fish and recovery ESP running normal without belting smoke and with no black liquor spillage.

Mr. Tara is a thinking and action man. He says that sometimes we miss out simple points, when we do not review the Projects properly. When he joined one mill the expansion programme was already initiated to increase the production and speed of machines. But the consultants and mill people missed out that, there is puddle size press. Even if the machine speed had been increased, the net production of sized paper would have remained the same. Mill would not have been able to achieve the desired Surface Sized Paper production. After this was pointed out by him, the mill management was quick to react and ordered a new size press and the new film press became a part of the project. The mill could finally achieve rated expanded capacity.

At Abhishek Industries, he enjoyed his job without interference from top management. There were various challenges and other things to improve. The mill was known for making paper with ash content of 35-40%. Recovery Boiler was running only for 10 days with black liquor. To streamline the mill’s operations, pulp capacity was increased with same equipments & manpower. With the Recovery Boiler running at the rated capacity, the furnace oil usage was drastically reduced and the recovery efficiency jumped to +96%. The paper quality and contribution increased substantially after that. The mill started showing profits which gave confidence to the management to start a new project.

The new project included the world’s biggest wheat straw line with ECF bleaching and a fully imported paper machine. (He laughingly said that even the staircases were imported). Later, his health started deteriorating for which he took a break to improve his health, rejuvenate and fulfill his long ambition of visiting Kailash Mansarovar.

Two years back, when he joined APPM, the average age was 57 years in the mill and many retired people were continuing. He set about changing all that. So, B.Sc. graduates were recruited. The Business Review Meetings which were held in Hyderabad were shifted to the Rajahmundry. The presentations style was changed. From each department instead of department head, the shift in-charges were encouraged to give presentations so as to boost their confidence. Besides the regular budget, target budgets were also initiated which were higher than budget figures. To achieve the targets, Small Group Activities (SGA) were undertaken. He is very happy with the turnaround and the results speak for it. This was clearly visible from his expressions during the interview as the financial results of APPM were declared one night before the interview and APPM has achieved the highest PBT, PAT & EBIDTA. The profits were 3 times more than the previous year.

Commenting about empowering people he said: “My job is to motivate people. I get more satisfaction in trouble shooting & improving the mills by doing something new and different. I tell my team to experiment, if they have something in their minds, taking safety and environmental factors into consideration. If it succeeds you get the credit, if it fails you can put on me.”

In a light mood he also told us that when he was working in Bengal Paper Mill, whenever unions were on strike, they used to shout “DHUAN & CHAKKA BANDH” i.e. No Smoke & Stop Machinery. He made this as his own slogan and implemented it for better environment- “No black liquor should go to the effluent and no smoke from chimneys”.Hewants the mill to be operated in such a manner that, from a distance the heart should give a skip by looking at Chimneys whether the mill is running or shut.

Irrespective of the position he was holding he have been tested all the time, to which he smiled and said: “It happens to everyone, when you join a new organization. I have delivered wherever I worked. Learning and imparting skills & knowledge is a continuous process and I amlucky that god has been kind to me in all my endeavors”. “Experience is nothing but the mistakes that you do in course of your life. But learn from mistakes of yours & others and do not repeat the same”, he concluded.

Sharing his overall experience including his initial starting, period of struggle, learnings, and the future prospects he spoke…

My beginnings were very humble and I have come up through the ranks. Out of the 50 years of my association with

Mr. M. L. Pachisia, MD., Orient Paper

Birla group, I was in Nigeria for 22 years (1966 to 1988). After coming back to India, I initially got associated with Hindustan Motors and for the last 12 years I have been looking after Orient Paper & Industries Ltd.

I initially started as a dispatch clerk in Calcutta office of one of the Birla group companies in 1960, immediately after my higher secondary exams. Slowly I involved myself with additional jobs and things just started rolling. I would attribute most of it to luck.

In 1963, I was transferred to Hyderabad Allwyn, which was then managed by our group and gradually rose to the position of Chief cost accountant.

Then one fine morning I was called by the CEO of Hyderabad Allwyn and asked  “Nigeria jaoge”. Frankly, I did not know where Nigeria was. I later learnt that our group was in the process of setting up an engineering outfit in Nigeria. My father was totally against this proposal. I almost said no but my uncle intervened and said it’s a life time opportunity and I should go. That is how I landed in Nigeria in 1966 at the age of 21 and took up the assignment as Chief accountant of the company..

My career span in Nigeria from 1966-88 posed some of the biggest challenges I have faced and also some of my humble achievements. Shortly after commencement of our operations, a civil war broke out in Nigeria. Our company was located right in the middle of the war zone. While all other expatriates left

Nigeria, I decided to stay back in our Lagos office and carried on with some trading to survive till the end of the civil war, which last for over 2 years. After, the war ended I went back to the place where our plant was and found that it was totally vandalized and finished. “Starting from scratch with the very little left behind” we rebuilt the company gradually. I also grew with the Company and became its managing director in 1979. By the time I left Nigeria it was a thriving business of virtually 50 million dollars producing a wide range of products such as electrical products like deep freezers, air conditioners, refrigerators, fans etc and steel furniture for offices, libraries, educational institutions, hospitals etc. So, that I think was the biggest challenge where nothing was available and we did all kind of crazy things to achieve it. Mr. G.P.Birla used to directly look after the Nigerian operations and it was his constant encouragement and inspiration, which was responsible for whatever we could achieve in Nigeria.

When I came back to India in 1988, I was asked to look after the Hindustan Motors plant in Kolkata. This was another tough assignment, which I could somehow manage with the support and guidance of Mr G.P. Birla..

Then one fine morning Mr G.P.Birla asked me to look after Orient Paper & Industries Ltd. I mentioned to Mr Birla that that I had no experience of running a paper or a cement plant and may not be able to do justice to his trust.

Mr. G.P. Birla then said something that was remarkable. He asked me “did you know everything from your childhood about what you did in Nigeria or in Hindustan Motors. Just as you learnt there you will also learn here”. I had no answer to this and took up this new assignment with a sense of fortitude in response to Shri Birla’s trust. Mr C.K.Birla, looks after the Group is equally kind and compassionate.

Thanks to the encouragement and support of Mr C.K. Birla, Orient has grown considerably in the last few years from a turnover of around Rs. 750 crores in 2003-04 to nearly Rs. 2000 crores now. We have just completed further expansions in all our 3 businesses i.e. Cement, Paper&Electricals. In cement, our capacity stands enhanced to 5 million tons per year from 3 million tons. Our new Tissue paper plant has been commissioned recently, bringing our tissue paper capacity to 25000 tons. In electricals division, apart from expanding our capacity for Fans, we have started manufacture of CFLs. These recent expansions will see substantial further growth in our turnover and profitability hereafter.

Working in Birla Group,“it feels great and I amgrateful to god for giving me this opportunity to associate with the G.P./ C.K. Birla group. It has been a very long and a happy association and I have learnt a lot”

Birla group has always believes in the philosophy of making people take full ownership. I almost consider myself as a part of the family and when I work – I treat it is my own company. The group has people who have spent their life time here. This sense of belongingness, created by the group, is the binding factor.

Our group follows very strict business ethics. Whether a particular unit is doing well or not we have to follow the laws of the land strictly. This is the guideline we have set for ourselves that we should do nothing that may be detrimental either to our nation or the community. I remember Mr. G.P. Birla telling me once that “Tumhari company bhale kaisi hi chalepar koi kaam illegal nahi hona chahiye”. That’s a very strong guiding factor for us. One has to be fair to his employees, customers, suppliers, vendors and to everybody. While profitability is the ultimate objective but we should earn it in the most ethical way.

Our group also undertakes a lot of philanthropic work like setting up hospitals, universities, schools etc where we provide services to the needy people at the subsidized rates.

The idea of communication has to be 360 degrees, he explained: I have to be accessible to the people they shouldn’t feel odd to come and talk to me and vice versa. We may not solve all their problems but at least give them a good hearing. So, this is how we continue to operate and grow.

Integrity, commitment and team work are the 3 things important for the success of the organization. Nobody can achieve anything individually. It is a matter of team work. Everybody has to come together and work. We believe have to perform best internally side lining the things beyond our control he explained when talked about learning’s.

Commenting about the tissue paper market he said, “When we first set up a tissue plant with the capacity of 10,000 tons, the Indian market demand was 3000 tons but within 4- 5 years we came to a situation that we could not meet the market demand as demand was growing fast because of the change in lifestyle. Use of toilet rolls, paper napkins, paper towels which was fairly rare earlier have become common gradually.

Ofcourse large new capacities have been added recently. It is unlikely that these new capacities will be fully absorbed by the current domestic demand but I am convinced that the demand will slowly catch up in the coming years. In the meantime solution lies in exports. There is good demand outside and the Orient products are accepted worldwide. The strategy is to be globally competitive so that in the short run we can export until the domestic market grows adequately.

According to him the things that could bring a positive change in the paper industry were:

• Availability of land for plantation for increasing our raw material base for the increasing demand of paper as education and economy grows.

• Increase in export of Paper & paper products

• Increase in availability of technically qualified young people in paper technology.

At last replying on our question about challenges in handling a diversified portfolio he said: “Whether I handle a diversified or a single portfolio, a there will be challenges. Even my plant people who handle a single plant face challenges. There are challenges in everyday life but we have to deal with them to the best of our ability and continue to drive growth. That is where fun and excitement lie! he concluded.

The man with substance has proved his mettle in the industry. The man had traveled so far and holds the milestones of diversified knowledge and skills. His persona reflects his positive attitude and logical thinking. In conversation with team Paper Mart, Mr. Madhukar Mishra speaks on various subjects.

Experience in Diversity

Graduation in finance and a management degree from Mumbai. Started his career with Parimal group having diversified business. Began with their pharma division then moved to the chemical business. Then moved over to engineering with Shree Ram Group in Delhi wherein had the opportunity to work with Lala Jagat Ram, which was a great learning experience. Then had a challenging experience in a completely export oriented food & grain business. Then moved to Duncan Goenka group in the corporate strategic growth unit and finally, moved over to Star Paper Mills.

Views on the framework of paper industry

Paper industry is complex both in terms of product range & technology. On surface it looks as a homogeneous industry but as you go in, it’s a heterogeneous industry. In paper industry no two units are comparable unlike in consumer products or other industries like steel, sugar, cement etc. There the products are comparable and have substitutes but here the substitutes are not easily available, so that’s a new learning and an important aspect of the industry.

First hard lesson learnt

In the initial stages of my career the economy was not globalized, product rates were high, and import barriers were present. But suddenly found that there was a turnaround in the government policies, globalization took place and international trade started which impacted all the beautiful planning and projections made on the assumptions, along with mobilization of all the resources. This learning was hard to digest but sweet to swallow.

Pros & Cons of diversified experience

There are both pros and cons of the diversified experience for example the people who have spent 30-35 years in the same industry will have an in-depth knowledge as compared to a person with diversified background. But, the person who is from a diversified background will have an edge of diversified learning’s to deal with varied situations. Diversified background will bring better understanding and learning at the time of transformation, the interaction point which is going on at present. So to bring some different business modal in the paper industry we were the first company in India to start the online booking system five years back.

Experience of revival of Star

In late 90’s, paper industry went through a dull phase. At that time the things got difficult for Star and then the charge was handed over to me. The unit was not performing well because of its high cost base and poor technology. The outsiders thought the survival is very difficult for us and the morale of the people was down. But with good analysis, proper planning, team effort & fine execution ultimately things turned around for us. There were lot of negatives but the brand image had helped us in the market.

Success mantra

To be successful one should be passionate, fortunate and I work with full passion on every task undertaken by me and I am fortunate enough to complete every work successfully. I am very straight in my thinking wherein if something I can’t do I will not go forward but, if something I can work out I’ll do it.

Advice to the paper industry people

Before going for the expansion you must analyze your inner strengths .The industry is going to transform itself at a very fast pace. Already there is a lot of competition but the present scenario will change and sellers market will shift to buyers. Thus all the mills will have to gear up the delivery systems and will have to learn to “first stock & then sell” like all the FMCG industries do. Also I feel that the paper industry will shift to coastal areas from being a inter land based industry, so that the importing raw-material and exporting output to international markets is more viable.

Most Eureka moment of life

When I was in the food and grain business we used to import all of our inputs and export entire production and it was a tough competition at that time. We were the team of 2-3 people and were able to fetch 50% market share globally in the product line where we operated. And, in fact one of our major competitors was forced to close down his plant and become our minority partner.

Expansion at Star Paper Mills

In August last year we had finalized one machine but then due to delay in approval from the board of that mill and the sudden emergence of recession our decision was delayed. But, now the things are on the verge of stabilization so we’ll again start working on the expansion. Moreover the reason that we did not do major expansion was that we first wanted to fix the weaknesses of the company. Later next year we might go for a second hand writing & printing paper machine with a tentative capacity of 120,000 TPA, while the pulping line will be new. The current equipment will then be re-designed to fit into further special grades.