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.

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(Moderator) Mr. Pradeep Dhobale Executive Director, ITC Limited, PSPD

On his way of starting the proceedings as a moderator he gave a small example about 2 schools of thought and how they perceive India as a market. Recently he saw a headline in one of the business dailies that Indian economy is crawling with a GDP growth rate of 6.1%, which is the lowest ever in almost 3 years and was a point of concern. On the other side it was written that USD 12 billion of FII investments came to India in first 2 months of 2012. Stating this he said, “what is the point of contradiction? On one side everyone in India is worried that the GDP growth rate is rated down to 6.1%. And, on the other hand people sitting outside India are investing billions of dollars here. These people are pure analysts and they don’t go by market sentiments. They feel India is a great opportunity and their perspective is long term when it comes to investments. And sitting here we are having a gloomy picture of 6.1% growth rate and panicking.”

As far as paper industry is concerned the drops are sharp with profits going down. But, at the same time investments are happening. The per capita consumption of paper in India as compared to the other countries presents a huge potential. And, going forward the growth rate of India would probably be the highest in the world. Now, given everything else depends upon what we do as an industry to keep ourselves growing. The ball is entirely in our court, if here is the market which is growing fast then it is for us to control cost and make good quality of paper at affordable price.

Mr. Neehar Agarwal, Sr. Vice President (Opns), Ballarpur Industries Ltd.

In my opinion the biggest challenge faced by the industry is how to make money and grow. In the current scenario our input cost is rising and selling prices are under pressure. As an economy we are now integrated with the world so there is no differentiation between the domestic or international market. Ultimately we have to become a seamless market.

Looking at the pie of paper making cost the lion share of 35 to 40% is of raw material, followed by energy, which is 25 to 30% and the balance is accounted for some packing, chemicals, manpower, metals etc. In the last 2-3 years, the raw material and energy cost have been growing at an average growth rate of 10% and 20% respectively. In comparison to the total variable cost of paper making that is growing at a CAGR of 10%, the selling price has risen only by 3% in last 3-4 years. This resulted in the decrease of EBITDA margins for the industry from 30% to 20% for integrated producers and non integrated producers are nowhere in the game now.

Another weakness in the paper industry today is the economies of scale. You can count the number of paper machines in India which are of a medium size of 150,000 tons or more. In fact in global context, whatever largest machines we have in the country is of medium size as compared to them. In India we are still bogged down by small scale equipments and the biggest problem with the small equipment is that you use the same number of manpower in 500 ton mill as you use in a million ton mill.

To give you a small example of economies of scale sometime back I visited the APRIL’s Rizhao mill in china, which is a million ton pulp mill. For making pulp they are buying chips from outside and their cost of chips is USD 400 to produce a ton of pulp and they are happily selling pulp at USD 550 and making money. Their conversion cost from chips to pulp is USD 100. But if we look in India we have raw material cost of USD 200 and on top of that our conversion cost will be at least USD 200 to 250. So this is where the economies of scale make difference in the overall cost of production.

Another major challenge in India is the cost of funds, and that is the reason we are not able to invest in technology and compete with china. Today our cost of funds is 10-12% which goes as high as 14%. If we calculate equity cost in the capital turnover ratio for an integrated mill stand out to be 0.6, which means if we invest 100 crore in a plant in paper making, our turnover will be only 60 crores. And, coupled with that, the EBITDA margins of 20%, the ROI turns out to be 12%. So how do you justify an investment where cost of capital is 14% and return of just 12%. This is where our suppliers have to play a pivotal role and understand how the cost of equipments can be brought down.

The biggest challenge that becomes the major constraints on our growth path is the availability of fibre. Every year 60,000 hectares of area is planted by the mills but this is not enough as it hardly covers only 40-50% of the wood requirement. So I think the industry at some point of time has to go off shore. We have to integrate the raw material production outside the country and paper production inside. This is a challenge for us but also an opportunity. The other countries like China and Japan have done this way in the past, as they don’t have raw material availability in the country. The industry has to look upon it seriously so as to put up the pulp mill where the trees are and a paper machine where the market is.

Now looking at the opportunities, India is a growing market. The GDP is expected to grow at a rate of 6.9% despite of the last quarter low GDP of 6.1%. Paper being heavily linked with GDP of the country is expected to grow at the same rate and industry is likely to double its capacity from 10 million tons to 20 million tons by the end of this decade. We are a country of 1.2 billion people so every increase of 1 kg in per capita consumption would mean a demand of 1.2 million tons per year coming up. I think we have the only way to go and that is upwards.

Indian printing industry being fragmented presents both challenge and opportunity to service this market. Having varied needs this become the deterrent for the import to come in and at the same time it is an opportunity for us to serve and en-cash these markets by providing good quality, better sizes and serving the remote printing presses and get premium as compared to imports. Another opportunity which is coming towards us is the substitution of paper in place of plastics for instance the supreme court ruling on gutkha packaging has opened up the big space for us. Industry need to extend this to other products like pharma, FMCG, cosmetics etc. and has to take the lead in developing new and innovative products to replace the plastics and at the same time giving good margins.

Mr. M.L. Paschisia, Managing Director Orient Paper Industries Ltd.

I am a great believer in the Indian growth story and these minor hiccups that we have are self inflicted. Although we are not insulated from the rest of the world but ours is the economy that is based on internal consumption rather than exports like China, which is largely dependent on overseas market.

India is on the threshold of major leap going forward. And, I don’t think unless we mess it ourselves there is anything that can stop India growing. Not too long ago, we use to talk about Indian consumption being 6 or 7 kg per person but today we stand for about 10 kg. This is due to growth in all the sectors like education, packaging, newspaper etc. For instance when Orient put up its tissue plant of 10,000 tons capacity we use to wonder where we would sell this capacity because Indian market at that time was not more than 5,000 tons. But today tissue in India is a healthy is 60,000 or 70,000 tons market and continues to grow. Similarly paperboard, writing & printing and newsprint are also bound to grow.

The challenges before us is that how can we grow profitably on a sustainable basis with our own local manufacturing. The pressure of rising cost of production which continue to go up and probably will rise further and we are restrained to increase our prices beyond certain limit. Because in an integrated market if you raise your prices too high then imports will take away the pie so you are also restricted by what you can do in the market place. Every investor who puts his money wants to know what return he will get. People talk about the threshold of at least 18% IRR and if you are very pushy may be 15% is acceptable. The question is can paper makers produce that kind of IRR to be able to sustain larger investment.

We talk about modernizations, new investment, capacity expansions but to do all these we need to tackle the constraint of raw material. Industry is doing scattered plantation through farm forestry on the marginal land of 5 acres or 10 acres. The cost of collecting the harvested pulp wood and transporting to your own place increase the logistics cost. From the past 15 years we have been trying to get degraded forestlands from the government but there is no response. Other issues like increasing cost of energy have to be looked upon in order to minimize the cost. Paper industry is not known to be a wealth creator that is why paper companies are traded at much lower PE than many other industries. Industry collectively has to find the answers of how can we do these modernization at optimum cost,what technical innovations can be brought in so the investment on the machines is lower and what steps can we take to tune our existing facilities so the returns can be justified.

Mr. Anil Kumar, CEO and Executive Director, Shreyans Industries Ltd

The results of the last 9 months drop of the paper industry are attributable to what we did in last 3 years, which was the sign of industry doing extremely good both in terms of volume growth and general profitable level which resulted in almost indiscriminate expansions taking place. Today market condition are not bad, because of the demand going down or not expanding as per as the expectations but because of the oversupply situation which has happed in last 3 years.

Being into writing & printing sector my parameters of comment would be on this sector only. We almost added 1.5 million tons of capacity during last 3 years against, the base of 2.5 to 3 million tons, which is a massive expansion considering an average demand growth of 6-8%. This created a short-term mismatch between the demand and supply. And on top of that the sharp increase in energy prices has an immediate impact on the bottom line of the companies. But I am one of those optimists who feel that paper industry would grow over 7-8% in this decade. The growth drivers are intact and nothing has changed. Internationally we are one of the fastest growing economies in the world.

On our course to the growth path we have to invest in the technological innovations irrespective of the sizes and scale of operations. I believe that in the near future the small and medium size mills are here to stay because of geographical diversification of the market and the vast panorama of different customer groups. The machinery suppliers will have to cater them by scaling down sizes of equipment and affordability. So, these mills could take the advantage of the new technological developments. Unless you bring in the technology, you don’t know what advantages does this technology is going to bring. Your estimates will only be evaluated once you bring in the technology and then you realize that economic advantage is much higher then what you have thought while planning to install that technology.

On the sustainability aspect, the days have gone by when we were able to manage the local administration. But, today the society and the environment around us will not permit us to operate in the condition where minimum requirements are not being complied.

Being in the agro based industry I believe that availability of fibre will be a challenge where the external interventions like government or society does not bring in additional fiber. Availability of bagasse has shrunk because of the development of alternative usages like renewable energy. In case of wheat straw the collections system has to be made better in order to tackle the challenge.

Mr. P.S. Patwari, CEO and Executive Director, Emami Paper Mills Ltd.

In my view there are opportu-nities in all the segments of the paper industry for instance writing & printing, newsprint and packaging are growing at the rate of 7-8%, while copier paper is growing at 15%. Total demand of newsprint in our country is 2.2 million tons and 50% of this is met through imports and rest is produced indigen-ously. In spite of conti-nuous reduction in the size of newspaper in last 10-15 years, the annual growth in this segment is around at 8-10% pa. There is a ready market of 50% for the Indian manufacturers to serve and accordingly we can plan our expansions. And, if we have to replace imports we have to produce good quality paper.

For producing good quality newsprint availability of the waste paper is the challenge. Waste paper collection system in our country is not good. Because of some cultural problems in our country, we are not able to increase the specific collection systems. That’s why we have to partly depend on imports. Above all we have to develop quality manpower and for that we have to improve our image so that new talent can be attracted to the industry.

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Mr. C.S. Panigrahi, President & Managing Director, Voith Paper Technology (India) Ltd.

India and China are the main topics of discussion at every forum whether in India or outside. India is known to be the fastest growing economy in the world today compared with growth of other countries. So it is a very optimistic situation. Overall paper is growing at 6-7%, in which packaging sector is growing in double digits 10-14%, which is much better than other countries. I don’t endorse that problems like raw material, energy, water conversation are not there but I am sure with the efforts we are taking, we will overcome them. The challenges that were in the past I have not seen them being eliminated rather new additions are being made. Trees are being cut but instead more trees are also planted. In fact ours is one of the industries, which is most friendly to the environment. We need to tell this story to the people that we are doing right and in a correct way. Today remedies are available and we have to challenge the situations. We should not waste what we have rather take measures to conserve it. Being a supplier we depend on the paper industry and we try to develop solutions according to the conditions like when the bagasse was used as a raw material there was run-ability problem. To counter that we changed our machine configurations, this helped the industry to run the plant by using bagasse. We should come out of the fear zone and think out of the box and master those challenges.

Mrs. Jyotasana Shrivastava Business Director (Paper Chemicals) BASF India Ltd.

I would like to start my views by clearing the myth which paper industry believes that the chemical suppliers have big fat bottom line. It’s a wrong perception we as suppliers also feel the pain of the industry. Being a part of the industry we are here for the partnership and to see the industry gaining. Nevertheless the challenges are there but we need to find out how new opportunities can come to us. I remember some 10 years back during our international or regional meets whenever a presentation on India used to come people try to skip it because they don’t find those figure critical for their strategy. But now the table has turned and India is now the most looked upon market in the world.

India’s GDP is growing at 6-7% which is the highest compared to the world’s average of 2% and Asia average of 4%, so opportunity is here. Let’s start with tackling the problems and bank upon the opportunities. Another area is that we also should not shy away from the fact that the technology is changing and we need to keep pace with it in order to grow. In the next 5 to 10 years there would be a de-linking of the growth rate of the writing and printing paper from the GDP which is the trend internationally already due to electronic media. But, the packaging sector will increase with the increasing demand of consumer goods. The concept of eco friendly paper will rise due to environmental concerns.

We need to look at the different uses of paper, which can be created by increasing their functional properties like label papers, security papers, medical papers etc. Earlier when we used to visit any customer they won’t entertain us thinking that using chemicals would be the waste of money. But, today the perceptions are being changed due the quality demand from the customers. Indian paper industry needs to en-cash on the capability of the chemical supplier to be able to enhance the quality of the paper. Improving on technology will not only prove incremental but sustainable too for industry as a whole.

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.

PSPD has been organizing suppliers meets in the past, but this time over 450 suppliers, the largest contingent ever from across the globe, have congregated at Fortune Select Manohar Hotel Hyderabad for a day long interaction with PSPD’s Technical, Commercial and Finance teams. This is a unique achievement by ITC PSPD as no other paper company in India has ever done it.

Several interesting issues were presented related to Global and Indian paper industry. Economic conditions in China, Europe and USA and impact of the same on paper industry were discussed. Technological developments in various aspects of papermaking were presented by experts from global leaders like BASF, SKF and NALCO etc.

Mr. Sanjay Singh, Divisional Chief Executive of PSPD, gave an overview of PSPD’s growth plans and what is expected of the supply chain partners in implementing those plans.

A message sent by ITC Director Mr. Pradeep Dhobale addressing the suppliers was read out. He sought the support of the supply chain associates to make ITC PSPD India’s largest paper company and thanked them for their support extended so far in providing quality inputs and services.

Unique feature of this Supplier Interface was that they have tried to cover all the partners in supply chain like CNF agents, Transporters, Shipping companies, Material Handling contractors, Ancillary Industries exclusively operating for PSPD, in addition to all key input suppliers.

Mr. Vimal Kishore Chief Executive - Paper Division Orient Paper & Industries Ltd.

Profile

He is a certified chartered engineer in chemical engineering from “H.B.T.I. Kanpur” and has done diploma in business management from AIMA, New Delhi. Has more than 3 decades of management and professional experience in various prominent Indian paper business houses like JK Paper, Century Pulp & Paper, West Coast Paper Mills and Orient Paper & Industries. Presently, he is working as CEO in Orient Paper, Amlai, heading the paper business. During his career he also did a project of non-woven fiberglass tissues in U.P. Twinga Fiberglass Ltd.

Main area of work

He is deeply involved in various manufacturing operations, projects, technical, managerial and administrative functions and has also led various research and development projects. At Orient Paper, Amlai, he has commissioned the new tissue machine and consolidated the tissue product range. He has worked extensively in various areas needing immediate attention like water & energy conservation, natural resource and environment management, cost reduction.

Approach towards work

He believes in team building and providing highly conducive work environment to the team. Improving the process & maximize qualitative production having minimum environmental impact with minimum investments are his forte. He also had to his credit some of the India’s first technology initiations into the paper industry like ECF pulp line, enzyme bleaching, conceptualizing & installing of state of art DIP plant etc.

Importance of investment in technology

Technology plays a vital role in achieving the business goal mitigating the environmental needs. Thus investment in technology is certainly for the up-keep of business and environmental justification.

Mr. Santosh Wakhloo Vice President - Packaging Board SBU JK Paper Ltd.

Profile

He has done B.E. (NIT, Srinagar) and MBA, PGPMAX (ISB, Hyderabad).

Main area of work

He was heading the sales and marketing function of coated paper and thereafter of packaging boards of JK Paper. Recently he got the responsibility of managing the entire packaging board business. Currently the company is manufacturing approx. 90,000+ MT of premium virgin fiber boards.

Approach towards work

His approach towards work revolves around understanding customer needs (both internal and external) and marrying them to the capabilities and objectives of the company. Success is always an outcome of teamwork. He firmly believe in working together as a team, fostering an open work culture where ideas are discussed, debated and agreed upon before implementation. He sets challenging targets without fear of failure and ensuring that the pressure to achieve is shared equally between him and the team. Also, tries to praise, compliment and encourage the team members not only on achieving targets but also on the efforts put in to achieve the same.

Importance of investment in technology

If we study any industry or product category two facts are universal

• Quality of products and services are of paramount importance in any business. Today, both these need to be bundled together as a package.

• Manufacturers of good quality products command respect and premium from their customers and never face a dearth of orders. On the other hand poor quality manu-facturers have to fight to get orders and fetch little premium or respect.

With industrial intermediate products like our packaging boards, consistency of product and service is what constitutes quality. Higher human intervention leads to compromise in consistency and as a consequence quality tends to suffer. The only way to improve consistency (quality) is through investment in the right technology. We should invest in “Fit for Purpose” technology.

Technology is expensive to begin with, but it pays more for itself as it delivers value by lowering running costs, post manufacture wastages / rework, defects and also fetching better value from customers. With decreasing availability and increasing cost of labor investment in technology would give better returns in the immediate future.

Investment in environment friendly technologies has a long-term horizon but is the need of the hour. We have a responsibility towards the society at large and now customers have begun demand products from companies which are environment friendly. This is evident in customers asking for responsible forestry based products specifying FSC Certified paper or even pays a premium for such products.

In a nutshell I would like to state that investment in right technology is the only success mantra for the future. If we have to survive and grow this is something we really need to focus upon.

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Mr. AV Rao Vice President ITC Ltd - PSPD

Profile

He is a graduate in mechanical and marine engineering from Andhra University. He has a varied experience in maintenance and operations across shipping, textiles and forest based pulp and paper industry. During his career in shipping he has worked with U.K. and Hong Kong based shipping companies with international exposure in maintenance and operations of merchant ships. His experience in paper industry is around 20 years.

Main area of work

He is currently heading divison’s projects department and has the additional responsibility for the operations of Kovai, Bollaram and Tribeni units of the division. He has introduced some of the latest state of the art technologies at the division that has made the unit Bhadrachalam one of the world’s best mills. He has been the champion of the Bollaram unit’s turnaround while he headed the unit. He headed the operations of Bhadrachalam unit, the largest integrated pulp and paper facility of India for three years. He has championed the project symphony as the business manager and implemented the most complex solution of SAP in the division. He has handled the major projects of PM5, PM6 and the modern pulp mill at Bhadrachalam.

Approach towards work

He has passion for working with modern technologies in process, automation, environment and energy management. He truly believes that “paper is a biodegradable, renewable, sustainable product made from trees and annual plants. Growing and harvesting them provides jobs for millions of individuals, and managed forests are good for the environment, providing clean air, clean water, wildlife habitat and carbon storage.”

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Mr. R. Mani Chief General Manager - Operations Tamilnadu Newsprint & Papers Ltd

Profile

He has done B.E. (Hons) in Mech. Engineering.

Main area of work

He co-ordinates production & maintenance of all process areas and service functions in the mill along with improving environmental performance of the mill.

Approach towards work

Sub-delegation of powers and obtain regular reports on the performance of various production areas. We should monitor the overall equipment effectiveness of production centres and total cost of maintenance to take decision on replacements. Apart from this the key focus areas should be energy & water conservation and cost & waste reduction.

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Mr. M.K. Goyal - Vice President Business Development Wires & Fabriks (SA) Ltd.

Profile

He is alumnus of IPT, Rorkee from the year 1969 and has been serving the industry from last 42 years. He started his career with Andhra Pradesh Paper Mills, then served Rohtas Industries before moving to Shree Dinesh Mills ltd and currently, associated with Wires and Fabrics Ltd as VP – Business Development.

His main area of work

He has been handling techno commercial function with machine clothing industry since 1971. He moved to Shalimar Wires and Industries Ltd in the year 1975 and served them for next 25 years. He has travelled widely to several European, South Asian, Gulf and African countries and created a slot for Indian machine clothing manufacturer in those markets.

Approach towards work

He believes in trying & trying till the success is yours. This philosophy has helped him in achieving success in the development of polyester fiber for paper mills when he moved to Reliance Industries Ltd in Mumbai in the year 2001. Besides identifying the opportunities and pursuing it beyond a point is one of the traits of his persona.

Importance of investment in technology

I strongly believe that technology and quality will be ultimate winner in the race. Currently when industry is passing through turbulent time, good quality will lead to customer preference and in good time will give higher returns. New technology and equipments result in direct cost reduction and deliver product of high quality. With opening of economy and China as our neighbor & competitor in every field, there is no way that we can shy away from acquiring tomorrow’s technology today.

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Mr. Sunil Kumar Jain Sr. President Emami Paper Mills Ltd

Profile

He has done post graduation in paper technology and diploma in business administration. He has been working in the industry for more than 3 decades and has climbed the ladder from shift in-charge to senior president of large pulp & paper mills in India. He has hand on experience of production, maintenance and executing big projects through the understanding of working in leading paper mills like West Coast Paper Mills, Hindustan Paper Corporation, Orient Industries, Rama Newsprint & Papers, Khanna Paper Mills and Emami Paper Mills.

Main area of work

His main area of work is to handle entire mill operations, project formulation and execution. He has been catalyst in installing the country’s fastest newsprint machine running at 1125 m/m speed at Emami Paper Mills. Apart from this, he has implemented the project of almost doubling the capacity of Khanna Paper Mills within record mill shut down time with latest technology by increasing overall productivity and reducing production cost. Presently, he is responsible for project development and mills troubleshooting.

Approach towards work

He believes in building good and strong team comprising of younger technocrats having result oriented attitude.

Importance of investment in technology

To survive in today’s competitive market, mills technological up-gradation is the only answer. Technology can give best efficiency with overall productivity.

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Mr. Pradeep Aggarwal Vice President - Technical Magnum Ventures Ltd

Profile

He is an alumnus of IPT, Roorkee from the year 1977. He is being serving the paper industry for more than 35 years.

Main area of work

He started his career from Rohit Pulp & Paper Mills Ltd and his main area concerns with paper manufacturing and quality control with cost savings. In last 14 years he has the experience of managing 200 TPD plants irrespective of variety of paper such as coated duplex board, writing & printing paper, newsprint, tissue and kraft paper. Apart from production & quality he has also worked in other areas like co-generation power project, new machine erection & commissioning, dismantling of old machine out of India, deinking projects etc.

Approach towards work

Be positive irrespective of the conditions.

Importance of investment in technology

The technology is changing fast and we have to go along with it. To produce best quality products with cost savings and maintaining the environment we have to focus on new technology avenues.

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Mr. R.K. Jain, President Pulp & Paper Division Kohinoor Group of Companies

Profile

He has done B.Sc. (Engg.) – Mech., F.I.E., F.I.V, chartered engineer. He is associated with paper industry for more than 5 decades. In his work span he has provided consultancy and has worked in various paper companies primarily handling projects in mills like Bindal Paper Mills Ltd, Naini Tissues Ltd, Khanna Paper Mills, Bengal Paper Mills etc.

Main area of work

He is handling the 250 TPD greenfield writing & printing project in Assam with the investment of Rs. 560 crores. The commercial production is expected to start in March 2013. His area of work includes overseeing detailed engineering work, vendor selection, site monitoring of civil work and placement of order, execution, installation and commissioning. In the project cooking line, fiberline, evaporators are being sourced from Metso and other orders will be finalized in March-April 2012.

Approach towards work

Be open to innovations and curious to find solutions, fight and take challenging opportunities.

Importance of investment in technology

Investment in new technologies, instrumentation, automation, continuous monitoring, adopting latest tools for study & analysis will definitely lead to value creation in terms of international level of quality at lower cost, highest efficiency as well as environment friendliness.

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.

The project investment will be approximately EUR 1.6 billion. Construction at the industrial site will commence when specific preconditions have been fulfilled, which is expected to be in the second half of 2012. Production is scheduled to start in the fourth quarter of 2014. The investment will significantly support Stora Enso moving towards company’s 13% ROCE target.

The project will be financed through a combination of debt and equity on an approximately 60/40 basis. The debt financing is expected to be a mix of export credit agency, multilateral and commercial bank debt.

“Today we are taking another significant step in transforming Stora Enso into a global renewable materials company. We already have a globally leading position in renewable fibre-based packaging boards. We will now invest in a world-class integrated mill based on locally grown renewable materials for the benefit of local Chinese consumers in the fastest-growing market. Everything we do will be based on best-in-class technologies, environmental standards and sustainability practices – together with the local partners and communities” says Stora Enso CEO Jouko Karvinen.

Jouko Karvinen - CEO, Stora Enso

Growth together with customers – strong growth forecast in fibre-based packaging in China

The fibre-based liquid packaging board segment is one of Stora Enso’s strategic focus areas and this investment is consistent with the Group’s announced strategic guidelines. Through this investment, Stora Enso seeks to benefit from the forecast future growth in demand for fibre-based packaging solutions for food in China, which is forecast by several researchers to grow at a compound annual rate of over 10% during the next ten years. This investment will also enable Stora Enso to provide excellent service with cost-competitive, locally produced high quality liquid packaging boards on a regional basis for its global key customers that are already well established in China.

Stora Enso’s present operations in China

Stora Enso has been establishing plantations in Guangxi since 2002. The Group currently holds approximately 90,000 hectares, and is to establish sustainable eucalyptus plantations with an effective fibre base of 120,000 hectares to support the new pulp mill in Guangxi. The Group’s other operations in China include a 245,000 tonnes per year coated fine paper mill in Suzhou, a 170,000 tons per year uncoated magazine paper mill at Dawang, two core factories, five sales offices and the newly acquired majority shareholding in Inpac International, a packaging company with production operations in China and India, and service operations in Korea. The total number of employees in China is currently about 4 500.