Khanna Paper Mills Carves a Niche in the Packaging Board Segment, Focussing on FMCG Sector

Khanna Paper Mills produces 160,000 tonnes of coated board grade annually and 240,000 tonnes of newsprint and other paper grades per annum. It is one of the country’s largest consumers of secondary fibres, utilizing approximately 390,000 tonnes secondary fiber, with a total production capacity is of 4 lakh tonnes per annum. In an exclusive interview with Paper Mart, Mr. SVR Krishnan, Executive Director – Operations, Khanna Paper Mills, shares insights into how the company’s packaging boards are widely used by leading national and international FMCG brands. Their strong presence in the packaging segment is driven by flagship products such as the ‘Diamond Grey Back’ for duplex boards and the ‘Dezire’ brand for folding box boards, creating a niche in the packaging segment. Going forward, the company aims to focus on both backward integration and capacity expansion, alongside product development, to strengthen its position as a key player in the packaging segment.

Paper Mart: Could you begin by giving us an overview of your packaging paper and board operations – including your production capacity, facility locations, and manufacturing setup?

SVR Krishnan: We, at Khanna Paper Mills, manufacture coated recycled and virgin fiber based boards, writing and printing papers, copier papers and newsprint grade. The company is a ‘one-stop-shop’ for all cultural and industrial needs.

We produce 160,000 tonnes of coated boards and 240,000 tonnes of newsprint and other paper grades per annum. We operate two paperboard machines equipped with cylinder moulds and pressure formers, along with two high-speed paper machines featuring top formers.

We are the single largest consumers of recycled waste paper or secondary fibers in the country, using close to 390,000 tonnes per annum. Currently, we operate from a single location in Amritsar, Punjab.

PM: Please walk us through your current product portfolio. What grades, GSM ranges, and end-use applications do you cater to, and are there any specialty packaging paper and board products you offer?

SK: Our current product portfolio includes virgin and recycled fiber-based packaging boards, ranging from 200 GSM to 450 GSM basis weights. In paper grades, we produce writing and printing paper ranging from 54 GSM to 120 GSM, and newsprint grades ranging from 42 to 45 GSM. Our products are sold to the consumers through a vast dealer network and the majority of our market is in the northern part of the country itself.

Our packaging boards are used by the leading national and international brands in consumer goods or FMCG. Our papers are utilised in the text books and notebooks by leading publishing houses and our newsprint grade is utilised by the leading regional and national newspapers or dailies.

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PM: Which are your key domestic and international markets? How has your market footprint evolved in the past few years?

SK: As mentioned earlier, our key markets include leading FMCG brands and printing and packaging houses or converters. Over the years, we have established a strong presence in the packaging segment with our flagship brands—‘Diamond Graphic Grey Back’ for duplex boards, ‘Dezire’ for folding box boards, ‘Elegance Super Print’ for writing and printing papers, and ‘Impact Super’ for newsprint. Each of these product grades has carved out a distinct niche within the printing, packaging, and publishing industries.

We supply a proportion of our paper volumes to countries like Sri Lanka, Nepal, Egypt, and Kenya etc., depending on the business feasibility and the need to balance the existing volumes between domestic and export markets.

PM: Sustainability is becoming a cornerstone of packaging. What steps have you taken to integrate environmentally responsible practices into your manufacturing and sourcing?

SK: Sustainability is a key factor in today’s business landscape. With the environment being the first component of ESG reporting, we now view the entire supply chain through the lens of economic circularity. All our processes and new capex project initiatives are undertaken, keeping environmental protection and business sustainability at the forefront.

The freshwater consumption, electrical power usage, and the overall energy efficiency and associated costs are given the highest priority—right from project conceptualisation and vendor selection to final execution—in order to strike a balance between environment and economy.

PM: How has demand for packaging paper and board evolved post-COVID and amid growing e-commerce and FMCG consumption? Which segments are currently driving the most growth for you?

SK: During the COVID-19 pandemic, we often spoke about the ‘new normal.’ However, in reality, we find ourselves in a deeply abnormal global scenario post-2023 due to geopolitical disruptions, including the Russia–Ukraine war, the Red Sea crisis, the Israel–Gaza conflict, unrest in Pahalgam and the Thai–Cambodia region, and recent U.S. policies imposing higher tariffs on India.

Practically, we are yet to see a good complete year. The pulp and paper industry has taken the worst hit post 2022–23, across all four quarters, due to its high capital costs, thin margins, and overdependence on imports for raw materials (waste paper and pulp grades). However, the thrust of eco-friendliness, sustainability, e-commerce boom, increasing levels of education, packaged food, beverages, pharma and electronic goods industries are driving the growth of quality paper and boards.

The global focus on the prevention of using single-use plastics, provides a great opportunity to the paper mills to develop a suitable and sustainable alternative to LDPE coatings or poly extruded paper and paper boards. This emulsion-based barrier-coated paper and paperboards are gaining momentum all across the globe.

PM: According to recent global market data, the packaging paper and board market is projected to grow steadily through 2033. How are you positioning your business to tap into this rising global demand?

SK: The growth of the paper and paperboard will be steady in the coming years till 2033, with the projected growth rate of 4-5% each year. Notably, the packaging board was growing at the rate of 12-14% just before COVID-19 period and the same segment dipped in the last couple of years. But now we expect a moderate growth of 4-5%.

Similarly, the writing and printing paper was growing at the rate of 6% before COVID. And now we will see a growth of 4-5%. This growth trajectory is normally followed by our country’s GDP growth, which is now projected to be at 6-6.5%, for the current year 2025-26.

We, at Khanna Paper Mills, are very optimistic about this growth trajectory of good quality paper and packaging boards, due to the major push on literacy level, industrialisation, urbanisation, e-commerce, Q-commerce and technological advancements in the business landscape.

PM: What are some of the most significant technological upgrades or process improvements you’ve made recently in your mills to enhance quality, reduce waste, or optimize energy usage?

SK: We have recently done many rebuild projects , focussing on the overall efficiency and improvement in the areas of quality, productivity, water and energy conservation.

To name a few advancements, we were the first in the country to install and commission the high-tech headbox- Master Jet Tech-3 (from VOITH) on one of our high-speed paper machines. We now plan to install a second Master Jet Tech-3 headbox on our second high-speed machine. This upgrade will significantly enhance the overall quality of the final paper product by providing precise control over cross-profile uniformity, achieving up to 40% improvement in two-sigma grammage and moisture profiles, along with superior paper formation.

We have replaced our high power-consuming liquid ring vacuum pumps with the single and multi-stage turbo blower, which has reduced our energy consumption by 17%, making our operations simpler and more reliable.

Additionally, we have revamped our 100 TPH power boiler by Thermax and installed a new 23.3 MW turbo generator (TG) from Siemens. This upgrade has improved the efficiency of our utility plant by 24% and enhanced the overall stability and reliability of utility operations.

We have implemented the modular waste water treatment in some of the fiber processing plants to maximize recycling of treated water in the respective plants so that the load on the central effluent treatment plant is reduced, and the overall performance of the ETP is improved by 20%. It will also reduce the fresh water drawl by 14% on a daily basis.

PM: Are you seeing a shift in customer preference toward higher-strength or lightweight packaging paper and board variants? How are you balancing performance with cost-efficiency in product development?

SK: The customers currently are well-informed and are increasingly focusing on value-for-money, particularly in terms of source reduction and logistics costs.

This has led to the concept of ‘lighter and stronger’ packaging solutions. In other words, the lower grammage packaging boards deliver equal or superior strength through improved paperboard properties or innovative packaging designs.

While the product development and process activities are continued in this direction, the cross functional teams across the 3M’s, that is, Manufacturing , Materials, and Marketing, are working together to deliver superior results at a much faster time frame. We hold robust weekly meetings involving all three functions to ensure clarity of thought and consistency in action, aligning all stakeholders toward a common objective.

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PM: What are the major challenges you currently face as a packaging paper and board manufacturer– be it raw material volatility, energy costs, logistics, or regulatory changes? How are you navigating them?

SK: The biggest challenge for us is the availability of the right quality of the raw material (such as waste paper or wood chips) at the right price. The waste paper is predominantly imported from the Middle East, Europe and the USA and its price fluctuates widely based on the availability and the global demand. Any geo-political tensions throw the logistics out of gear and the energy costs are continuously rising amid a volatile global landscape and supply uncertainties.

The recent regulatory norms related to the Renewable Consumption Obligation (RCO) and the requirement for renewable sources in the fuel mix are further contributing to rising energy costs.

As most of the mills operating in the country are old, any technological intervention in utility section upgrade or rebuild costs a fortune for the companies.

At Khanna Paper Mills, our strongest plus point is the intelligent way of procuring the raw material (waste paper and various grades of pulp) and effectively converting it to the value-added products. The weekly meetings across the cross functional teams helps us in this direction.

As far as the energy costs and regulatory norms are concerned, we are cognizant of the fact that the alternate fuel is the new standard and we are vigorously working on the alternate fuel development, making suitable changes and modifications in the existing utility department infrastructure to make our business more sustainable in the future.

PM: Looking ahead, what’s your strategic roadmap – capacity expansion, backward integration, export push, product diversification? How do you envision your mill’s role in the global packaging paper and board value chain in the next 5 years?

SK: We are looking at both backward integration and capacity expansion as it goes hand-in-hand, requiring huge investment. We are also working to fully leverage our existing assets and capacity for optimal efficiency. Although, we are relatively small in packaging board volume, we remain committed to playing a strong role in niche packaging segments, with a primary focus on product development, to address the unmet needs of our valued customers and end users.