In an exclusive interaction with Paper Mart, Mr. R.N. Agarwal, Chairman & Managing Director of NR Agarwal Industries Limited, shared that its recently commissioned largest single-location paperboard machine has achieved a finished production of 1,005 TPD-on a day surpassing its designed capacity of 900 TPD.
Paper Mart: The company has recently set up the largest single-location paperboard machine. Please tell us the idea behind it and how it will accelerate the growth of the company?
R.N. Agarwal: Initiated in 2024, our multilayer board plant has now achieved full capacity utilization. Originally, we conceptualized the project as a 500 TPD duplex board manufacturing facility, with plans to produce value-added grades such as folding box boards. During the project’s planning phase, we reassessed the market landscape and noted that two to three projects in India were already operating at similar capacities. To gain a competitive edge, both in terms of economies of scale and product quality, we decided to scale up the project. Accordingly, the capacity was upgraded from 500 TPD to 900 TPD with only a nominal increase in investment. This allowed us to strengthen our focus on packaging products.
At the time, there was skepticism within the industry about our ability to achieve the ambitious target of 900 TPD. However, more than a year after commissioning, the results have exceeded expectations. We have achieved machine production up to 1,075 TPD. As a result, the project has not only achieved but surpassed its designed capacity, reaching 100% capacity utilization. We are already witnessing significant benefits from economies of scale, while simultaneously delivering the high-quality standards which we targeted.
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PM: Can you please shed light on the capabilities of the new project.
RA: We are embarking on a new Multilayer Board Project. We acquired the paper machine from China. It is a European-OEM machine, being run by a Japanese company in China. It is a second-hand machine, around 10 years old, making it relatively new and technologically robust by industry standards. In its earlier operation in China, the machine produced approximately 1,000 TPD. Based on its past performance, we were confident of 1,000 TPD production in India. We are also evaluating the possibility of scaling the machine capacity up to 1,500 TPD through selective modifications. This assessment is currently underway, and we expect clarity about this decision within the next two months.
If this scale-up is successfully achieved, the project would become India’s first greenfield packaging board plant to commence operations with an annual capacity of approximately 0.5 million tonnes. This would mark a significant milestone for our company, and for the Indian packaging paper industry.
PM: How do you stand apart from your competitors in the duplex board category ?
RA: Today, we are at par with, or better than most of our competitors in the industry. We are not only manufacturing greyback and whiteback boards, but have successfully developed and produced value-added grades, including folding box boards. In this segment, our product quality stands on par with leading Indian players such as ITC, JK Paper, Emami Paper Mills, Century Pulp and Paper, and Tamil Nadu Newsprint and Papers Limited. We believe that we have successfully achieved all the objectives and are building on this strong foundation.
PM: When do you plan to commission this new greenfield project?
RA: We are targeting that this new project will be commissioned around December 2028. This will be a greenfield project, with the land more or less finalized in Gujarat. The project will be entirely based on recycled fiber, utilizing waste paper as the primary raw material. We also plan to evaluate the possibility of backward integration in a later phase, which could include the addition of a mechanical pulp mill as part of the second stage of development.
PM: How do you overcome raw material volatility and price surge for your current project which is also a current challenge in the paper industry?
RA: Our current project is entirely based on recycled fiber. For the production of value-added grades such as folding box boards, we do require imported pulp. While sourcing itself is not a concern, the pulp prices fluctuation is a concern for the entire industry.
Compared to our competitors with integrated pulp facilities, price volatility can create temporary cost disadvantages when prices of the raw material rise. However, this is a market reality that we are well prepared to manage. We have to adapt to the market conditions and face the competition. To mitigate price fluctuations, we typically procure pulp six months in advance, which shields us against short-term volatility or price fluctuation within a reasonable time frame, and maintain cost stability.
As far as our core products are concerned, such as greyback and whiteback boards, production is fully based on recycled fiber. Approximately 50% of the fiber is imported, while the remaining 50% is sourced domestically. Indian waste paper sourcing is highly regional and localized, and we are reasonably assured of its consistent availability. In fact, with improving collection systems, we expect domestic recovery rates to grow further, and therefore do not foresee any long-term supply constraints.
From an import standpoint, our procurement is well aligned with our production levels. At peak capacity, we produce approximately 45,000TPM, comprising around 10,000 tonnes of writing and printing paper and 35,000 tonnes of board grades. Of the board production, roughly 7,000 TPM is value-added board. To support this, we procure around 40,000 tonnes of waste paper monthly, along with a portion of imported pulp.
Overall, we do not anticipate much challenges in fiber sourcing, either in terms of availability or scale. While price and currency fluctuations exist, particularly US dollar fluctuations, our four decades of experience in the paper industry give us the confidence and capability to manage these fluctuations effectively.
PM: What are the key markets that you serve in the packaging board segment?
RA: We cater to leading players in the packaging industry and prominent printers across India. Our products serve major multinational and large consumer brands operating in sectors such as pharmaceuticals, cigarettes, liquor, and other segments. Our products cater to some of the most well-recognized brands in the country, including Colgate, Hindustan Unilever, and Nestlé. This reflects our market presence across multiple segments and regions within India.
In addition to our strong domestic presence, we also have an established export footprint. Approximately 25% of our total production is exported to markets in the Middle East and Europe, with smaller volumes supplied to countries such as Bangladesh, Sri Lanka, and African markets. We have a balanced domestic and international presence across diverse market segments.
PM: How do you see the demand for packaging grade in India?
RA: With the success of our current project, we are highly confident that demand for packaging grades will continue to rise in the future. As one of the leading players in this segment, particularly in the western India market, we see strong potential for sustained market expansion over the next three years. The demand will definitely increase and to meet this rising demand, we want to plan ahead of time, conceptualizing our next project.
PM: What is your vision for the future?
RA: My first and foremost vision is to take the company to a production level of 1 million TPA. With the commissioning of our new project, we are currently at around 0.5 million tonnes, and I am confident that within the next three years we will be able to achieve the 1 million-tonne milestone.
As of today, there is no single paper mill in India producing 1 million tonnes annually. ITC is very close to this benchmark, and with its acquisition of Century Pulp & Paper Mills, it is expected to cross that threshold. Our objective is to be among the top three companies in India to achieve 1 million tonnes of annual production. That is our first major goal.
Beyond scale, our focus is to be positioned in the top segment of packaging paper manufacturing by producing a full range of packaging grades, with a strong emphasis on value-added products. By consistently adding value to our product and bringing diversification to the segment, we aim to strengthen margins, improve EBITDA, and ultimately deliver maximum returns to our shareholders.
PM: What is your outlook on establishing cutting centers and finishing infrastructure?
RA: Our current setup supports this vision well. We are strategically located in the central part of the western region, efficiently serving Gujarat and Maharashtra. While we do not operate multiple cutting centers, we have a large, integrated finishing house of approximately 200,000 square feet. Equipped with 10 cutters and significant inventory-holding capacity, we stock most standard sizes in advance. This allows Gujarat and Maharashtra to function almost like cutting centers, enabling deliveries within 48 hours in many cases.
For other parts of India, we do not currently see the need for additional cutting centers. While such facilities add to cost, customer satisfaction and delivery timelines remain critical. At present, we are successfully meeting customer requirements without additional cutting centers.
We have a well planned strong finishing infrastructure too. Our proximity to ports gives us a significant logistical advantage—both for exports and for the import of raw materials—further strengthening our competitiveness in domestic and international markets.
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PM: How do you foresee the future of the paper industry?
RA: I strongly believe that the time has come for the Indian paper industry to think big. Earlier, producing 1,000 TPD paper was considered extremely challenging—not just from a manufacturing standpoint, but also in terms of finishing, logistics, and servicing due to a small customer base that often requires low quantities of paper and paper products with urgent delivery timelines. However, having successfully achieved and managed this scale, we are now confident that the industry must therefore embrace larger capacities and bold ambitions.
Efficiency will play a critical role going forward. With increasing competition, operational efficiency has become a necessity without which the margins will simply not sustain. So, thinking big, operating efficiently, and remaining dynamic to take strong and timely decisions is the need of the hour.
PM: What are your expectations from the Government for the bright future of the Indian paper industry?
RA: Dumping of imported paper to be stopped and GST on note books to be made from 0 to 5% to stop imports as input reversal itself is 10%.
