“By 2023, we plan to be around 5.3 lakh tonnes in packaging board and 1.6 lakh tonnes of newsprint. There is roughly a growth of 12-13 percent CAGR in virgin grade and 8 percent CAGR in recycled grade, whose base is quite high. The demand in the coming years will therefore require additional capacities. Also, the good quality board will have big demand as the printing technology is fast improving. The end users filling line requires high quality, high strength, and consistent packaging board,” said Mr. P.S. Patwari, Executive Director, Emami Paper Mills Ltd. in a recent interview with Paper Mart.
Emami is setting up a new Greenfield multilayer plant at Sayakha, Gujarat to cater effectively to the North and West markets whereas the existing plant at Balasore would service the East and South markets. The cumulative board capacity after completion of the project would be around 360,000 TPA.
Paper Mart: Emami Paper Mills recently was allotted land in Sayakha for its Greenfield multilayer board project. How much time will the project take to come into production? Also, add some important details associated with the project.
PS Patwari: This will take around 2 years time and will be a Greenfield project. The machine will have a capacity to produce more than 1 80,000 TPA. The product mix will be identical to the existing plant. Apart from the existing product range, some value-added products will also be made in the new plant.
PM: What is the estimated cost of the project? How does Emami Paper Mills look towards the growth of its paper business in the light of upcoming project?
PSP: The budget estimate of the project is around INR 1000 Cr. Emami Paper has total existing capacity of around 3.4 lakh tonnes – 1.6 lakh tonnes in newsprint and 1.8 lakh tonnes in packaging board. The additional 1.8 lakh tonnes new capacity in packaging board would take the total capacity to around 5.2 lakh tonnes. The present turnover is around INR 1700 Cr, which will ramp up to INR 2600- 2700 Cr after the expansion.
PM: Isn’t there any scope of further capacity enhancement at the Balasore board mill by adding another unit or line because as per some news reports Emami wanted to double the capacity here after exiting the newsprint business?
PSP: In Balasore, we have invested and made most of the machines (swing machines) which can make newsprint as well as writing and printing paper based on market demand and viability. The expansion in Balasore board unit will come in the third phase after the Gujarat project.
PM: Apart from doubling the capacity of Balasore multilayer board unit, Emami also envisioned scaling up board capacity through inorganic route. Any development on that front?
PSP: No, for the time being, we have kept our plan for inorganic growth on hold.
PM: What strategic notions compelled you to consider the Greenfield project at Sayakha on the opposite coast as that of Balasore?
PSP: Looking at the demand of packaging and its growth, and also the importance of serviceability for our customers, we have taken a strategic decision to cater North and West from the Gujarat unit and East and South from the existing unit. However, the product mix will be the same. With both the units running, we are confident to become the best service provider in the country.
PM: If we consider all these expansion plans, viz. at Balasore, at Sayakha, and through inorganic growth, how much tentative capacity Emami is looking forward to amassing? What are the indicators for you to consider such massive undertakings for board capacity expansion?
PSP: By 2023, we plan to be around 5.3 lakh tonnes in packaging board and 1.6 lakh tonnes of newsprint. There is roughly a growth of 12-13 percent CAGR in virgin grade and 8 percent CAGR in recycled grade, whose base is quite high. The demand in the coming years will therefore require additional capacities. Also, the good quality board will have big demand as the printing technology is fast improving. The end users filling line requires high quality, high strength, and consistent packaging board.
PM: If we consider the product range, it’s already fairly broad covering greyback, FBB, SBS, cupstock, etc. What all products do you wish to add to the upcoming expansions and why?
PSP: We will soon be in high-end recycled board and high-end virgin board. We are contemplating some value-added products, which we will let you know in due course of time.
PM: Coming to the upcoming expansions, especially the Greenfield one at Sayakha, brief us about the technology and critical machine parts you are going for and how different they would be from your existing unit?
PSP: Although technology is changing very fast, there will be no drastic difference at Sayakha plant conceptually. However, our focus will be more on the conservation of natural resources such as water and power. As our team in Balasore is quite experienced, there will certainly be some innovative approach. We are in dialogue with few globally reputed vendors for selecting contemporary technologies. It is too early to share all the details. More information would be coming along at appropriate times.