Established in 1993, N R Agarwal Industries Limited pioneered the use of 100% deinked wood free recycled furnish for paper & board production. The Mumbai-headquartered company, with manufacturing facilities in Gujarat’s Vapi and Sarigam, caters to high-quality paper products for both domestic and international markets. Today, the company enjoys a market presence in more than 20 countries across the globe in addition to India. Over the last three decades, it has grown into a packaging board unit with an annual capacity of 1,80,000 metric tons and a capacity of 1,20,000 metric tons per annum for writing & printing papers. By end of March 2024, it made heads turn when it announced the installation of India’s single largest packaging board machine, with an investment of INR 850 Crores. With the implementation of this project, the company aims to reach a capacity of 5,28,000 TPA, Mr. R. N. Agarwal, Chairman & Managing Director of N R Agarwal, informs Paper Mart in an exclusive interaction.
Paper Mart: You have installed India’s largest packaging board machine. Please tell us more about this installation and the motivation behind it.
R. N. Agarwal: N R Agarwal is a leading manufacturer of duplex boards in India, catering to premium greyback and whiteback. For the last 40 years, we have been in this line equipped with the expertise required in the manufacturing, procurement and marketing of quality duplex boards. Generally, in India greyback duplex boards are not manufactured by the big integrated paper mills.
Our strong expertise in this product line, coupled with consistent robust demand from the packaging sector, which will persist not only in India, but globally as well, motivated us to undertake a substantial investment in this line so that we can fulfill the growing market demand as well as the demand that is expected to increase.-
The result is the single largest packaging board machine in India, with the capability to churn out 900 tons of greyback and whiteback per day and is flexible to produce folding box board (FBB) and solid bleached sulphate boards (SBS), which would cater to value-added applications.
Our objective is to produce 25 percent of our products in the value-added category so that we can compete with our peers having captive pulp capacities. Our main focus is on best quality greyback and whiteback. We would be able to outperform many significant players in the industry as we have an edge in terms of economies of scale, latest technology, quality and cost advantage as well.
Coming to the board manufacturing set up, we already had additional land at Sarigam, where one machine was already producing 300 tons per day of writing and printing paper. There we decided to set up the manufacturing unit by expanding the existing plant. Gujarat has been our preferred destination owing to its proximity to three ports – Nhava Sheva, Tumb (ICD) and Hazira. This is crucial and gives us an added advantage, as we are targeting to export around 30-40 percent of our products. This proximity to ports also helps in import of waste paper which constitutes 50% of our raw material requirements.
With the implementation of this project, we would cross the production of 500,000 tons per annum. This would make us one of the biggest players in terms of recycled fiber-based paper mills, and place us in the league of top 5 paper manufacturers in India.
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With the implementation of this project, we would cross the production of 500,000 tons per annum and place us in the league of top 5 paper manufacturers in India.
PM: Help us understand the project’s capabilities and the overall technology.
RNA: It’s one of the best machines currently available in the market with entirely brand new equipment. It is a configuration of mainly five or six good machine manufacturers, with the main machine from Goldstar Paper Tech Limited (GSPT), a South Korea-based paper machine manufacturer. Its critical parts, basically the shoe press and two calendars, are from Bellmer, a reputed manufacturer from Germany. There are four coaters, three on top and one on bottom, sourced from Shashi Light Ind Machinery Company Limited, a well-known manufacturer from China. We have rewinder from The Globe Radio Company. All our cutters are from Milltex, which is an Italian cutter manufacturer. The deckle of the machine is 3.7 meters and its speed is 700 mpm. We plan to produce 25,000 tons of packaging board per month, which would reach 3,00,000 tons of paper board per annum, subject to balancing of fiber line and other facilities and subject to environmental clearance for the enhancement of production capacity.
Our entire pulp mill or stock preparation, including approach flow, is from Andritz, which is one of the world’s top suppliers of pulp mill equipment. Our boiler is from Thermax and the turbine is from Siemens. We have also installed a waste-to-energy plastic boiler, which is also from Thermax. Our plant is almost a zero waste disposal plant. Whatever sludge and solid waste generated is burnt in the boiler to generate power.
Furthermore, this boiler, which is fully compliant with all norms of the Gujarat Pollution Control Board and the Central Pollution Control Board, will enhance efficiency. The National Environmental Engineering Research Institute (NEERI) has given us certification that the plastic waste boiler, which we are setting up, will not create any carcinogenic gasses. We will also get carbon credit for consumption of this plastic waste.
PM: How do you intend to ensure a sustainable ecosystem with your raw material requirements?
RNA: Since we would now be producing around 40,000-45,000 tons per month in total, this would make us one of the largest consumers of waste paper in India. Raw Material sourcing would be a big challenge, but we have done our meticulous homework. We are already sourcing around 25,000 tons of waste paper every month, and have made arrangements for sourcing an additional 20,000 tons. Additionally, we have tied up with some of the major importers, who have given us a firm commitment that waste paper, including imported, would be made available for us.
PM: What kind of product mix are you planning, and what is your target market?
RNA: For waste paper-based products, greyback and whiteback duplex board, we are targeting around 70- 75 percent product mix. Intvalue-added category, we are aiming for around 25-30 percent. With regard to geographic distribution, we plan to export around 30-40 percent of our products. In domestic, we would mainly be targeting Western India, with 50 percent of our sales coming from there as we have a good hold in the region and also many packaging industries have expanded their operations here. The rest, 15-20 percent, will go to the northern and southern parts of the country. Eventually, further market diversification, not to mention more product, will happen, making our presence pan India.
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PM: Please elaborate the kind of efficiency you aim to achieve with this project.
RNA: We believe that the costs of energy and water form a very big portion of the paper manufacturing process. Regarding the energy cost, we have our own 12.0 MW coal-based power plant. Our waste-to-energy boiler would consume 220 tons of plastic waste every day on a 50 percent moisture basis. On a bone dry basis, 110 tons of plastic waste generated from our entire group production would burn in our boiler, giving us 7.5 MW of almost free power, which would translate into around 30 to 35 percent of our total power requirement free power. That would get us substantial saving in per unit power generation cost. We are targeting one of the lowest power consumption per ton of board in terms of units. A single machine, capable of producing 900 TPD would consume much less per ton power compared to a machine producing 500-600 TPD.
This waste-to-energy, the economies of scale and the state of art technology machine are our three USPs, and based on which we can claim to be one level ahead of most of our competitors. Lastly, we will also increase our reliance on renewable energy. In fact our operations are always aligned with our approach of reducing carbon footprint.
PM: How would you describe the domestic and international packaging industry?
RNA: Currently, the entire paper sector is facing a downward trend domestically as well as internationally because of the geo-political crises and several other factors. Comparatively, there has been less paper consumption not only in Europe and the US, but to a greater extent in China too, where local consumption has decreased, leading the Chinese companies to reduce their rates, and as a result exporting their products. Due to this slump in the international market, some imports are coming to India. However, there is no import of duplex boards, especially greyback and whiteback, because they are made on a specific size. Despite this, the reality is we have to keep the rates in tandem with the international market.
The market is at present at a low and 2024-25 may be a challenging year for the paper industry. But subsequently, the packaging market has to grow as no large-scale production is planned. No project has either come up in the last 1 or 1.5 years, nor is likely to come up in the next 3 years. We feel that 2025-26 and the subsequent year will spell success for the paper industry, especially the packaging sector. We predict a bright future and robust market growth for the industry, especially after April 2025.
Fortunately, we have the sustenance power, our fundamentals are strong, and our debt is very reasonable. So, we have the ability to sustain this one year of rough market. Even when the market is down, it is not so bad that we would not be able to sell our entire production because we have cost efficiency and marketing setup.
Our waste-to-energy boiler would consume 220 tons of plastic waste every day on a 50 percent moisture basis. On a bone dry basis, 110 tons of plastic waste generated from our entire group production would burn in our boiler, giving us 7.5 Mega Watt of almost free power.
PM: Please walk us through your ESG framework and CSR initiatives.
RNA: We are very conscious of ESG and CSR. We would like to highlight a particular point here. You must be aware of the ESG norms that the government is considering to implement on the leading companies in the country. Though we do not fall in that bracket as of now, we have voluntarily adopted a lot of measures which are in line with the ESG guidelines of the government. This waste-to-energy boiler is one of our major initiatives on this front. The very fact that we’re using raw material as waste paper is itself the biggest contributor to ESG initiatives. Under CSR, we’ve adopted the Rotary Hospital in the remote village of Sarigam, where medical health care facilities are very rare. We have adopted the entire hospital, which has been our major contribution towards the social welfare program near our factory. We are hopeful that in the days ahead more initiatives will be undertaken.
