The Indian tissue market seems ready to grow. And Century’s decision to make large quantities of prime grade tissue marks a big entrance into top quality tissue in India, pushing this industry along even faster.
Century Pulp and Paper, under the dynamic chairmanship of Mr. B. K. Birla, has entered the tissue business in a big way, through the installation of what is India’s largest and most modern tissue machine. Century Paper has been making pulp and paper at its mill site at the foothills of the Himalayas, in Lalkuan, 270 km, northwest of Delhi, since 1984.
Over the years it has successively added paper machines and fiber lines and today has a capacity of about 700 tons per day or close to 200,000 tons per year.
This year the company has successfully completed INR 1.75 billion (USD 45 million) investment projects, which includes a new 100 TPD DCT tissue machine PM5 and stock preparation lines from Metso, as well as rewinders from A Celli. PM5 marks Century’s ambitious foray into the Indian tissue business; it will be capable of making over 30,000 tons per year of high quality soft tissue based on 100% virgin fiber.
Century is currently focusing on establishing its tissue market by selling jumbo reels, before entering into the tissue products segment under the brand name of Century. It will be sold through distribution and retail networks to end-consumers and institutional clients, such as hotels, airlines, F&B industry etc. This will include setting up a conversion plant in North India, for which the company has already got machinery from Taiwan. This will be followed by plants all over India.
Marketing and Branding
A strong marketing and branding plan is already in place. Century intend to develop the market in a very positive manner through creative marketing and promotion. With this new tissue machine, Century will be able to feed its brand for finished products, while also displacing some of the jumbo roll imports in to the country.
Diversified Raw Material and Product Range
The mills fiber lines produce what must be a unique combination of pulp qualities in the world. There is a bagasse line making 84,600 tpy, a recycled fiber line producing 75,960 tpy, a hardwood Kraft line, using mainly eucalyptus, making 37250 tpy and a rayon grade dissolving pulp line which has an output of 31320 tpy. Paper grades presently made at the mill include printing and writing papers, industrial papers, security papers and other specialties, as well as copy paper. As India is a growing market for tissue, Century has diversified to this segment and now to packaging board.
Recently Paper Mart visited the Century plant in Lalkuan, Nainital. After an interaction with Mr. R.L. Lakhotia, President, Mr. D. P. Chandrana, Senior V. P. (Technical), and Mr. Nandkumar DM, Sr. GM (Tech.) we visited the new tissue machine. The excerpts of this interaction are given below
Paper Mart: What motivated you to enter in the tissue industry and that too, with such a huge capacity?
Mr. R.L. Lakhotia: In India there is huge potential of tissue consumption as the culture of tissue usage will slowly come about. It will happen, particularly when international events like\ Commonwealth Games will be held. Secondly, quality soft tissue is not made in India, and everything is imported. The initiative was to provide high quality tissue made indigenously. We maintain bulk between 6 and 8 (in India bulk is usually between 3-4 ).
PM- What are the market trends prevalent in the Indian and international tissue markets, and also, what sort of changes do you foresee happening in these markets?
RLL: International tissue market is definitely growing. Current recession has also affected in same way it has affected other paper industries, other paper products. There is a downfall of 6-7% in tissue consumption. But the soft tissue demand is growing, due to increased awareness about hygiene. In India, quality soft tissue paper is not available. Poster and other low quality grades are used as tissue substitutes.
We foresee a growth of 40-50% in the soft tissue market. With improvement in the standard of living of the middle and upper- middle class, the consumption of tissue is bound to increase.
PM: How has recession affected the demand for tissue? And also, do you think the recession is going to affect Century’s projection of exporting a substantial share of its tissue production?
RLL: Effect of recession on tissue is seen on a minimal point. Tissue is one of the personal hygiene products, and it is the last one to be scrapped. A person can save on photocopy paper, but personal hygiene is a must. Therefore have not seen much impact of recession on tissue paper, the market is still there. Tissue lines are coming up all across the globe, so the growth is there. There is however, pressure on the pricing of various tissue grades.
PM: So Century is ready to compete at the global level.
RLL: We have to compete. What is the purpose of our buying the Valmet (Metso) machine – we will produce the best. Survival of the fittest in the market, i.e. making the best quality at most economical prices. Our interest and logistics costs may be high, but we have to save on cost of other inputs. Our competitiveness stems from our focus on quality. Hygienically, our product is made at 480 degree C, which will ensure better global acceptance.
PM: What are Century’s future expansion plans?
RLL: We are already moving ahead with a giant expansion set for startup in late 2009/early 2010. This includes a big new 500 tpd Board machine to make high quality coated board as well as a large ECF hardwood pulp line. The pulp line will produce 450 tpd in a batch process, while the paper machine will be making very high quality coated board for packaging applications such as foods, liquids, medical items and various consumer products.
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