Standing at 55,000 tpa of tissue production capacity, Orient Paper Mills is one of the largest tissue producers in India, exporting to countries like UAE, Philippines, Srilanka, Australia, etc.
Orient Paper Mills, one of the oldest paper producers, is a mainstay of aggregate product basket of the Indian paper market. The mill has been evolving steadily with the market growth and been adding new products and quality to its product range. As a premier notebook maker, the mill has lately upscaled its tissue production to a mammoth 55,000 tpa, being supplied to domestic and major export markets. The mills’ combined capacity today stands at over 100,000 tpa.
Paper Market recently talked to Mr. Ajay Gupta, CEO, Orient Paper Mills wherein informed us of numerous recent developments at the mill in areas of production, environmental initiatives, raw material sourcing, etc. After taking over as the chief executive, Mr. Gupta has been known for his works helping the mill improve internal efficiencies through cost reduction initiatives.
Incorporated in 1939, you are one among the oldest paper mills in India and a companion of India’s growth story so far. Kindly share with us major highlights of the company’s evolution.
Ajay Gupta: Orient Paper Mills, Amlai started its journey way back in 1965 at small town known as Amlai in the district Shahdol of Madhya Pradesh. At that time, the mill installed one of the biggest width Beloit machine with 5.5 m deckle for writing & printing in India with production capacity of 56,000 tpa. Later in year 1971, one pilot machine of capacity 4000 tpa for making cover papers and paperboards was installed for the purpose of R&D development activities.
Thereafter, company decided to enter into tissue business and installed its first tissue machine of capacity 10,000 tpa in year 1997 followed by the second tissue machine of capacity 15,000 tpa in year 2009, thus totalling W&P paper capacity to 60,000 tpa and tissue capacity to 25,00 tpa. Recently, the third tissue machine of capacity 30,000 tpa has been installed to take the total production capacity of tissue as 55,000 tpa while mills total production capacity to 1,00,000 tpa .
After you took over as the CEO of Orient Paper Mills some time back, what agenda were there in your mind as part of the company’s growth strategy? Could you execute them as you wished?
AG: As a part of senior management leadership team, vision was quite clear to convert mills into positive profitability. With professional background of pulp and paper and long experience in this field working in India and abroad, main agenda in the mind was to first improve the internal efficiencies of the plant through implementation of cost reduction initiatives along with low cost investments and focusing on continual improvement plans and plugging all leakages and wastages in the plant.
I would like to mention here that full support was extended from the desk of our MD, Sh. M. L. Pachisia who has shown full trust and confidence in my capabilities and accordingly all plans were very well executed.
Orient Paper Mills today produces a wide range of paper including writing & printing, industrial and speciality papers. Are any major investments lined up in any of these categories, either in capacity expansion or process improvement?
Our vision is to be the largest producer of tissue papers in India and the same has been achieved now with the installation of the third tissue machine of capacity 30,000 tpa and investments has been made accordingly for enhancing the tissue production capacity. With this, our total installed capacity for tissue becomes 55,000 tpa while overall production capacity of the mills increased to 1,00,000 tpa. Demand for W&P papers for the last 3 years is quite stable and stagnant. No further investments are lined up at the moment.
Being there awhile in the papermaking arena, what changes in terms of product quality and technology obsolescence/upgradation have you seen and how have you matched those parameters with time?
Orient papers is the only mill in India which can produce good quality note book paper in 54 and 57 gsm respectively and as such enjoyed the leadership position in the note book segments with a USP of manufacturing high bulk note book papers in the range of 1.45 cc per gram. Till year 2014, we had been struggling on account of low brightness of our products vis-à-vis our competitors. In order to stay competitive and survival of the business, starting from year 2014, we took the initiative to upgrade all our products to high bright by increasing our pulp brightness. This was followed by installation of on-site precipitated calcium carbonate (PCC) plant and switch over to the use of same as filler in the paper.
Of late, at start of the year 2016, we have upgraded quality of our products further by switching over to use of ASA sizing and achieving wax pick our products in the range of 13-14 A. At the moment, our W&P papers are well established in both note book and printing segment and are quite well in demand. The major breakthrough was achieved at the end of year 2015 when we developed watermark papers for government tenders and executed the orders for both Chattisgarh and UP governments. Quality for the same was so much appreciated that we got repeat orders in year 2016.
The quality parameters in W&P segment were very well benchmarked with competition. At the same time, the quality of tissue papers were also upgraded both in terms of strength and softness and benchmarked with the competition. We have been exporting around 14000 tpa of tissue papers to countries like UAE, Philippines, Srilanka, Australia, Saudi Arabia, Tanzania, Bahrain etc.
Raw material has been a serious and continuous issue of deliberation for the paper industry, especially in the new millennium. How has Orient been able to overcome few acute phases of raw material crises and what is its position now?
Yes, we being a wood-based integrated pulp and paper unit, availability of fibrous raw material is a serious concern for us like it is for other paper mills in the industry. Raw material scarcity is a big concern for the Indian pulp and paper industry. Availability of wood domestically at 9 million tpa is inadequate as compared to the current requirement of 11 million tpa, which going forward is projected to rise to 15 million tpa by year 2024-25. It is worth to mention here that out of total demand of wood, 90 percent is sourced from industry driven agro/farm forestry while 10 percent is from the government sources and imports. India’s paper industry is indeed wood-positive.
To safeguard ourselves in this area, we at Orient Paper Mills started focussing on plantation development way back in year 1987 to have a sustainable source of raw material. At the moment, we have full-fledged nursery for clonal development with a capacity of around 75 lakh saplings per annum and every year we are covering plantation in around 2000-2200 hectares. With our continuous, strenuous efforts in this area, we have been able to cover plantation in around 200-250 km area in 52,000 hectares and able to meet 30 percent of our annual raw material requirement from local areas of two states of Chattisgarh and Madhya Pradesh while for balance 70 percent mill is dependent on the states like UP for wood and Assam for bamboo.
We are also looking forward to the government support in making some part of the degraded land in Madhya Pradesh state available for pulpwood plantation under collaborative arrangement so as to access raw material on sustainable basis and at a competitive prices. Indirect benefits of such schemes shall include substantial employment generation in rural areas, savings in the outgo of foreign exchange, potential for carbon credits and significant increase in forest green cover.
Environment conservation approaches and mitigating harmful industrial footprint on air, water, soil, etc. have become mainstays of sustainable industrial strategy, more so in the resource-intensive industry like paper. What’s Orient’s take on the subject? Please enumerate the initiatives taken to address the issue?
Environment norms are becoming more stringent every year more so now with revised Water Charter compliance laid down by CPCB and SPPCB. Like other paper mills, we are also facing the challenges in this area of environment protection. At Orient Papers, to be environment friendly and meeting the laid down environment norms by CPCB and SPPCB, we have recently upgraded our effluent treatment system up to a level of tertiary treatment with the installation of diffused equalisation tank , diffused air aeration tank and tertiary clarifier etc., so as to achieve the laid down treated effluent discharge norms. Initiative has been taken to utilise all the treated effluent for land irrigation.
The mill has already installed on-line effluent discharge monitoring system and complying with the conditions of CPCB and SPPCB through on-line data transfer to their servers. Similarly for air emissions compliance, mills have installed on-line stack monitoring system at all the stacks of power boiler and recovery boiler. We have taken all required measures and initiatives in this area to address this issue.
The Indian paper industry began with producing just few lakh tonnes of paper to reach today around 15 million tonnes of capacity. What according to you worked in favour of the industry and what challenges were overcome during this period? Also tell what more needs to be done as we have still far to go in terms of paper consumption.
In fact, key drivers for growth in W&P paperhas been the greater emphasis on education and literacy by the government coupled with growth in organised retail and demand for better quality paper. Demand for better quality packaging of FMCG products marketing through organised retail, rising healthcare spends and increasing preference for ready-to-eat foods are the key demand drivers for paperboard/packaging paper.
In order to meet our projected consumption 23.5 million tpa by year 2024-25 and per capita consumption as 17 kgs, we shall need to add 1 million tpa of integrated pulp, paper and paperboard capacity every year .These investments would support improving our economy, generate direct employment , reduce foreign exchange outflow by avoiding imports of paper; but, all this depends on how the Govt. supports the pulp and paper industry as raw material scarcity, stringent environment norms and the Govt.’s policy of extending preferential tariff treatment to import of paper and paperboard under the Free Trade agreements ( FTAs ) are the biggest threats to the growth of this industry .
What do you expect from the tissue market in India in both the short-term and long-term?
We at the moment have installed capacity of 55,000 tpa for manufacturing of soft tissue with three machines at mills. Tissue paper is a growing market in India and we expect the same to grow at 15 percent in the coming time. At present, the tissue capacity in India is around 1,00,000 tpa. The major producers of soft tissue at the moment in India are Orient Papers, Century papers, Pudumjee, DSG, Indus papers, Arjun Chemicals, Khatima etc. Going forward in long-term, as the people are becoming more aware of the usage of tissue, this shall definitely gain momentum and expected to grow rapidly.
Give us your brief, personal projection of the Indian paper industry 3-5 years from now. What are the areas where you expect major movements?
At present per capita consumption of paper in India is 13 kgs in comparison to global average of 57 kgs. Per capita consumption is projected to increase to at least 17 kgs by 2024-25. At the moment, India’s share in world production of paper is over 3 percent with production capacity of over 14 million tonnes per annum. It is expected that production capacity should touch a figure of 22 million tonnes per annum by 2024-25 which means addition of 1 million tpa of integrated pulp, paper and paperboard capacity every year.
W&P market is already poised with the current capacity as 5 million tpa. Major growth may happen in packaging paper and paperboard which is expected to grow at 12-15 percent while tissue market may grow at 15 percent. Paper industry shall be looking forward for the Govt. support to promote agro/farm forestry through utilisation of available degraded land and increase green cover and make access to raw material at competitive rates.
You may add something at last.
At the end, I would like to wish all my colleagues and seniors in the field of pulp and paper industry and IPMA team member for good health, happiness and success in their endeavours towards putting their sincere efforts in the growth of pulp and paper industry.