Waiting for Economic Turnaround - Papermart
Papermart
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Waiting for Economic Turnaround

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Mr. Saurabh Bangur, Vice Chairman,
The West Coast Paper Mills Ltd.

Q. How has the previous year been for your company?

A. The previous year was a challenging one for the industry as whole. It was a challenging year for us as well. I guess cost and availability of raw material were a major challenge for the entire industry. There was a supply shortage. So for the first time the industry explored the area of imports of wood/chips. WCPM was fortunate enough to smoothly handle the full vessel consignment of chips at Goa Port; and now we are importing two shiploads every quarter.

Cost of raw materials has increased exorbitantly. Though we managed to pass on around 75 per cent of the cost increase, we had to absorb 25 per cent of it… . A further increase in sales price would have made imports cheaper as compared to domestic prices.

We also had a major plant shut in April 2013, when the entire plant was shut for a period of 25 days for a full maintenance check-up. It was for the first time that we had such a major shutdown.

In brief, the previous year was a difficult year – a year in which we had to face issues related to raw material constraints, followed by marketing challenges on imports coupled with our internal plant shutdown.

Q. What benefits did the previous year bring to your company?

A. I think challenges force us to think differently. We were also forced to think out of the box.

Because of domestic raw material shortage, we explored chips imports for the first time. We got a temporary conveyer belt system and other handling equipment installed at Goa port for easy unloading of chips followed by storage and loading again in the rakes. It was a different challenge for us, but our team faced it successfully.

After importing chips, our next challenge was finding a way to maximise on yield efficiency. We have managed to get some results, but more work needs to be done. In a process industry like ours, there is always scope for improvement. So, with better quality chips, we focused on how to improve yield and reduce consumption of raw material and chemicals.

Our cup stock and B2B branded copier 70 gsm product were introduced last year. They were well accepted on the market, and within a short time WCPM could manage to establish good market share in both the above products. Our technical and marketing team has carried out continuous improvement to establish the product as per market needs.

Q. The industry remained hanging between hope and despair during the previous year. Will it remain underpowered in the coming two to three years as well?

A. Yes, I’m afraid. Well, as far as the Indian market is concerned, there has been no negative growth; in fact, growth will always be there because of many positive growth reasons.

The biggest challenge comes from raw material supply limitation domestically and import threat of finished paper products from countries that attract 0 per cent duty after 1st January 2014 as per ASEAN FTA. Little imports have already started coming from these countries after 1st January 2014. The quantity is minimal, but sentiment has been weakened.

The industry is in a wait and watch situation – what impact imports will have on domestic finished paper and, most importantly, how the Indian mills will react to it? Downward prices will naturally have an impact on the bottom line.

I guess, a clearer picture of the above-mentioned factors will emerge soon.

Q. What measures must be taken by the industry in the current year to empower the engines of growth and take people to renewed prosperity?

A. The entire industry must take plantation activity very seriously in their nearby catchment area by way of farm forestry, which will help them in getting an assured supply of raw material at a reasonable rate, thus making them self-sufficient on a long-term basis in terms of both cost and quality.

Also, the industry must take the social media route or launch an advertisement campaign to make citizens realise that paper is environmental friendly and not a destroyer of trees.

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Mr. Ved Krishna, Managing Director,
Yash Papers Ltd.

Q. How has the previous year been for your company?

A. It has been an interesting year with much volatility both on the input and output sides. The input costs have risen and so have the market prices. We have raised our capacity utilisation levels with investments and innovations; we have also raised our quality and productivity levels.

Q. What benefits did the previous year bring to your company?

A. There is always room for innovation and quality improvements. We need to work closely with customers and live up to our commitments. Also, raw material strategies need to be long term and must have a strong focus. In addition, we need to continue investing in people and their growth

Q. The industry remained hanging between hope and despair during the previous year. Will it remain underpowered in the coming two to three years as well?

A. It is difficult to talk about the industry as a whole, as the segments and structures are so diverse. We feel that focus is the key. One needs to find a clear segment and value proposition and work relentlessly to be excellent at delivery of the same. We need to look at ourselves from the perspective of the customer and needs of the market. We need to move from being paper makers to being solution providers, and I am sure individual companies will grow.

Q. What measures must be taken by the industry in the current year to empower the engines of growth and take people to renewed prosperity?

A. We need to find a clear market focus; invest in product development, in raw material resources, in development of team and management structures for empowerment and in the society around us; and ensure environmental compliances.

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Mr. N.K. Jain, Director, (Pulp, Paper and Power),
Valmet Technologies Co. Pvt. Ltd.

Q. How has the previous year been for your company?

A. The previous year was an exciting one, to say the least. In terms of business, it was quite challenging but we still continued to hold on to the number 1 or 2 position on the markets served. Valmet was reborn through the demerger of Metso’s pulp, paper and power businesses. Now Valmet is ready to move forward to 2014 and efficiently serve pulp, paper and power customers on all continents.

Q. What benefits did the previous year bring to your company?

A. In the previous year, the board, tissue, pulp and energy markets were all set to grow over the long term and there were good opportunities for the growth of our business.

With the birth of new Valmet, we take forward the strong global presence that we have created over the years. We have a good platform for future growth. We see our customers opting for world-class competitive technology and services, and we share the same by offering the best. With our new Valmet, we further extend our commitment to convert renewable resources of our customers into sustainable results.

Q. The industry remained hanging between hope and despair during the previous year. Will it remain underpowered in the coming two to three years as well?

A. By and large, the Indian economy underperformed in 2013. Pulp and paper industry was no exception. However, we are hopeful that after the general elections in mid 2014, the new stable government should be able to give the much-needed impetus to future growth – something that the economy and the industry as a whole currently require. As a result of the changes that have taken place on the paper and energy markets globally, the demand for papermaking and bioenergy technology has declined. But a good opportunity is seen in the Asia Pacific region, including India. I think the industry has a bright future, as the fundamentals remain strong.

Q. What measures must be taken by the industry in the current year to empower the engines of growth and take people to renewed prosperity?

A. In order to scale back to the growth mode, the economy needs to come together as one. Each member must strive for actionable results using the resources on hand to empower the industry. We would like to be “Closer to the Customer” and improve the profitability and efficiency of their operations. At the same time, we would like to continually enhance our technological know-how to take the industry forward.

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Mr. Anil Birla, Managing Director, Seascope Impex Pvt. Ltd.

Q. How has the previous year been for your company?

A. The previous year was an average year for us; however, we did marginally better than what we did in 2012.

Q. What benefits did the previous year bring to your company?

A. There have scarcely been any isolated benefits; it was more of a balance of factors, both positive and negative. Take, for example, the rupee depreciation. On the one hand, input costs for both, imported and domestic material rose considerably for an industry already struggling to keep pricing competitive. On the positive side though, manufacturers with international benchmarks have benefited in their exports; and domestic waste paper collection rates have improved following better pricing.

Q. The industry remained hanging between hope and despair during the previous year. Will it remain underpowered in the coming two to three years as well?

A. Global cues do not inspire much confidence, and the global paper industry is likely to remain saddled with overcapacity. In the Indian context, there is a sense of uncertainty owing to political instability. It will be interesting to see how the government works after the general elections to get the economy back on track, spurring demand and inevitably growth.

Q. What measures must be taken by the industry in the current year to empower the engines of growth and take people to renewed prosperity?

A. I’m not sure what an industry that is plagued with overcapacity, poor demand, high interest rates and high input costs can really do. We can only hope for a positive political direction that has the stability and consistency that can remove some of the hurdles the industry is facing and put it on the fast track of growth. Initiatives can be taken by mills, especially those near ports, to improve quality and to upgrade their products to meet the international standards for exports. They will be better equipped to battle domestic slowdowns and poor demand; they will gradually help in balancing demand and supply.

Q. How has the previous year been for your company?

A. The previous year was an average year for us; however, we did marginally better than what we did in 2012.

Q. What benefits did the previous year bring to your company?

A. There have scarcely been any isolated benefits; it was more of a balance of factors, both positive and negative. Take, for example, the rupee depreciation. On the one hand, input costs for both, imported and domestic material rose considerably for an industry already struggling to keep pricing competitive. On the positive side though, manufacturers with international benchmarks have benefited in their exports; and domestic waste paper collection rates have improved following better pricing.

Q. The industry remained hanging between hope and despair during the previous year. Will it remain underpowered in the coming two to three years as well?

A. Global cues do not inspire much confidence, and the global paper industry is likely to remain saddled with overcapacity. In the Indian context, there is a sense of uncertainty owing to political instability. It will be interesting to see how the government works after the general elections to get the economy back on track, spurring demand and inevitably growth.

Q. What measures must be taken by the industry in the current year to empower the engines of growth and take people to renewed prosperity?

A. I’m not sure what an industry that is plagued with overcapacity, poor demand, high interest rates and high input costs can really do. We can only hope for a positive political direction that has the stability and consistency that can remove some of the hurdles the industry is facing and put it on the fast track of growth. Initiatives can be taken by mills, especially those near ports, to improve quality and to upgrade their products to meet the international standards for exports. They will be better equipped to battle domestic slowdowns and poor demand; they will gradually help in balancing demand and supply.