Papermart
Special Feature

“With gradual opening of all sectors, demand for paperboard should improve”

This article is a part of Silver Linings to the Corona Cloud feature

Mr. Vadiraj Kulkarni, Chief Executive, ITC-Paperboards & Specialty Papers Division

Operations and Workforce Management

The onset of the COVID-19 pandemic in India and consequent lockdowns and risks compelled the businesses to draw up a set of comprehensive protocols in terms of social distancing and sanitisation. Massive awareness and educational campaigns using posters, audiovisual aids were conducted to ensure that all workers and managers understand the protocols and adhere to the same. Various measures viz. change in shift timings to reduce overlaps, changes in canteen timings for various shift crews, infrastructure upgrades to ensure social distancing in control rooms, canteens, etc. were implemented to aid adherence to protocols. For critical maintenance jobs including troubleshooting, remote assistance from OEMs/experts was sought. All communications, meetings were conducted through IT platforms instead of face-to-face meetings.

Supply Chain Management

The supply chain system came under stress due to lockdowns in the initial phase and localised lockdowns during the second wave. In addition to the shortage of loading and unloading crews at various nodes in the supply chain, the movement of goods across states and the availability of drivers for certain sectors posed big challenges. Transport costs went up due to some of these issues. Certain nodes in the supply chain were disrupted due to enforcement of rules in some pockets, both in the first and the second wave. The business was geared up to meet these challenges better in the second wave. And proactive measures in ensuring availability of trucks, loading/unloading crew, etc. were put in place, which ensured the smoother flow of materials across the country. Building additional inventory at various nodes of the supply chain also helped the availability of required materials for customers.

The global supply chain for commodities has been severely impacted for around a year now, leading to delays in imports and exports. The situation continues to be grim, due to the shortage of shipping vessels and containers. Ocean freight has witnessed a multifold increase in the last six months and is likely to continue, thus adding costs to the business.

Market Scenario and Profit Margin

The writing and printing paper demand got severely affected during the early stage of the pandemic and the subdued demand continued for two more quarters due to the closure of all educational institutions. While the demand picked up later, hoping for the opening of schools, the second wave did not help. However, in the packaging board section, the demand has been quite robust for most of the customer segments, though in 2020-21, certain segments witnessed a steep fall in demand, also affecting prices.

Expectations from the Government

No comments.

Future Outlook

With the vaccination program going quite well, educational institutions should be opening soon, which will propel a jump in the demand for writing and printing paper. The demand for various paperboard types should further improve with the gradual opening up for all sectors. And these are good signs for the industry.