The right quality of kraft paper, optimum application of starch and the precise heat control on the corrugator makes for a perfect brown box. I picked up this ‘simple but not easy’ recipe during my trip to the Printing and Packaging Division of the South India Paper Mills (SIPM-PPD). It is situated on a 12-acre site in the pristine town of Nanjangud in Mysuru district, a three-hour drive from Bengaluru. This is perhaps one of the very few places in India where the finest corrugated boxes are manufactured.
As I enter SIPM-PPD’s 1,50,000-sq/ft production floor, Pratik Patel, the marketing and product development manager at SIPM-PPD, explains how the company has mastered this recipe: “We have been working with our paper division to develop and enhance the quality and consistency of linerboard and fluting medium. That’s the input.
The other critical part is having precise control over the process parameters – small things like steam inflow, roller temperature, adjustment of paper wrap and glue-gap as per the machine speed and the grade of the paper. This needs the right set of equipment and a higher degree of automation on the corrugator.”
Patel, who has been with the company since its inception in 2008, is completely hands-on with the latest box-making technology that the company has deployed.
The cornerstone of the plant is the five-ply corrugation line from Italy-based Agnati. When I visited the plant, the 115-metre line was producing B-flute boards at 300m/min.
“It has minimum touch points. Most of the process variables are controlled automatically by the machine, based on pre-fixed recipes. Just five operators drive the machine from start to finish,” extols Patel.
While the massive corrugator is undoubtedly impressive, the three striking features of SIPM factory are: maximum utilisation of space, an end-to-end automatic plant in the true sense of the term, and equipment layout that enables minimum wastage, smooth material flow and uncluttered shopfloor.
One corrugation line is complemented with four finishing lines. The first is a five-colour printer with rotary die-cutter equipped with an automatic board feeder and a vibrator stacker. A Topra printer-slotter, paired with an Oshitani folder-gluer, forms the second line. The third one is an Emba flexo folder-gluer and the fourth and the latest line is a Bobst 8.20 Discovery flexo folder-gluer (FFG).
The Bobst FFG, which was commissioned in July 2017, is a four-colour machine equipped to produce 300 boxes/min. At most corrugation plants, the automation ends at this stage. However, at SIPM-PPD, the Bobst FFG is followed by inline Mosca automatic bundling and strapping kit and the line ends with a load former that ejects a ready-for-dispatch pallet.
“Here again, only four personnel are sufficient, a couple of board feeders on the Bobst machine and one at the load former. We deploy one additional manpower to keep an eye on the quality of the boxes, just to be 100% sure,” explains Patel.
It is this level of sophistication that permits a world-record production of 1,06,113 corrugated boxes in eight hours. See Box
The Agnati corrugator sits horizontally at one end of the shopfloor and the four finishing lines are arranged perpendicular to Agnati, at its dry-end. There’s a network of conveyors and railings on the shopfloor that enable smooth movement of palletised stacks of corrugated sheets from the corrugators to the respective finishing line.
Beside the finishing lines, in the other half of the shopfloor, is a hydraulic bailing press. The finishing lines are positioned in such a way that scrap paper ejection point of all the lines fall in one horizontal line. Along this line is a conveyor installed just under the floor that carries the waste paper to the bailing press. The compressed waste paper bales from the bailing press are sent to SIPM’s paper division for recycling. The shopfloor is spick and span.
Pratik Patel (l) and SIPM-PPD's production team along with the Bobst FFG
SIPM-PPD achieved the masterstroke of producing 1,06,113 boxes in eight hours on 19 September 2017. Patel says, “It was a regular day at work. We had to run five job changes in the shift. One of the jobs involved two-colour printing and the rest were single-colour jobs. In particular, one of the jobs was a beer carton box, which is a very lightweight board construction – 100gsm, three-ply board with B-flute. This kind of job adds more value to us as well as to our customers if processed at the fastest speeds with maximum accuracy, so that it runs flawlessly in the fast case-erecting and filling lines at the customer’s end.”
“Usually, we produce 75,000 to 85,000 cartons in one shift. In this particular shift, we achieved the average of 13,264 boxes per hour, including the set-up and cleaning time.”
Educating the client
After the de-reservation of the corrugation industry, when SIPM set up the Printing and Packaging Division, it invested in a five-ply corrugator from JS Machinery that could run at 180m/min and a finishing line consisting of Topra and Oshitani that exist even today. It could manufacture 1.2-lakh glued boxes in 24 hours.
“But there were no takers for glued boxes. The customers asked us how can a glued box that sticks two plies together provide strength of a stitched box that stitches all five layers of the two ends? This needed a change of mindset,” says Patel.
He adds, “We approached one of the distilleries to use glued cartons for whisky (glass) bottles. The box required to hold 18kg of products inside, so the client was initially reluctant. However, we managed to persuade the decision-maker at this proprietary firm, and he agreed to give it a try. We supplied glued boxes and to his surprise there were no damages. This was one of the first breakthroughs for us.”
At the same time, the edible oil pouch segment was keen to switch to glued boxes as it would minimise the wastage due to the staple pin damages caused to the plastic pouches. “So we supplied glued boxes as per the specifications provided and the quality was obviously better than what was available in the market thanks to our paper and automatic plant,” Patel adds.
Meanwhile, the company worked with its paper division to manufacture a new paper grade called high-performance liners (HPL) and flutes. “So, after a year of supplying glued boxes to the edible oil segment, we proposed light-weighting from five-ply to three-ply with this new grade of paper. This also required persuading the clients to change specifications, because nobody was doing it then. With three-ply HPL glued boxes, the repacking costs that these companies used to incur reduced from 18% to 5%. This was a big success,” Patel explains.
This proactive approach also helped SIPM to secure confidence among buyers. Today, SIPM works with all the top MNCs on several new product development projects as well as light-weighting. The trend of five-ply to three-ply is a thing of the past. Today, brand owners are looking at shift from higher grammage three-ply to lower grammage three-ply as well.
“The box weighing 330g a few years ago has been replaced by a 250g box. There are many applications that use only a three-ply box with 100gsm liner and flute construction. So that’s the new level of optimisation,” Patel says.
Tonnage wise, SIPM produces 2,500 to 3,000 tonnes per month. But that’s not the correct way to describe the capacity of a corrugation plant, insists Patel. “Internationally, the capacity is calculated in square metres. We, at SIPM, manufacture 5.5-6-million sq/m of boards/boxes per month,”
In conversation | Manish Patel, managing director, SIPM
Has the business environment improved? How does one explain the new investments in the corrugation box industry?
The business environment hasn’t improved. The market is demanding certain quality of product and in order to cater to this demand, technology upgradation is required. Secondly, because of these investments and scales, the delivery times have shortened and hence you need converting machinery that deliver at same speeds. So these investments have come in as technological upgradation and should not be attributed to market growth.
What’s the market growth?
In my view, corrugation continues to grow at the rate of 8-10% per year. However, when investment levels go high and sophisticated technology comes in, you need high volumes to map this technology. Therefore, it is more likely that there will be fewer players with larger volumes. Consolidation is inevitable.
Today, the plant that has all the right equipment and automation in place needs an investment of not less than Rs 70-80 crore to convert up to 3,500 tonnes of paper into corrugated board per month. Now, when you put that much investment into one geographical location where there is box demand, each player is looking for large volumes to break-even. So, how many such plants can a particular region with certain amount of demand accommodate? This is important to understand. Today, the intensity of competition is rising. There is some momentum from the FMCG sector. However, these companies prefer to source from larger players who have capacities and capabilities to deliver faster.
Take Bengaluru, for example. The total market volume is in excess of 15,000 to 17,000 tonnes for automatic plants, as on now. Another 10,000 tonnes is converted by the conventional process. Today, the delivery order size has increased because the number of vendors that they are sourcing from has been cut down. If somebody needs, say 40,000 boxes in a day, earlier they used to have 12-14 vendors. Now, they have three to four vendors. Consolidation to that extent has happened.
So, what does one do to remain in the business?
For an existing player with semi-automatic operations, in order to remain in the business, he needs to make investments, which will allow him to match the scale that is expected in the market today. Now, if and when he decides to take the plunge, it is one more player in the pool. However, earlier he was converting 300 tonnes. Now, in order to break-even he needs to convert minimum of 1,000 tonnes. So unless people measure the market size and make conscious investment decisions, there will be aggressive competition.
With new technology, the quality of box improves, leading to optimisation of specifications and light-weighting. Does that mean the overall market will shrink?
Yes. Brand owners seek lighter and stronger boxes. While the box demand will continue to expand, the capacities in terms of corrugation speeds and conversion speeds have to increase. That’s because, ultimately, a corrugator is paid on the basis of the tonnage that he converts. So, one will not be able to generate that much contribution of conversion margin to sustain the costs and return-on-capital-employed numbers.
Does our industry need to seriously re-look at shopfloor operations to minimise the waste?
The wastage in an average corrugation plant in India is as high as 14-15% . One of the primary reasons is the poor quality of paper. Not just converting of paper into box, but manufacturing of good quality paper from the available raw materials is a big factor. This will determine the efficiency of the corrugation plants. If the good quality of paper is available, which runs on the corrugators with less wastage, minimum rejections, consistent performance then that corrugators will buy that paper.
Has our industry seen a shift in the manner in which contractual agreements are drawn between vendor and client?
The lack of transparency in the reverse auction is the bane of our industry. For a serious player in the market, it is important to know who he is bidding against. Just the name is adequate. If my fellow bidder is a reputed company which has the infrastructure to meet delivery requirements, then I know it’s a serious bid and it’s a fair game for us. However, many a times, a smaller company with inadequate capabilities also places the bid and even if that company doesn’t win the contract, it spoils the market.
Today, the market is fragmented and highly competitive. So much so that the prices of all the “worthy bidders” are almost the same. They are at the lowest possible numbers they can be at. The problem is new investments continue to happen, which is creating excess capacity of supply. So there are high chances that somebody, in a desperate bid to survive, will drag everybody down.
So how do you convince your customers?
The answer is value addition. There are technological solutions where you can use better paper, reduce cost, or shift down the specifications, so that the brand owners have an opportunity to save money. We educate the clients in terms of how they can improve their efficiency levels using correct kind of box. We also conduct productivity improvement and cost-saving projects with them.
Which is the emerging segment that will drive the corrugated box industry?
The fruit and vegetable sector will be a big driver. At the moment, the market is limited to exports. However, imagine when the local market also demands a corrugated box. We have worked on very lightweight models like 120gsm three-ply board with white top liner for printing graphics. In India, plastic crates are commonly used for shipping fresh produce. However, if you give them a solution that has low fungus count and bacterial count, lightweight and bring their costs down, then the farmers would be interested. The USP of these corrugated trays is that they are one fruit high. It enables transit protection and therefore reduces food wastage to a large extent. Again, we need to educate the stakeholders. We have to bring viability by bringing cost-effectiveness. Then there is tremendous potential.