As per a senior JK Paper official, "The additional capacity of 1.38 lakh tonnes will be produced from the Telangana plant in Sirpur, where production will begin in April 2019." The plant will help the company venture into the colour paper segment for the first time.
At the moment, JK Paper is a speciality paper company that manufactures coated, printed as well as copier paper. According to market pundiits who spoke to PrintWeek India in Kolkata, "The thing to note in case of JK Paper is that it operates in the speciality segment where pricing power is very strong. (While) the uncoated segment generates the highest revenue."
In addition, JK Paper will add 1.5 lakh tonnes in the packaging board vertical in the next two years.
The company registered a net profit of Rs 109.57 crore for the quarter ended 30 September, 2018, a rise from Rs 56.63 crore in the previous year period.
Last year, Bharat Hari Singhania, in his chairman speech said, "Paper not only managed to achieve a turnover of around Rs 3,000 crore, but achieved better profitability with an EBIDTA of over Rs 539 crore. Our strong distribution reach made a big difference in this regard. With a team of 191 distributors operating out of 14 depots, we were able to maintain a leadership in the copier segment with a 24% market share and amongst the top two positions in the coated paper and packaging board segments. We are also actively involved in market expansion outside India, exporting our products to more than 40 countries."
Today the Indian paper industry is estimated to grow at a compounded annual growth rate of 6.6 per cent between FY16 and FY19 across various categories by touching 18.5 million tonnes of capacity in FY19 from 15.3 in FY16.
Four reasons why paper stock is on the rise
- Paper demand revived in India due to a cut in paper production in China as a result of environmental concerns
- Paper being deployed for ready-to-eat food products due to the ban (or prospective ban) on plastic bag usage
- Paper sought for quality packaging in FMCG products for organised retail
- Paper consumption boosted thanks to rise in literacy and growth in the education sector