Paper Day (1 August) brought in good news for the stock paper manufacturers. JK Paper led the way with a 100% increase in consolidated revenues to Rs 1,508.1-crore. Market pundits said this was due to strong demand as well as the impact of the single use plastic ban.
The company’s consolidated operating profit was 104% on a year-on-year basis, while its net profit tripled to Rs 264-crore in the June quarter.
A report published by Centrum Broking is bullish on the paper stocks. This is particularly true for the mills that are backward integrated. This includes mills, such as West Coast Paper, JK Paper, Andhra Paper, and Seshasayee Paper. This is why the run of paper shares, especially the shares of JK Paper, West Coast Paper, Tamil Nadu Newsprint (TNPL) and Andhra Paper are up 7-17%.
JK Paper commissioned production at its new packaging board plant in Gujarat. According to the company, the new packaging board plant should give a revenue close to Rs 1400-crore on full capacity utilisation. The plant will upscale the company’s annual capacity from 455,000 tonnes to 625,000 tonnes. Built with an Rs 14.5-billion investment, the plant will provide 200,000 tonnes of additional production capacity a year. The expansion is also intended to increase JK Paper’s market share in the packaging board segment.
Meanwhile, West Coast Paper has boosted the capacity at its paper and paperboard division in Dandeli. The production of paper and paperboard was 2,96,785 MT (93% capacity utilisation) during the year against 2,29,017 MT in the last year (72% capacity utilisation). That’s higher by 67,768 MT. The sales of paper and paperboard were 3,03,715 MT during the year against 2,34,667 MT in the last year, which is higher by 69,048 MT.
The West Coast Paper turnover during the year was Rs 1,858-crore as against Rs 1,281-crore in the last year, higher by Rs 577-crore.
Meanwhile TNPL’s mission is to manufacture one million MT of paper and paperboards by 2030. The journey began in 1984 with a capacity of 90,000 MT per annum. Since then, TNPL has grown steadily and enhanced the capacity to 6,00,000 MT consisting of 4,00,000 MT of printing and writing paper and 2,00,000 MT of multilayer packaging board with in-house facilities for pulp, power and filler materials.
As part of its growth plan, TNPL has taken up Mill Expansion Plan (MEP) in Board Plant Complex, Unit-II at Mondipatti Village, Tiruchirapalli District, to be implemented in two phases with a capital outlay of Rs 2,520-crore.
The paper industry is classified into four main segments: writing and printing paper, industrial packaging paper, specialty paper and newsprint.
According to Rohit Pandit, secretary-general, Indian Paper Manufacturers Association (IPMA), Today, India ranks 5th among the paper producing countries in the world with a total operational installed capacity of 24 million tonnes.
Pandit said the demand is 20 million tonnes. The per capita consumption of 15 kg against the world average of 57 kg.