Building a corrugation giant in the heart of Punjab

The growth of the textile industry in Ludhiana has paved the way for the growth of ancillary businesses as well, such as packaging for the textile industry. Sankeshwar Packaging and Vardhman Textile Components (VTCL) are the best examples of this. Both the companies are run and owned by Deepak and Parth Jain.

Deepak Jain and his brother-in-law Girish Jain started Sankeshwar Packaging in 1991 to cater to the corrugation demands in Ludhiana, especially for the textile industry. It was a manual plant with a capacity of about 40 tonnes per month. 

Since then, the company has kept upgrading its facility, and now, it has an automatic plant.

To begin at the beginning
Vardhman Textile Components was established in 1995. Initially, the company manufactured paper cones for the spinning industry and started with an imported German machine. “For many years, it was the largest paper cones manufacturing unit in India. Even the world’s biggest paper cone manufacturers offered us partnership with a major stake, but we declined,” Parth Jain says.

In 1996-97, the Jains started upgrading the corrugation facility with single-facer fingerless machines and gradually replaced electric heating with steam heating in 1999. “Gradually, we started increasing our tonnage in Sankeshwar Packaging for manufacturing corrugated products. We reached up to 300 tonnes per day in 2014. It was the maximum we could do, and we realised the need for an automatic plant. So, we opted for an automatic plant,” Jain says. 

It was at this point that Jain joined the business. Previously, he worked as an internal auditor at Ernst & Young in Mumbai. 

The Jains hope to increase their kraft conversion to 1,800 tonnes per month

Going automatic
Jain joined the company in January 2015. He says, “I was trained in accounts and finance and had no idea about manufacturing. My father was clear that without experiencing semi-automatic manufacturing, I would not be able to handle an automatic plant. So, I spent many months on the shopfloor with the team. I learnt how the single facer runs, how the pasting machine works and other processes, such as, how the stitching is done, how cutting is done, and the complete manufacturing of a corrugated box.”

From January to July 2015, Jain trained in the old factory as he started planning for the new plant. “I came into a workspace where people were not educated but highly skilled. They taught me everything about corrugation. And I witnessed a lot of practical problems. I decided that once we go for an automatic plant, we will get rid of all the practical problems,” he says.

The company started constructing the new plant in September 2015, and the unit was commissioned in April 2016. In 2015, Jain visited the corrugation exhibition in Shanghai. “We met a lot of vendors and machine suppliers. We also visited factories and studied machines and technologies appropriate for our plant. I was appointed as a project head, and bought machines, utilities, boiler, compressor and other required equipment,” Jain says, adding, “My father taught me a lot. You can say that corrugation runs in my blood. Fortunately, I was not a trained engineer so it was an entirely new learning for me.” The automatic plant became Vardhman Textile Components (VTCL) while Sankeshwar Packaging remains a semi-automatic plant.

Structure of Sankeshwar and VTCL
Both the companies are run and owned by Deepak and Parth Jain. In the last seven years, they have made some additions to the new plant. It has a two-metre decal machine with two two-colour flexo printers and a fully automatic stitcher from Korea, plus a Taiwanese stitcher. It also has four manual stitchers. The glue kitchen is in-house. 

“We convert about 1,200 tonnes on an average per month in Sankeshwar and VTCL. Sankeshwar is dedicated to small volume and customised boxes,” Jain says.

The Jains also opted for a brownfield expansion and purchased 1.2 acre of land. But, right now, Jain says, space is one of the biggest constraints. So, he plans to construct a multi-storey building with new offices and storage with automatic weight pillars and automatic logistics. 

“We will be able to convert 1,800 tonnes per month with the new construction. We will install conveyors because right now we have palatial movement. We will put an automatic bailer too. We are working to increase the speed of our corrugator from 130 to 160-m/min. Our glue kitchen will be fully automatic. We have to install automatic splicer too which is not with us till now,” Jain says.

He adds, “Our journey couldn’t have been completed without the help of our group chairman Shripal Oswal and his family.” 

Growth trajectory 
In the next two years, the company is working to increase its conversion from 1,200 to 1,800 tonnes of kraft per month. It is also looking at a growth of CAGR of 15 to 18% over the next three years. 

Jain says maximum growth is expected from the five-ply segment because customers are looking for fewer plys with more strength. “Cost reduction is the ultimate goal for them. Fibre reduction will reduce the cost but for strength, they will need compressions and bursting,” he explains. “According to my observation in the last five years, seven-ply corrugation is not the norm because five-ply corrugation is capable of fulfilling all the requirements. The reduction of two plys reduces the cost on all dimensions, the cost of kraft, transportation, energy consumption, and so on. Modern corrugators and new techniques can meet all the requirements with five-ply instead of seven. Our customers are going for three-ply boxes, especially for light goods, so the reduction in ply will be there.”

Serving the textile industry
At the moment, the company is serving the textile industry. While textile is massive in Ludhiana, Jain says, other segments, such as FMCG and electric cycles are equally big in the city. 

Jain says the Ludhiana market mostly requires single or double-colour jobs on corrugation. “We have partnerships with offset printers for multi-colour jobs. We have all the facilities to meet our customers’ demands for corrugation. We are the only corrugator in Ludhiana who can print four colour jobs in-house. We can even do six colour jobs, but the market doesn’t demand it,” Jain says.

In the 1990s, Deepak Jain was among the first few who introduce five-ply boxes, instead of seven-ply boxes, to the textile industry. He did a time and motion study called – Walk with the Box. He mapped the entire journey of a corrugated box from manufacturing to delivery to the customers’ site to loading into the vehicle and to delivering at its final destination. Then he suggested to the customers that there is no requirement for seven-ply boxes. 

“Today, this is normal, but in the 1990s, it was not. We converted our customers from seven to five-ply by engineering with better parameters. We do a lot of size rationalisation for our customers,” Jain says.

The company’s production and research and development team visits customers’ shopfloor and suggests solutions according to their needs. “For example, we convinced our customers to use single-size boxes instead of using multi-size boxes. They were using multi-size boxes because that’s how they had been doing the business and there was nobody to suggest otherwise. We showed them how single-size boxes reduce costs. Also, the same boxes can be used in multiple plants. It simplified their order process,” Jain says.

He adds that the company’s recent biggest innovation is the compression strength of per gram of paper used.

“We have been able to deliver one of the highest compression strength for the textile as well as the bicycle industry,” he says. “Our compression strength is 20-25% higher compared to the competition with the same specifications and parameters because of our manufacturing process. We always give corrugated boxes with minimum flute crush. We manufacture C- and B-flutes and around 95% of our total production is both flutes. Our C-flute is somewhere between A- and C-flute. Thus, we get the advantage of A-flute and cost saving of C-flute in the same flute.”

He adds, “We worked very hard while finalising our flute sizes. I visited a scrap dealer and used to sit in his godown to study the flute sizes of the scrap. We are happy with our flute profile from the last seven years.” 

A team of 110 runs the show

Dealing with Kraft
Jain says while there are issues regarding the quality of kraft paper, with 30 years of experience in the company and its stringent quality standards, it could get better kraft. 

“Our paper is odour-free. We pay a premium to paper mills because we want to deliver good products to our customers. We have never managed to squeeze the paper dealers or paper manufacturers. Deepak Jain was one of the first corrugators who imposed penalties on real joints. We can’t stop the machines because of such reasons. We have proper pore sizes, and proper diameters because we started these practices 30 years ago. We are satisfied with the Indian paper mills and don’t have any major complaints. In our quality testing lab, we have instruments for checking different specifications of paper, such as gsm, moisture, bursting strength, and compressive strength for the reliability of a paper. We even have a paper RCD machine,” Jain explains. The company does online checking during the manufacturing of the board. It also does final checking and pre-dispatch checking. 

“Bursting strength, compression strength and weight of the corrugated boxes are important for each customer. There are other aspects like no smell, no cracks during the fold, and no gaps in flapping when it is packed. All these qualitative aspects have to be taken care of. Another underrated but important aspect is the right size of the packet,” Jain explains.

“Our machines are designed to create corrugated boxes of +/- 1-mm tolerance. Because of automation, all machines are computerised. They are numerically controlled machines with a PLC and a drive in them. So, whatever you enter into your system will be what is produced on the machine.”

What is more important, bursting or the compressive strength of a corrugated box? Jain says it depends on the nature of the product. Bursting strength is reduced in an automatic plant compared to a semi-automatic unit, and it is a disadvantage. 

“Customers educate us in key aspects, especially when they pack, store and load the material. Compression strength and ECT are important for the customer. In printing ink, shades and viscosity are important in determining the final package quality. If your printing is neat and clean, the boxes will be accepted,” he explains. 

He says the company always uses rust-free stitching pins and educates its customers about it. The company also produces corrugated boxes with gluing. “We have both the facilities and we are educating our customers. The disadvantage with gluing boxes is that it has less strength compared to stitched boxes,” he says.

Running the business
A team of 110 people runs the show in a 12-hour operation. Jain says batch sizes are small in Ludhiana compared to other parts of the country, and the company serves its customers whatever the demand is, whether their demands match the decal size or not. 

He says, “For me, the conversion itself is not a time-consuming press, the only concern is the changeover of jobs. Ludhiana has more than 250 semi-automatic small corrugation units. It also has four to five automatic corrugation lines and a few more are coming soon. So, our mid-term goal is to run the facility 24 hours a day and increase our kraft conversion from 1,200 to 1,800 tonnes per month. 

Jain’s ambition is to be among India’s biggest corrugators. “We are one of the fastest-growing countries. So, there are huge opportunities for growth. Our group chairman suggests that we should take one step at a time and we are following that. We have a long journey ahead and we do not want to be over-leveraged as many players in the industry are. We are working to have a neat and clean unit with good hygiene practices so that we can cater to corporates, MNCs and other entities,” he explains.

So, the short-term plan is to notch up to 1,800 tonnes of conversion. The mid-term plan is to establish a 24-hour facility, following by backward integration. 

“First, we will open units in the state and gradually, in the neighbouring states. This is the plan we have in mind. Let’s see how much of it we can execute,” Jain says, adding, “Scaling up has its own challenges. We are a team of two members in the top management, Now, we have to have professionals to manage the show.”

Best practices
Jain is proud to confirm that the company’s shop floor is one of the cleanest in the country. As soon as waste comes up, it is removed within 120 seconds. It is lifted from the shop floor and assigned to the designated waste area. 

The company uses high-temperature grease for its bearings. It costs between  Rs 15,000-20,000, and the company uses it for uninterrupted production. “We want to ensure our maintenance so that we can run the corrugator for the next 20 years,” Jain says. “From day one, we are strict with our workers about machine maintenance before the production starts and after production ends for the day. We have been able to keep maximum uptime of our machines. That is how we have been able to service our customers.”

Jain believes that manufacturers have a duty to establish and maintain a green production factory. “The first step in that direction was to ensure that we get an Forest Stewardship Council (FSC) certification. The FSW certification shows our suppliers are not cutting trees for paper and destroying the livelihood of others. There are other small steps that we are going to take in the future. First, replace our diesel forklift with a battery-operated one. Secondly, we are working to be a zero-discharge factory. We have an effluent treatment plant installed in our factory but we will ensure that the water that is generated can be recycled and used in the glue kitchen. And third, a solar power plant is also on the cards,” he says.

It’s quite clear that the Sankeshwar Packaging seek a growth reset as it prepares for the future.n