Genus: Driving kraft growth and creating capacities

New Delhi-based kraft paper manufacturer Genus Paper is pumping big bucks as it aims to provide options to the Indian corrugators to take advantage of the expected boost in Indian consumerism. WhatPackaging? team of Sujith Ail and Rushikesh Aravkar take a trip to the company's Moradabad plant to witness the paper making operations firsthand

14 Jan 2019 | By WhatPackaging? Team

The Moradabad plant boasts of two paper mills manufacturing multi-layered kraft paper

The ban on waste paper import by China is seen to have a positive impact on India. The trade war between China and the USA is at its peak. Consumerism and mobility among Indians is riding high pushing retailing and e-tailing. These situations are boosting business opportunities in India.

Kailash Agarwal, managing director, Genus Paper is very positive about these market conditions. He says, “It is an opportune time to be in the Indian paper industry. The Indian paper industry has shied away from making technological advancements for the past two decades. But now things are changing.”

“The demand for quality has risen. Today, the market is transforming from being cost-conscious to being quality-driven. The quality of Genus kraft paper is among the best in the North region. We get a premium of 3-4% as compared to the competitors,” adds Agarwal. 

Today, Genus is in a position to command a premium in the market that it functions in because of its focus on efficiency improvement. When WhatPackaging? team visited the Moradabad paper plant, things were evident. Highlights: well-equipped paper testing laboratory, a strong QC protocol for consistent paper quality as well as uniform kraft shade, clutter-free operations.

The Moradabad plant houses two paper mills manufacturing multi-layered kraft paper by recycling waste paper. These are three wire machines that manufacture high tear strength paper ranging from 120- to 450-gsm and a burst factor of 18BF to 40BF. An inline scanner across the web width constantly monitors the quality of the output.

Agarwal explains, “There are three types of paper companies – one, using wood pulp to manufacture paper, two, agro-residue-based paper making, and three, recycling papers to manufacture kraft paper.”

Of the three, the third one using recycled paper requires the least amount of water. Genus is a 100% recycling-based paper mill. Over the years, Genus has spent money and resources on technology to reduce the water required to manufacture kraft paper.

“We use 1.5 cubic metres of water per tonne of paper production. Five years ago, this used to be around 20-25 cubic metres of water. Moreover, we are almost zero liquid discharge plant. The 1% liquid which is discharged is well treated under CPCB norms and has well-equipped ETP.” 

In order to further enhance its operations, Genus is revamping its paper mills in Moradabad. The project once completed by the end of 2019 will make 80% of machinery at Genus’ plant European-made.

“Everything has a cost. If the market is ready to pay for the quality then we are ready to invest,” says Agarwal. 

Genus manufactures high tear strength paper ranging from 120- to 450-gsm and burst factor of 18BF to 40BF

Building capacities
The Moradabad paper mill was set up in 1976 by DSM Group Agro. When Genus Paper and Boards, headed by Agarwal, acquired the mill in 2002, it produced 18,000 tonnes of kraft paper per annum with one paper manufacturing line.

Established in 1996, Genus Paper and Boards is today one of India’s leading manufacturers of industrial kraft paper in North India. An integral part of the Kailash Group, the company has its business diversified into kraft paper and mild steel ingot production. 

“While acquiring the plant in 2002, the focus was on the packaging industry and new products were coming into the market. Communication was seeing a rapid growth with the tremendous increase in the number of mobile phone users. Things which were not available in India were certainly available in European and American market would come to India in the next 10-15 years. If these things or products will come into the Indian market, evidently packaging requirement will also increase. Keeping this in mind, we kept on increasing our capacity. In the period of 16-17 years we scaled up our capacity from 15,000 tonnes to 1,50,000 tonnes and will reach 2,00,000 tonnes per annum.” 

“After the acquisition, we installed a power generation plant of 3-MW capacity to cater to become self-sufficient in terms of electricity requirement. In 2004, we started setting up a second kraft paper manufacturing line which was completed in 2006. By the year 2007, both the lines were up and running and there was complete captive power generation.”

With the two lines, the total production capacity reached 60,000 tonnes per annum. Over the years, Genus has invested in upgrading the plant, which today has a capacity of 1,40,000  tonnes per annum. By the end of 2019, the total production capacity will be 2,00,000 tonnes per annum. 

(l-r) Santosh Pandey, Lokesh Pareek, PC Gupta of Genus Paper

Future plans 
Agarwal is bidding big on the eCommerce boom and potential plastic bans. "The packaging has a huge potential in the coming years. There has been several bans on the use of plastics. As more and more government agencies implement ban on plastics, the demand for paper-based packaging will increase.”

"The way packaging is growing, according to my understanding, kraft paper will grow at a rate of 9% CAGR. If the growth happens at the same rate along with the consolidation, we may see ourselves with the capacity of 1-million tonnes in the next five years." 

Genus Paper has entered into two non-binding Memorandum of Understanding (MOU) for setting up kraft paper manufacturing plants with the Government of Maharashtra to invest Rs 1,050 crores and with the Government of Uttar Pradesh to invest Rs 600 crores for the expansion of the current manufacturing facility.

Agarwal says, “We are at the initial approval requirement stages. We are obtaining approvals related to the environment. We have applied for land acquisition. Within the next six-nine months, all required approvals will be obtained. We will be focusing on how to raise funds and start the set-up.” 

"We will be closing 2019 approximately around 450-500 crores. FY2020-550 crores and in 2021 there will be a new expansion, our turnover will almost reach up to 700 crores with the existing facilities. If any further acquisitions happen, it will be more than that," concludes Agarwal.

Kailash Agarwal, managing director of Genus Paper

Genus’s growth curve 
Rs 346-Cr revenues in 2017-18, 13% YoY growth

Rs 36-Cr EBIDTA in 2017-18, 66% YoY growth

Rs 15-Cr PAT in 2017-18, 112% YoY growth

Employee strength of 396