How can paper deliver on its green ambition and succeed

Rahul Kumar (RK): According to reports, paper consumption in India will reach 30-million tonnes by March 2027. Your view?
Amit Gupta (AG): To reach this milestone, we will have to increase the per capita consumption of paper products, whether it is the use of paper bags, as well as paper being deployed in printing. Also, the industries need to work on the standardisation and quality of the paper to boost its sales.

RK: But if we look at the per capita consumption of countries like the US and Europe, our consumption is much less ...
AG: There is going to be a steep upward rise for the next couple of years. The numbers are improving day by day. The packaging market is growing significantly. This will allow the market to grow sustainably. India has taken 50 years to become a four-trillion economy, but it will take five to 10 years to be a 10-trillion economy. In the next 20 or 30 years, we can be the biggest paper market in the world.

RK: While recent reports say that the revenue of paper makers will crumple by 8-10%, most paper companies have improved their balance sheets. What has contributed to this volatility?
AG: This volatility was due to the high pricing of waste paper, pulp, sea freight and other raw materials. Last year’s coal episode — double the cost of coal — also created a problem for the industry. These two factors were the main reasons that got the paper industry backwards. This year has been better compared to last year.

RK: What have been your best practices or precautions in such tough times?
AG: We prioritised both internal growth and customer care and invested in machine upgrades and quality standards. We strived to stay ahead of the curve, constantly learning and evolving. No matter the distance, we work as a seamless unit to nurture our business. Such practices have helped us to grow sustainably.
 
RK: Do you purchase raw materials in large quantities when the price is low?
AG: If you buy a large stock, you need more funds and a bigger warehouse to store the raw material. The raw material is highly flammable. So it is a risk to store it for a long time. Overall, these things do not matter that much if you have to move sustainably. And in business, we must follow some rules and do fair practices. These are small things that hardly matter when you are running a business on a large scale.

RK: Noted. Let me rephrase the question. Many Indian paper mills are talking about challenges on the raw material site and world vitality which could impact the manufacturing cost. Your views on that?
AG: It’s all about demand in the market and you cannot control it, For instance, there is less demand in India as compared to other countries, or there is more demand in India as compared to the Western countries. So the price fluctuation will exist in both cases. Every product faces price fluctuations. This is an ongoing process. And this happens in every industry.

RK: What about recycling at Dev Priya Industries?
AG: We do 100% recycling. We have been doing 100% recycling for the last 20 years. We have been one of the zero-liquid discharge companies for almost eight years now.

RK: You produce kraft and duplex. Which sector will witness a growing demand as per your assessment of the market?
AG: Both the markets will complement each other. Because, you see, if you buy any cosmetics or clothing products, they are packed in the mono carton and the mono carton is a duplex. The mono cartons will go into a big carton. In this sense, all these markets complement each other.

RK: What about writing, printing and newsprint?
AG: These are different segments. Last year, there was an unexpected boom in the market for printing paper, which shows that the demand for paper products is increasing in the market.

RK: A word about the technology investments and what type of equipment you have put your faith in?
AG: We have the best machines and equipment for pulping and paper-making. We use technology for everything we make, as it helps in saving money, effort and time. We have a chain of paper suppliers. We don’t compromise on technology; we use world-class technology. We have quality steam systems which help maintain the quality of our work. Currently, we are running six paper production lines.

RK: What is the trickle-down effect of plastic substitution which was expected to transpire due to the single-use plastic ban?
AG: I don’t completely agree with this because if someone says that single-use plastic is completely banned it’s not correct. You step out and you will see single-use plastic being used. If you wish to stop the use of plastic, then you have to shut down the refineries because crude oil is one of the sources of single-use plastic. Closing refineries is not practically possible. You can reduce the use of plastic but you cannot end it.

RK: Do you see an increase in paper consumption after the single-use plastic ban?
AG: Yes, there is a huge increase in paper consumption. Today, you see higher usage of paper bags. Many big companies have started using paper bags. People are becoming much more educated and aware of the environment. People are becoming responsible, due to which demand for single-use plastic is reducing.

RK: Since you specialise in kraft and duplex, have you noticed any pent-up demand because of the plastic ban?
AG: The demand for paper is increasing but the demand for plastic is not reducing. Paper and plastic mills are growing because the market demand is increasing. If you order a product from an eCommerce site you get the delivery in a plastic wrap. You can minimise but cannot leave the use of plastic.

RK: Talking about eCommerce, which products are seeing traction, fluting, test liners or recycled KLB and why?
AG: I would like to answer it like this. Some customers don’t need standard products. For them, quality is not an issue. You’ll see most of them use raw materials or products of lower grade. It depends on the product range.

RK: To use recycled or not?
AG: Well, if you are buying good first-hand products, it will cost you more but it will boost your quality. Whereas if you buy a recycled product, it will be low in cost. It varies from brand to brand. People using lower-grade paper quality are increasing, which is the main reason our quality standards are declining.

RK: So how does one compete?
AG: To compare with the world market, we have to improve our standardisation. There’s no other way.