Mondipatti village near Tiruchirappalli, has undergone a spectacular transformation: Tamil Nadu Newsprint and Papers Ltd (TNPL) has set up a 200,000 tonne state-of-the-art paperboard plant there.
With its social concerns, TNPL has created a lush green belt around the sophisticated paper board plant in rural Mondipatti. In less than two years the company has stabilised production and is geared to produce to full capacity. More interesting is the plan to set up a two lakh tonnes pulp mill.
TNPL pioneered large-scale production of newsprint and paper based on bagasse. Right from inception in the 1980s, the company has been maintaining output at high levels. TNPL is among the top three producers of paper and boards in India. During 2017-18 gross revenue stood at Rs 3125 crore. This despite the loss of production due to acute water shortage during February-July 2017.
TNPL has an installed capacity of 35.5MW wind farms that generated 515 lakh units of ‘green’ power during the year. It is the only company in the Indian paper industry to establish a cement plant to convert the mill wastes, lime sludge and fly ash into high-grade cement as part of its solid waste management system. During the year the company manufactured 2,27,947 mt of cement.
The company uses bagasse, hardwood and de-inked paper for producing pulp. TNPL’s genius lies in its ability to persuade sugar mills in Tamil Nadu to part with their bagasse. The elaborate system of collecting bagasse in huge quantities, storing and using these throughout the year has been a mammoth task performed so well.
Managing Director Sivashanmugaraja referred to the increasing demand for the company’s paperboards from a wide range of consumer product companies. He outlined plans to seize the opportunity of the ban on low-grade, non-recyclable plastics from January 2019, by producing paper carry bags in large volumes.
A measure of prudential financial management and profitability should be evident from keeping the equity share capital unchanged over a decade at Rs 69.38 crore. In this period reserves shot up from Rs 594.94 crore to Rs 1533.75 crore!
A report by V Sangita who visited TNPL’s Plant II at Mondipatti:
“In terms of machinery, layout, automation and productivity levels, the paper board plant is on par with international plants,” points out Kushal Pal Singh, Chief General Manager of the Board Plant. He is quick to add that an integrated pulp mill and board plant is the most viable model. The 23-year BILT veteran referred to a Rs1200 crore expansion plan that has been recently approved to set up a pulp mill targeted for completion in 2023 and further investments planned to add machinery to produce paper.
Rapid stabilisation of production, product quality…
P David Manickam, General Manager – Marketing,
pointed to TNPL having navigated the board segment and stabilising output facilely. “Paper production is easier in the sense that sizes are universal and standardised everywhere. On the other hand, board sizes are entirely customer-driven. For instance, think of Colgate
suddenly announcing a 50 gm extra promotion. The size of the packaging box size needs to increase too for the duration of the promotion! Hence, our production is dependent on what the customer wants at that particular time.” Despite these challenges, TNPL was successful in stabilising both production and product quality in a short span of about 2.5 years.
Third largest paper company…
TNPL produces 600,000 tonnes of printing paper and boards – comprising 400,000 tonnes of printing paper in the Karur plant (referred to as Unit I) and 200,000 tonnes of boards in the Mondipatti plant (Unit II). The addition of the second unit in 2016 enabled TNPL to become the third largest paper manufacturer in the country – after BILT and ITC. This unit currently makes folding box boards for pharmaceutical and other consumer products, gray backs, white backs, cup stock….
Succour to ‘Gaja’ cyclone victims…
Dr R Seenivasan, General Manager (Plantation) was on his way to Vedaranyam to meet with farmers who have been devastated by the Gaja cyclone in November. TNPL is buying back wood from these farmers on a massive scale.
“These are people who until recently were doing well, owning 50 and 100 acres of trees, earning Rs 40 lakh to Rs 45 lakh a year. But due to the cyclone, many of them have been reduced to paupers,” describes a sad Seenivasan. When local middlemen are exploiting these vulnerable farmers and offering them dirt cheap rates for their fallen trees, TNPL, with great social concerns, is giving them a much higher price.
Seenivasan personally knows the pains of planting and nursing these trees through their years of growth. The Mondipatti unit has more than 500 acres of trees, all nurtured by drip irrigation. The company sells saplings to farmers, at as low as Rs 2 per sapling .
“This helps us ensure availability of raw material, but at the same time provides training and employment for thousands,” says Seenivasan. Cumulatively 1,24,080 acres of land have been brought under TNPL’s farm forestry and captive plantations schemes, benefitting 24,179 farmers in 27 districts of Tamil Nadu. “We are primarily an agriculture company, and only then a paper company,” jokes Seenivasan.
Paper industry is a commodity business and is price-driven. Water scarcity has been a huge problem. Bagasse prices have increased and pulp prices have doubled in the past three years impacting raw material costs. TNPL exports paper to about 40 countries and the dollar appreciation has hit realisation, pointed out Sridhar Boominathan, Deputy General Manager – Corporate HR & Strategy.
India currently produces 14 million tonnes of paper and boards per year. While paper demand is growing at the rate of 4-6 per cent, order for packaging board is higher at 11 to 12 per cent. CGM Singh predicts that by 2025, demand will grow to about 20 mn tonnes from the present 14mn tonnes, and the industry will be shaped by greater automation, increasing demand for eco-friendly products, and better energy optimisation.