JK Paper Limited An Industry benchmark with Power Packed Brands
Pulp & Paper Industry of India
Presentation
Presenter : Sandeep Bhalla
7th Nov, 2016
Not to be shared any part or full presentation without permission of J K Paper Ltd.
Global and Indian Pulp & Paper Industry Outlook
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Global Market Change in Paper Market Dynamics
World Paper & Paperboard Demand Growth 1995-2014
Source: Poyry
Transition from graphic papers to packaging and from ‘the West’ to ‘the East’
283
183 175
1115 125
215
400
325
Increase - 100 to 225
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Global Market India is the Fastest Growing Paper Market Globally
World Paper Market Outlook by Region up to 2030
Source: Poyry
Paper market growth in India is foreseen to reach 4.1%/a through 2030
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Global Market Indian Per Capita Consumption is Way below World Average
Source: PPI
224 218
159 156
75 66
47 30 29
12 8
55
150
100
50
0
200
Wo r l d Pe r Capita C o n s u m p t io n
250
(Paper + Board) in Kgs -2014
11
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Economic and income growth, population growth (changing demographics – urbanization, young population), rapidly changing lifestyles, improving living standards, etc.
Greater emphasis on education and literacy by the Government
Growth in organized retail and demand for better quality paper are the major drivers for writing and printing paper
Demand for better quality packaging of FMCG products marketed through organized retail, rising healthcare spends, over-the-counter medicines and increasing preference for ready-to-eat foods are the key demand drivers for paperboard
Make in India will further boost demand for Packaging
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Indian Paper Market Key Drivers for Growth
Indian Market
Packaging Driving the Growth Growth of middle class population and development of retail are foreseen to
support packaging board demand growth in India
Indian Paper and Paperboard Demand up to 2030
Source: Poyry
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14.0
26.4
5.7
Indian Market
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Growth of Per Capita Paper Consumption in India In spite of the good growth in foreseeable future, per capita consumption of paper
and paperboard in India will remain relatively low by global standards
Indian Paper consumption per capita up to 2030
1. The growth follows the expected increase in GDP per capita from the current 1700 USD to 4000 USD, assuming that especially in graphic paper grades the income elasticity of demand will be below 1.00 due to the digitalisation.
2. Global average stagnates due to the declining graphic paper consumption, and sluggish demand growth in developed markets.
3. In China, the growth of per capita consumption slows down
-Growth from 30kg to 75kg through 2000-15; Increase up to 92kg by 2030.
4. Decline of per capita consumption continues in developed regions – the USA in particular.
-Decline from 340kg to 224kg through 2000- 15; Further decline down to 170kg by 2030
Source: Poyry
1.1
2.4
4.9
5
.9
6.8
7
.5 1
0.1
1
1.2
14
.1
15
.1
17
.0
18
.5
24
.5
26
.4
-
5.0
10.0
15.0
20.0
25.0
30.0 1
98
0-8
1
19
90
-91
20
00
-01
20
05
-06
20
10
-11
20
15
-16
20
21
-22
20
29
-30
Mill
ion
To
ns
Production (Million Tons) Consumption (Million Tons)
Indian Market Demand & Supply – Present and Outlook
Source – Poyry, Report of Working Group on Pulp and Paper Sector
1. Estimated turnover – Rs 50,000 Cr (USD 8 Billion).
2. Capacity – 17.0 Miilion TPA (Over 700 mills)
3. Employment – Direct 0.5 Million, Indirect 15 Million
4. Exchequer Contri. – Rs. 3000 Cr (USD 450 Million)
5. Investment made in last 5 years by paper industry – Over Rs 20,000 Cr (USD 3 Billion)
6. Investment required by 2030 for new capacities - Rs 50,000 Cr (USD 8 Billion).
Composition of Paper Industry by Raw Material Source
2015
Wood Based 31%
Agri Based 22%
Recycled Fibre Based 47%
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Consumption CAGR 1980-81 to 2015-16
8.2%
Consumption CAGR 2015-16 to 2029-30
4.1%
Indian Pulp & Paper Industry - Challenges
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Challenges of Indian Pulp & Paper Industry
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1. High Fibre Cost
2. Lower Economies of Scale & Comparatively Old
Technology
3. High Energy Cost
4. Zero duty imports from ASEAN
High Fibre Cost in India Delivered Wood Cost – Comparison of Countries
45
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62
74
78
82
92
10
0
10
5 1
30
16
5 200
180
160
140
120
100
80
60
40
20
0
Ru
ssia
Bra
zil
Thai
lan
d
Sou
ther
n U
SA
Ch
ile
Fin
lan
d
Ind
on
esia
Vie
tnam
Au
stra
lia
Ind
ia
US
$ p
er
dry
to
n
•Prices in India are higher than most other countries
•All countries except India have favorable policies for plantations
Note : Transport distance is 50-200 Km Globally, 150-2000 Km in India Source – Wood resource intl.; McKinsey Analysis Q4 2011, Global Tree Farm Economics Review 2012
During FY 16-17, Current wood requirement of the industry is 23.5 Mn tons, out of which 10.2 Mn Ton is for paper Industry. Expected availability is 19.1 Mn tons (gap of 4.4 Mn Tons). Gap will reduce to 2.2 Mn ton by 2018-19.
Indian Pulp & Paper Industry - Performance Trend
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Green Rating Project of the Centre for Science & Environment Progress made by Industry (1/7)
Note : Centre for Science and Environment (CSE) is a not-for-profit public interest research and advocacy organisation based in New Delhi
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Green Rating Project of the Centre for Science & Environment Progress made by Industry (2/7)
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Green Rating Project of the Centre for Science & Environment Progress made by Industry (3/7)
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Green Rating Project of the Centre for Science & Environment Progress made by Industry (4/7)
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Green Rating Project of the Centre for Science & Environment Progress made by Industry (5/7)
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Green Rating Project of the Centre for Science & Environment Progress made by Industry (6/7)
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Green Rating Project of the Centre for Science & Environment Progress made by Industry (7/7)
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JK Paper Limited and
Initiatives to Bridge the Technological Gaps
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JK Paper Ltd is one of the leading companies of JK Organisation – A prominent business house of India founded over 100 years ago
Tyre Cement
Agri Genetics
V-Belts- Oil Seals & Power Transmission Systems
Clinical Research
Hospital & Health services
USD 4 Billion
23 manufacturing plants
Present in 100 countries
More than 30,000 employees
Paper
Education
Dairy Products
Defence Electronics
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JK’S BRANDS ARE INDUSTRY BENCHMARKS IN RESPECTIVE PRODUCT CATEGORIES Plants with state of the art technology and minimal environmental impact
Panoramic view of the Unit JKPM (Orissa) -295,000 tpa)
Panoramic view of Unit : CPM (Surat, Gujarat) – 160,000 tpa
Copier Paper (Market Leader – Mkt. Share is 27%)
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Coated Paper Mkt. Share is 12%)
Packaging Board Mkt. Share is 11%)
Strategic Geographical Presence
• Strategic location
– JKPM located close to raw material sources
– CPM located close to large end customers & port
• Strong distribution reach
– 4 regional offices
– 14 warehouses
– 192 distributors
– over 4,000 dealers
UNIT : CPM
Pulp (tpa) 60,500
Paper (tpa) 55,000
Pkg. Boards (tpa) 90,000
Total Production Capacity Saleable Product : 455,000 tons per annum (tpa) Pulp : 275,500 tpa (BD)
UNIT : JKPM
Pulp (tpa)
Paper (tpa)
215,000
291,000
Combined strength of ~ 4800 employees
Product Mix Uncoated paper Coated Paper Packaging Board Saleable Pulp Total
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2,91,000 MT 55,000 MT 90,000 MT 19,000 MT
4,55,000 MT
78 Years Journey Of JK Paper Ltd.
1938
1962
1992
2005
2007
2013
First Integrated Pulp & Paper company in India & 3rd Paper Company in the World to get Award for TPM Excellence – First Category from JIPM
First Paper Mill to get ISO 9001 & ISO 14001. Also obtained OHSAS 18001
First to Invest in World class Pulp Mill (Fiber line from Metso) in India
First to Brand Copier Paper in Indian Market
First to introduce Surface-size wood free paper in India
Awarded FSC-COC certification in 2011
Golden Peacock Environment Management Award in 2013;
Ist Prize in National Energy Conservation Award 2015
Installed 1st Fine Paper Machine at Unit - JKPM (Odisha)
Started Manufacturing Straw Board at Bhopal with a capacity of 3,600 TPA
Acquired Unit - CPM in Gujarat
Installed Coating Plant at Unit - JKPM
Installed Premium Packaging Board Plant at Unit - CPM
Installed State of the art New Fiber Line & High Speed Paper Machine at Unit – JKPM (1,65,000 MT)
(Total Current Capacity 4,55,000 MT)
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JK Paper Ltd. – Optimising Economies of Scale & Introducing New Generation State of the Art Technology
Fibreline (215,000 TPA)
Paper Machine (165,000 TPA)
New Project at Unit : JKPM (Commissioned in Aug, 2013)
1. Addition of New Fibreline with
Continuous digester & ECF technology & stopped young old Fibreline
2. Addition of state of the Art Copier Machine - 4th of its kind in world
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Power Plant
A4 Cutting Line Robotic Palletizer
JK Paper Ltd. – Optimising Economies of Scale & Introducing New Generation State of the Art Technology
New Project at Unit : JKPM (Commissioned in Aug, 2013)
1. Installed new Power Plant with High
Pressure CFB & Recovery Boiler with New Turbines. Old boilers & TGs stopped.
2. Atomised converting lines with ASRS. Paper is not touched with hand till dispatch.
ASRS - WIP Reels ASRS – Finished Goods
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JK Paper (Unit – JKPM) Consumption –Utilities & Furnish /T Paper
13891368
13561369
1287
1211
1100
1150
1200
1250
1300
1350
1400
1450
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Power Kwh/T Paper
1.90 2.06
1.88
1.53
1.02
0.81
-
0.50
1.00
1.50
2.00
2.50
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Coal T/T Paper
86 8480
64
46 43
0
10
20
30
40
50
60
70
80
90
100
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Water M3/T Paper
861 856 858
833
777 775
720
740
760
780
800
820
840
860
880
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Furnish Kg Pulp/T paper
28
Power Consumption further reduced to 1131 during Q2 2115-16. The world
best for integrated Pulp & Paper mill producing UWF is around 1050
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Major Energy Conservation Schemes Implemented by JK Paper Ltd.
1. Firing of Petcoke in lime kiln along with efficient burner– 1st company in Pulp & Paper industry in India to install this technology
2. Reduction of frequency of TG from 50 Hz to 49.2 Hz.
3. Saving heat energy going into the cooling tower, Utilization of return condensate water of 85 0c into the Deaerator of LFB instead of DM water available at 50 oc.
4. Reduction in power by changing lighting transformer TAP position (reduction of voltage).
5. Replaced existing Screw & Reciprocating Compressors with Centralized Centrifugal Compressor System.
6. Reduction in cooling tower fan power consumption by decrease in blade angle & installed VFD.
7. Debottlenecking of various plants to increase productivity with almost similar energy consumption.
8. Optimization of steam extraction in turbine to save power.
9. Increase in power factor from 0.88 to 0.96 by installation of capacitors in different PCCs & MCCs.
10. Replacement of old Steam & Condensate system in Paper Machines with energy efficient system.
11. Installation of LEDs.
12. Installation of VFDs wherever valves are in throttled condition.
13. Replacement of energy inefficient motors with energy efficient motors.
14. Replacement of old equipments like pumps, vacuum pumps etc with energy efficient equipments.
15. Improved condensate Recovery from 70% to 82%.
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Major Energy Conservation Ideas Under Exploration by JK Paper Ltd.
1. Power savings by voltage regulation.
2. Reduction in heads of various pumps.
3. Installation of Micro TG in place of PRDS.
4. Collection of non condensable gases (DNCGs) to convert in to methanol and reduce FO consumption in lime kiln .
5. Unitization of equipments of old Plant i.e. Refiners, etc.
Thank you…
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