Ruchira Papers Limited has planned a capex of INR 42 crore for up gradation and modernization of existing unit
The current annual capacity of Indian paper industry is around 16 million tons across Writing & Printing Paper constituting to nearly 30% of the overall production, Paperboard and Kraft Paper dominating with 46% of the share and Newsprint with around 24% of the production share. The industry is registering a growth rate of over 7% with demand expected to grow with GDP.
Yash Ved of Newsbarons provides you the highlights of a media interaction, where Jatinder Singh, Chairman of Ruchira Papers Limited informed ‘The Company has planned a capex of Rs.42.00 crore for up gradation and modernization of existing unit’.
NB: Brief us on the Indian Paper Industry?
Jatinder Singh: India is the fastest growing paper market globally. The industry is growing at a rate of more that 7% and is expected to grow at over 5% per Annum. The domestic demand is expected to grow with the GDP. As far as export is concerned, India’s share of export of paper is very less. The total export during 2016-17 was less than One Million Tons.
The major portion of export was WPP. Yes, some demand of export of Kraft Paper has come in last month from China. There was some news of shutting down of some kraft paper mills there due to pollution. We have also exported around 1000 MT of paper there. But now it seems that they have started the units and the demand is no more there.
NB: What is your production capacity and market share in the Indian Paper Industry?
Jatinder Singh: The Company manufactured 116000 MT paper during the F.Y 2016-17. The Market share of the Company is around 1% of total Indian paper industry.
NB: How was the quarter as a whole?
Jatinder Singh: During the quarter, performance of the company was good, considering the fact that GST was rolled out at the beginning of this quarter. The company undertook overhauling of its power co-generation Plant, which lasted about 18 days affecting overall performance. We are very confident of meeting the year end targets for the performance of the Company and are hopeful that the coming quarters shall be better as the demand of paper is expected to increase.
NB: What are your fund raising plans?
Jatinder Singh:The company has planned a capex of INR 42 crore for up gradation and modernization of existing unit which will facilitate the company to introduce new range of value added products in its Kraft Paper unit and increase in Paper Machine speed from 640 meters per minute to 700 meters per minute in Writing and Printing Paper unit.
This modernization plan shall be implemented in January 2018 and company will start getting its benefits post first quarter of FY 19. This capex shall be funded by term loan of INR 27 crore and balance through internal accruals.
NB: What are your expansion plans?
Jatinder Singh: We have decided to setup a green field project in the state of Punjab. We are in the process of acquiring the land and have already submitted its application for Change of Land use with Punjab Government. The Board has constituted a Project Committee to study the cost of the project. They shall submit the report by end of current quarter and, post that; we shall be able to comment on the details of the project.
NB: What is your current debt?
Jatinder Singh: We have an outstanding term loan of INR 17.75 crore which was availed for de-bottlenecking done in March 2016. In addition to this, we have sanctioned working capital limits of INR 38.80 crores.
NB: What is your growth target for FY18?
Jatinder Singh: We are expecting 8-10% growth in top line and 20-25% growth in bottomline.
NB: What is your promoter holding?
Jatinder Singh: The promoters are presently holding 61.14% of total share capital of the Company.