Cattle population surge poses challenge for paper industry’s wheat straw supply; SUP-Ban could drive double-digit growth

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Mr. Pavan Khaitan, Vice Chairman and Managing Director of Kuantum Papers, provided detailed insights into the company's strategic transformation and the evolving dynamics of the paper industry. From the shift in raw material sourcing to the impact of the single-use plastic ban, Mr. Khaitan shed light on Kuantum Papers' adaptability and growth prospects.

The Pulp and Paper Times:

Transformation from Agro to Agro-Wood Operations

Mr. Khaitan started by highlighting Kuantum Papers' significant transformation from being primarily agro-based to adopting a balanced approach of both agro and wood pulping. He revealed that the company now operates almost evenly, with 50% of its operations dedicated to agro pulping and the remaining 50% to wood pulping. Acknowledging the challenges this transformation presents, he emphasized the need for Kuantum Papers to diversify its raw material sourcing, now including wood.

In addressing the transition, Mr. Khaitan expressed optimism about wood sourcing, foreseeing it as a more accessible route due to prevalent social forestry programs. He pointed out successful implementations by industry leaders such as ITC and JK, citing Kuantum Papers' commitment to following a similar path.

Increasing Social Forestry Bandwidth

To secure a sustainable supply of wood, Mr. Khaitan outlined Kuantum Papers' efforts to increase its social forestry bandwidth, aiming to produce approximately 20 lakh saplings annually. The ambitious target is to escalate this number to one crore saplings within the next three to four years. He highlighted the farmers' active participation in this initiative, as it provides them with an alternative source of income. Mr. Khaitan noted the shifting cropping patterns in Punjab, incorporating wood alongside traditional agro sourcing.

Challenges and the Need for a Broader Perspective

As Kuantum Papers diversifies its operations, Mr. Khaitan emphasized the need for a broader perspective to navigate the evolving business environment. He compared the industry's increasing complexities to a 720-degree view, emphasizing the necessity to closely monitor various factors influencing the business, such as the rise in cattle head numbers affecting wheat straw availability.

He said, I was reading somewhere that in the last 40 years the cattle head numbers in our country have increased from 40 million to 457,000,000. And it's growing by the day. Now, obviously the wheat straw is one main stock feed for these animals on which the paper industry is also dependent. So we have to be careful on how this transformation happens and keep a close connect with the farmers and aggregators and people who have been suppliers to the company, and that's how you will be able to manage your supplies better in future.

Paper Industry's Boon: The Single-Use Plastic Ban

Mr. Khaitan addressed the second question regarding the ban on single-use plastics. He viewed this ban as a substantial opportunity for the paper industry. The prohibition has propelled Kuantum Papers to explore and invest in alternative applications, such as paper straws, cup stocks, and paper cups.

He highlighted the industry's foray into flexible packaging, where appropriate barrier coatings are applied to make paper suitable for food wrapping. Mr. Khaitan mentioned the collaboration with chemical companies, both Indian and global, to find viable solutions for creating barrier coatings conducive to food packaging.

Envisioning Double-Digit Growth Prospects

Mr. Khaitan concluded by expressing his optimism regarding the single-use plastic ban, considering it a significant boost for the paper industry. He anticipated that this opportunity, coupled with an already increasing demand, could propel the industry towards a double-digit growth prospect, marking a substantial leap in the market.

In summary, Mr. Pavan Khaitan's comprehensive insights portray Kuantum Papers as an agile player in the industry, strategically positioning itself to capitalize on evolving market trends and opportunities.

Web Title: Cattle Population Surge Poses Challenge for Paper Industry’s Wheat Straw Supply; SUP-Ban Could Drive Double-Digit Growth

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