Nepa Limited

Interview with Mr.Rakesh Kumar Chokhani Chairman-cum-Managing Director, NEPA Mills

Nepa Limited, a pioneering force in India’s newsprint industry, is strategically located in Nepanagar, District Burhanpur, Madhya Pradesh. Established in January 1947, the company commenced commercial production in 1956 and has since played a vital role in shaping the nation’s paper industry. As a Central Public Sector Enterprise (CPSE) under the administrative control of the Ministry of Heavy Industries, Government of India, Nepa Limited continues to uphold its legacy while embracing modernization and sustainability.

In an exclusive interaction with Paper Desk Magazine, Mr. Rakesh Kumar Chokani, Chairman & Managing Director, and Mr. R. Alagesan, Chief General Manager, shared insights into the company’s journey, its strategic vision, and the future of the paper industry. Here are some key excerpts from the interview.

Paper Desk : Could you let us know the history of NEPA Mills?

Rakesh Kumar Chokhani : Nepa Ltd. (National Newsprint and Paper Mills Ltd.), one of India’s oldest paper mills, has a rich history:

• 1956 – Nepa began its commercial production in 1956 with Paper Machine No. I, manufactured by M/s Pussey & Jones, USA, with a capacity of 30,000 tons per annum (TPA). This milestone was marked by a dedication ceremony on April 26, 1956, led by India’s first Prime Minister, Pt. Jawaharlal Nehru.
• 1969 – Paper Machine No. II, built by Wartsila, Finland, was installed in 1969, adding 37,500 TPA to Nepa’s capacity.
• 1989 – Paper Machine No. I was renovated by M/s Beloit, UK, boosting its capacity from 30,000 TPA to 50,500 TPA. With this upgrade, the mill’s total installed capacity increased to 88,000 TPA.
• 2022 – Under the Revival and Mill Development Plan, Nepa renovated both paper machines, restarting commercial production in September 2022. This modernization raised the mill’s capacity to 100,000 TPA and widened its portfolio including writing and printing paper alongside its traditional products.

Nepa Ltd.’s advancements over the years reflect its commitment to growth and diversification in paper manufacturing.

PD : May we know NEPA’s Mission & Vision?

RK : Our mission is to meet customer requirements through the delivery of best-quality products, driven by continuous innovation and seamless integration across our operations. Vision: To become a prominent leader and major contributor in the Indian Paper Industry, ensuring the company’s viability and self-sustainability.

“One of our objectives is to adopt best business ethics in light of market scenario/culture to manage required volume & quality inward materials”

PD : What are all the type of papers NEPA manufactures?

Alagesan R : NEPA is producing Newsprint and Writing and Printing Papers.

PD : What kind of raw materials (such as recycled or wood wastes) do you use to produce your papers?

AR : Nepa is using Old ential market, Newspapers, Exercise Note Books, Books, Magazines, Office Waste Papers as raw materials.

PD : Do you produce odour-free papers and what technology do you use to control it?

AR : Yes, Nepa produces Odour free papers by making good quality of pulp from state of art De-inking Plant.

PD : What is the specialty or unique features of your newly launched paper?

RK : NEPA Ltd.’s Writing and Printing paper stands out for its strong physical properties and sustainable production. Made from recycled wastepaper using eco-friendly technologies, NEPA’s paper aligns with growing environmental priorities.

Targeting the lower market segments, NEPA aims to capture a significant share in this high-pot leveraging both the quality and sustainability of its product to attract environmentally conscious consumers seeking cost-effective solutions.

PD : Do you have the sufficient supply of raw materials from the market?

AR : The start of 2024 has presented significant challenges for India’s recovered paper sector. Key factors impacting the market include:

1.  Rising Freight Costs and Delays: Issues in the Red Sea region have driven up freight costs and prolonged lead times, complicating waste paper imports to India. As a result, the balance between shipping movement and pricing has become a critical factor for Indian paper manufacturers reliant on recovered paper.
2.  Supply Instability from the USA: In the U.S., newly opened high-capacity mills that utilize recovered paper have intensified domestic demand, reducing the availability of long-fiber paper for export. This shortage is impacting India’s access to key supplies from a traditionally reliable source.
3.  Global Geopolitical Tensions: Ongoing conflicts in West Asia, the Russia-Ukraine war, and Red Sea trade disruptions from attacks on vessels have added layers of instability to global supply chains, affecting India’s imports of recovered paper and other materials.

These combined challenges are pressuring Indian paper manufacturers to seek alternative strategies to manage supply reliability and cost-efficiency.

PD : Hope the paper price was fluctuated often earlier and how is the current pricing scenario in India for the paper, particularly for the products you produce?

RK : The cost of imported recovered fiber for India is likely to rise, influenced by ongoing supply chain disruptions, growing global demand, and currency fluctuations. However, predicting the exact price per ton remains challenging, given the market’s dynamic nature and the many variables at play. Key assumptions that could shape the price trajectory include:

1. Supply Chain Stability: The extent and duration of current disruptions—especially those involving key trade routes and geopolitical tensions—will play a major role.
2.  Demand Shifts: Rising demand in other regions could further tighten supply and drive prices up.
3. Government Policies: Changes in trade policies or import regulations may impact costs and availability.
4. Currency Exchange Rates: Fluctuations in currency exchange rates can directly influence the cost of imports, especially if the rupee weakens against major currencies.

   

For stakeholders in India’s paper industry, monitoring these variables closely and adopting flexible strategies is essential to manage the cost volatility of imported recovered fiber.

PD : The significance of quality control in a paper manufacturing company cannot be overstated. What measures do you implement to guarantee the quality of the products you produce?

Quality Control (QC) plays a pivotal role in ensuring the high standards of NEPA Ltd’s operations. The QC team undertakes a comprehensive process to maintain the integrity and quality of products at every stage:

a) Raw Material Testing: QC tests all raw materials and Chemicals against established norms and specifications. Only materials that pass these checks are approved for use, ensuring the foundation of high-quality production.

b) Continuous In-Process Checks: During production, QC conducts continuous, round-the-clock inspections of intermediate products. This step ensures that each stage meets the company’s quality standards, allowing for early detection and rectification of any issues.

c) Final Product Inspection: Before finished products are moved to the Sales Godown, QC performs a final inspection to confirm that all products are defect-free. This meticulous check ensures that customers receive only the highest quality items.

This rigorous QC process underpins Nepa Ltd’s ability to consistently deliver quality products, fostering trust and satisfaction among its customers.

PD : Could you explain us about your environment management policies?

RK : NEPA Ltd is committed to,

a) Protect the environment and continually improve environmental performance by implementing an environmental management system.

b) Comply with applicable environmental legislations, regulations, special and general conditions laid down by the statutory bodies time to time.

c) Check, reduce and control air pollution.

d) Strive to reduce, reuse, and recycle the wastes. (Zero Discharge)

e) Increase the competence of employees to reduce significant environmental impacts.

f) Conserve fuels, raw materials, water, and energy.

g) Maintain & develop thick green belt in and around the plant.

PD : Do you face challenges in Indian Market?

AR : The Indian paper industry is facing a tougher time and a constant and innovative approach is expected yield to ensure a sustained growth. Since the demand for the paper in India is still growing high & high there will be a better future for paper industry. The unstable conditions of the global newsprint market have not affected market demand except for the price increase in the raw material. The withdrawal of export from China, has created some space in the market which is expected to result in flourishment of local market.

There has been slow growth in newspaper dailies due to the rise of digital applications and electronic media platforms. Consumer generally tracks national news through TV and the emerging trend of media reaching to the urban area, the increase in the literacy rate, has seen the break in growth of Newsprint consumption in the rural part of India. Internally, the vernacular, startup edition are being found more popular in the recent times. Regional- local news through newspapers. But with the per capita income increase, massive urbanization and with the GDP growth increase, there is all likelihood of newsprint demand to uptick further. The current market conditions are characterized by sluggish demand, oversupply, and the availability of cheaper imports across various segments such as writing printing, packaging, newsprint, and specialty products. These factors are contributing to a downward pressure on prices in the domestic market. The decreased demand in the finished paper has prompted paper mills to lower their rates, leading to financial strain throughout the supply chain. This challenging situation appears likely to persist for some more time.

PD : How is the market demand now for writing & printing papers in India and International market?

RK : Writing & Printing segment is expected to grow at the rate of 4% and expected to continue in momentum. Key segments which are heavy users of WPP are the service industry, publishing houses and education sector. This segment is expected to have heavy growth once the economy restores normal pace in the post Covid-19 scenario.

This sector has direct co-relation with the rise in the Writing and Printing paper. Increased focus and higher budgetary allocations by Central and respective State Govts. on school education, pharmaceutical sector, Health, and family welfare sector, rise in number of centers of higher education, double digit growth in FMCG sector during FY 2021-22 approx. 27.9%, and e-Commerce sector expected to grow at a CAGR 27% up to FY 2026.

PD : Being a paper manufacturer, what is your suggestion to make the paper more sustainable?

AR : To enhance the sustainability of paper manufacturing, we recommend several key strategies like:

• Increase Use of Recycled Materials
• Adopt Eco-Friendly Pulping and Bleaching Techniques
• Implement Energy-Efficient Processes
• Optimize Water Usage
• Reduce and Manage Waste
• Focus on Sourcing Sustainable Fibers
• Enhance Product Design for Durability and Recyclability
• Engage in Consumer Education

By focusing on these areas, paper manufacturers can make substantial progress in reducing their environmental footprint and enhancing the sustainability of paper as a material.

PD : How Indian paper industry in growing and your fair idea on future of the paper industry in India?

RK : Growth in the Indian paper industry is inextricably linked to structural economic factors like population growth rate, transition in demography, improvements in literacy rates, higher spending on education by Govts and phenomenal growth in print and media industry. Given free access to domestic market industry is exposed to the international competition. Indian paper has also seen a paradigm shift in the demand pattern and consumer preferences. The increase in income level of middle-income group and phenomenal growth in higher education also professional tie ups with global universities has changed the mindset and behaviours of consumers with their preferences.