JK PAPER LTD

INDUSTRIAL PROFILE

Brief description of Paper Industry

Paper industry is an agro-based industry and it includes enterprises that make pulp, paper,
paperboard, and other cellulose-based goods from wood as a raw material. This industry
encompasses a wide range of activities, including the harvesting of trees, pulping,
papermaking, and the production of finished paper products such as packaging materials,
printing paper, tissues, and other specialty papers.

In India the Soft wood is the principal raw material used for making paper especially
newsprint and high class printing papers. With rise in population and broadening of
education the demand for paper has been constantly escalated. Owing to very narrow forest
resources wood pulp is in a shortage. As soft woods grow in temperate climate India is in
short supply of such woods. Thus, in such circumstances the Bamboo became the major
raw materials for the manufacture of paper in the country as it grows very quickly even
after cutting.

The paper industry has undergone significant technological advancements over the years,
with the development of new processes and equipment that have led to increased efficiency
and productivity. However, the industry has also faced criticism for its impact on the
environment, particularly due to the harvesting of trees and the use of chemicals in the
pulping process.

To address these concerns, the paper industry has implemented various sustainability
initiatives, such as sustainable forestry practices, the use of recycled paper, and the
adoption of cleaner production processes. The industry has also embraced digitalization
and innovation, with the development of new paper-based products such as e-books and
smart packaging.

Overall, the paper industry plays a critical role in the global economy and will continue to
do so in the future, as it provides essential products for a wide range of industries and
applications.

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PESTEL Analysis

A PESTLE analysis is a tool used to gain a macro picture of an industry environment.

PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental
factors. It allows a company to form an impression of the factors that might impact a new
business or industry.

PESTEL analysis of the paper industry is as follows:

Political factors:

Government regulations and policies can have a significant impact on the paper industry.
For instance, regulations around environmental protection, health and safety, and taxation
can affect the industry’s operations. The paper industry is subject to a range of regulations
around sustainability and environmental protection. For example, in some countries, there
are laws that require companies to use recycled paper or paper from sustainable sources.
The trade policies of different countries can also affect the paper industry. Tariffs,
import/export regulations, and currency fluctuations can all impact the industry.

Economic factors:

The demand for paper products is affected by economic conditions. During a recession,
companies and consumers may reduce their use of paper products to save money. The
availability and cost of raw materials like wood pulp can also impact the industry. For
instance, a shortage of wood pulp can lead to higher prices for paper products. Economic
factors can also affect the cost of energy, which can impact the industry’s operations.

Social factors:

Societal attitudes towards sustainability and environmental protection can impact the paper
industry. Consumers are increasingly concerned about the environmental impact of paper
products, and may choose alternatives like digital media. Changes in lifestyle and work
habits can also affect the industry. For instance, the rise of remote work could lead to a
decrease in demand for paper products in the office.

Technological factors:

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Technological advancements have impacted the paper industry. Digital media has reduced
demand for print media, and advances in manufacturing technology have made production
more efficient. Automation and robotics are becoming increasingly common in the
industry, which is leading to increased productivity and reduced costs.

Environmental factors:

Environmental concerns are a major issue for the paper industry. The industry is subject to
regulations around waste management, emissions, and the use of chemicals in the
manufacturing process. Sourcing raw materials sustainably is important for the industry.
Companies that use sustainable wood pulp may have a competitive advantage.

Legal factors:

The paper industry is subject to a range of legal regulations. Intellectual property laws can
impact the publishing industry, and health and safety regulations affect the manufacturing
process. Environmental regulations are also an important legal factor. The industry must
comply with laws around waste management, emissions, and sustainable sourcing of raw
materials.

Growth and opportunity in industry sector

Paper Industry in India is exhibiting one of the fastest growths being witnessed anywhere
in the world and is most likely to continue this trajectory in the years to come as Indian
economy is better placed to weather the storm caused by global upheavals - Indian Paper
Manufacturers Association (IPMA).

After the disruption caused by the Covid- 19 pandemic, when paper consumption
nosedived, the demand has made a robust recovery in the ongoing financial year and has
overtaken pre-pandemic levels. In view of the large potential for growth aided by a growing
economy, paper industry is expected to continue to grow in sync with the economic growth
recording 6-8% growth per annum.

For making the industry world-class, raw material security is a must. Currently the cost of
procuring wood in India is upwards of $100 per tone while the same in other competing

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countries that have advanced paper manufacturing is $60 per tone. Being competitive is a
prerequisite to becoming world class and for that raw material security needs to be
strengthened.

Industry driven agroforestry being undertaken in collaboration with more than five lakh
farmers needs to be augmented to a large extent to meet the current and future needs of the
industry. For pulpwood. So far, with the efforts of wood-based paper mills, 12 lakh hectares
has been brought under agro / farm forestry across the country, with significant
environmental benefits.

Substantial amounts have been spent by the paper industry on plantation R&D leading to
development of high-quality tree clonal saplings which are disease and drought resistant
and can be grown in a variety of agro climatic conditions. Technical extension services are
being imparted to the farmers over a gestation period of 4-5 years to improve agro/farm
forestry output. This has generated significant employment opportunities for the local
community, especially in the rural areas, apart from enhancing their incomes.

Share of Paper industry in total

Globally

The global market share of the paper industry varies depending on the specific product
segment and region. According to a report by Grand View Research published in 2021, the
global market size for the pulp and paper industry was valued at USD 365.8 billion in 2020.

In terms of product segments, the report segmented the market into three categories:
packaging paper, printing and writing paper, and others. The packaging paper segment
accounted for the largest market share in 2020, at around 47%, followed by printing and
writing paper at approximately 33%, and the others segment at around 20%.

Geographically, Asia Pacific was the largest regional market for the pulp and paper
industry, accounting for over 45% of the global market share in 2020. Europe and North
America followed closely behind with market shares of around 25% and 20%, respectively.

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In India

According to a report by the Federation of Indian Chambers of Commerce and Industry

(FICCI), the Indian paper industry is the 15th largest paper producer in the world and
accounts for 3.7% of the global production.

In terms of market share, the Indian paper industry has been growing steadily over the past
few years. According to the same FICCI report, the Indian paper industry had a market size
of around USD 8.9 billion in 2020, and it is projected to reach USD 13.5 billion by 2025,
growing at a CAGR of 8.7%.

In terms of market segmentation, the packaging paper segment holds the largest share in
the Indian paper industry, accounting for approximately 55% of the total production.
Printing and writing paper follows, accounting for around 30%, while the remaining 15%
is shared among other segments such as tissue paper, newsprint, and specialty papers.

COMPANY PROFILE

Name & Location of the Company

• Name: JK Paper Limited

• Location: P.O. Central Pulp Mills (Unit CPM) – Ukai Road, Fort Songadh, Dist.
Tapi 394660, Gujarat - India

Name & Location of other branches

Global headquarters for JK Paper

• Location: Nehru House 3rd Floor, 4 Bahadur Shah Zafar Marg, New Delhi – 110002

Second branche of JK Paper

• Name: JK Paper Mills

• Location: JK Paper Mills (Unit JKPM), Jaykaypur, Rayagada – 765017, Orissa –
India

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Third branch of JK Paper

• Name: Sirpur Paper Mills Ltd,

• Location: The Sirpur Paper Mills Limited (SPML) Sirpur, Kaghaznagar,
Komarambheem, Adilabad 504299, Telangana - India

Year of Establishment

In the year 1962, Unit JKPM at Rayagada (Odhisa) was established.

Brief history

J K Paper Ltd (formerly known as Central Pulp Mills), a member of HS Singhania Group
is originally promoted by Parkhe Group of Pune to manufacture Paper and Paper products.

• JK Paper ‘s legacy goes back to 1938 with setting up of Straw Products ltd in
Bhopal with a capacity of 3,600 TPA.
• JK Paper Ltd. Was founded in 1960 as Central Pulp Mills by the Singhania family,
who were prominent industrialists in India.
• In 1975, the company was renamed JK Paper Mills, and it went public with an
initial public offering (IPO) in 1984.
• Over the years, JK Paper expanded its operations and became a major player in the
Indian paper industry. In 1992, the company acquired the Raymond Woollen Mills
in Gujarat, which helped it expand its production capacity.
• In 1996, the company commissioned a new paper machine at its Rayagada plant in
Odisha, which increased its capacity to over 100,000 tons per year.
• In 2001, the company set up a new plant in Orissa, which further increased its
production capacity to 200,000 tons per year.
• In 2006, JK Paper acquired Sirpur Paper Mills in Andhra Pradesh, which gave it
access to new markets and expanded its product portfolio.

In recent years, JK Paper has continued to invest in technology and innovation to improve
its products and processes. The company has also been recognized for its commitment to
sustainability and social responsibility.

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Today, JK Paper is one of the largest paper companies in India, with a production capacity
of over 500,000 tons per year. It produces a wide range of paper products, including coated
and uncoated papers, packaging boards, and specialty papers, which are used in a variety
of industries such as printing, publishing, packaging, and more.

Vision Statement

Vision

• To be a dynamic benchmark and leader in the Indian paper industry.

Mission Statement and Value Statement

Mission

• To be a World Class digitally enabled company, creating Shareholder Value by

achieving growth and leadership through: JK Brand Equity, Customer Obsession,
Technological Innovation, Cost Competitiveness, Environmental and Social Care.

Core Value

• Integrity including intellectual honesty, openness, fairness and trust.

• Commitment to Excellence.
• Caring for people.

PURCHASE DEPARTMENT

P2P Cycle

The purchase-to-payment (P2P) cycle, also known as the procure-to-pay cycle, is the
process that organizations follow to acquire goods or services from external suppliers. It
encompasses all the steps involved, starting from the initial identification of the need for a
product or service, through the procurement process, and ending with the payment to the
supplier.

Steps followed in P2P Cycle are as follows :-

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1. Identify Need: The process begins when a department or individual identifies a need
for a particular product or service. This could be anything from office supplies to
equipment or raw materials.
2. Supplier search: Once the need is been identified, then the supplier is been search
from where we can bring the required equipment or raw materials.
3. Comparison sheet of Vendors: When we have the list of suppliers we need to
compare them so that we can know who is offering the best deal.
4. Negotiation: We need to negotiate with suppliers so that we can get the equipment
or raw materials at best price and we can have the best deal.
5. Supplier Selection: The procurement department evaluates potential suppliers
based on factors like price, quality, delivery time, and supplier reputation. They
may request quotes or proposals from multiple suppliers to compare and select the
most suitable one.
6. Placing Order: After selecting a supplier, a purchase order is generated. The PO
includes detailed information about the requested goods or services, agreed-upon
pricing, delivery terms, and any other terms and conditions. The PO serves as a
legally binding document between the buyer and the supplier.
7. Procurement of Goods: The procurement of goods refers to the process of acquiring
goods or products from external suppliers to meet the needs of an organization.
8. Quality Check: Quality checks are an essential part of the procurement process to
ensure that the goods being acquired meet the required standards and specifications.
These checks help organizations verify the quality, functionality, and conformity
of the purchased goods.
9. Approval by Finance Department: Approval by the finance department is an
important step in the procurement process, particularly when it comes to financial
aspects such as budget allocation, cost analysis, and ensuring compliance with
financial policies and procedures.
10. Vendor Payment: Vendor payment refers to the process of disbursing funds to
suppliers or vendors for the goods or services provided to an organization. It is a
crucial step in the procurement cycle and involves various activities to ensure
accurate and timely payment.

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STORE DEPARTMENT
The store department, also known as the storeroom or storehouse, is a functional area within
an organization that is responsible for managing and controlling inventory and stock of
goods or materials. The primary purpose of the store department is to ensure the availability
of the necessary items to support the organization’s operations.

The store department is responsible for managing the organization’s inventory of goods or
materials. This involves activities such as receiving, storing, tracking, and issuing items as
per the organization’s needs. The department maintains accurate records of stock levels,
monitors inventory turnover, and ensures appropriate storage conditions for different types
of items.

When goods are received from suppliers, the store department receives and inspects them.
They verify the quantity, quality, and condition of the received items against the purchase
orders, delivery notes, or packing slips. Any discrepancies or damages are documented and
communicated to the appropriate departments.

The store department ensures that the received items are properly stored, organized, and
secured. They establish appropriate storage systems, such as bin locations, shelves, or
racks, to optimize space utilization and facilitate easy access to items. They may also
implement labeling or barcode systems to identify and track items accurately.

The store department monitors the stock levels of various items and initiates the
replenishment process when inventory reaches predefined reorder points or minimum
thresholds. They communicate with the procurement department or suppliers to place
orders for restocking the inventory to avoid stockouts or disruptions in operations.

When other departments or individuals require items from the store, the store department
is responsible for issuing them. They receive the requests, verify the availability of the
requested items, and ensure proper documentation and authorization for the issuance. The
store department maintains control over the distribution of items, ensuring that they are
provided to the authorized personnel or departments.

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The store department conducts regular inventory counts and audits to reconcile physical
stock with the recorded quantities. They verify the accuracy of inventory records, identify
discrepancies, and investigate any variances. The department may also implement
inventory control measures, such as cycle counting or periodic stocktaking, to maintain
accuracy and prevent inventory shrinkage or losses.

The store department manages the disposal of obsolete, damaged, or surplus stock. They
follow proper procedures for disposing of items, which may involve recycling, donation,
or proper disposal methods in compliance with environmental regulations. The department
ensures that appropriate documentation and approvals are obtained for stock disposal
activities.

The store department maintains accurate records and documentation related to inventory
transactions, including goods receipts, issuances, returns, and stock adjustments. They
generate reports on stock levels, consumption patterns, stock valuation, and other relevant
inventory-related information. These reports provide insights for decision-making,
forecasting, and improving inventory management practices.

The store department plays a critical role in managing and controlling inventory, ensuring
the availability of goods or materials when needed while minimizing costs and waste.
Effective store management supports efficient operations, improves inventory accuracy,
and contributes to overall organizational efficiency.

SALES DEPARTMENT
Selling goods or services for a business is the responsibility of the sales department. The
division includes a sales team that cooperates to close deals, boost profits, and cultivate
and maintain connections with clients to promote brand loyalty and repeat business.

Unlike other departments, the sales department, which is possibly the busiest and most
vibrant in the business, employs specific tactics to give the required motivation. These two
departments—which are sometimes mistaken for the marketing department—operate
separately. The workers in the sales and marketing departments have integrated working
relationships, yet their job responsibilities occasionally diverge.

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Functions of Sales Department:

1. Production planning: A critical step in the manufacturing process is production

planning, which entails the creation and application of policies and procedures to
guarantee the effective use of resources and the prompt delivery of goods or
services. It includes a variety of actions aimed at enhancing output and streamlining
the manufacturing process.
• Forecasting: Predicting future production needs by analysing historical data, market
trends, and consumer demand. This aids in figuring out how many and what kind
of goods need to be produced.
• Capacity planning: Analysing the manufacturing facility’s capacity for production
while taking into account many elements including the resources, machinery,
labour, and time that are at their disposal. This evaluation assists in determining
whether the production capacity is adequate to satisfy the anticipated demand.
• Material Planning: Estimating the raw materials, parts, and supplies required for
production is known as material planning. This entails making sure there is a
sufficient supply of supplies, keeping accurate inventory levels, and working with
suppliers.
• Scheduling: Creating a thorough plan or timetable for each production activity that
includes the start and end dates, the resources needed, and the dependencies
between activities is known as scheduling. This entails organising different
production tasks into a coherent whole, assigning resources, and scheduling the
numerous production processes.
• Resource allocation: Assigning and distributing resources, such as labour, tools,
machinery, and equipment, to various industrial activities. This entails maximising
the use of the resources that are already available and making sure they are used
effectively throughout the production process.
• Monitoring and tracking: Consistently keeping an eye on how production
operations are going, keeping tabs on how they compare to the schedule that has
been set, and making the necessary adjustments to hit production targets. This

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entails gathering and analysing production data, locating problems or bottlenecks,

and taking appropriate corrective action as needed.
2. Warehousing: The act of warehousing involves keeping supplies and items in a
special place called a warehouse. Businesses keep inventory, raw materials,
finished goods, and other supplies in warehouses. They act as the main hub for the
supply chain’s storage, planning, and distribution of commodities. Providing
businesses with a safe and effective storage option is the main goal of warehousing.
Here are some essential features and roles of warehousing:
• Storage: Warehouses offer ample space for storing goods in an organized manner.
They often have shelves, racks, and storage systems designed to maximize the use
of available space.
• Inventory Management: Warehouses play a vital role in inventory management.
They keep track of stock levels, perform regular audits, and maintain accurate
records of goods coming in and going out. This helps businesses optimize their
inventory levels, reduce stockouts, and streamline order fulfillment.
• Risk Mitigation: Warehousing helps protect goods from damage, theft, and other
risks. Warehouses are typically equipped with security measures, such as
surveillance systems and controlled access, to ensure the safety of stored items.
They may also provide insurance coverage to mitigate potential losses.
3. Logistics and Distribution: Planning, implementing, and controlling the efficient and
effective flow of goods, services, and information from the point of origin to the
point of consumption are all included in the processes of logistics and distribution.
These procedures are crucial to supply chain management and are required for
companies to offer their clients timely delivery of goods and services. Here are
some essential elements and factors to remember when it comes to logistics and
distribution:
• Transportation: Transporting things from one site to another entails choosing the
best mode of transportation (such as road, rail, air, or water). Transportation choices
are influenced by variables like distance, speed, cost, and the type of the
commodities.

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• Inventory management: Management of inventory comprises tasks including

purchasing, storing, and keeping track of stock levels. Reduced carrying costs,
fewer stockouts, and situations with excess inventory are all benefits of excellent
inventory management.
• Order Processing: Receiving and processing orders from customers, including
order entry, order verification, picking, packing, and shipping, is known as order
processing. Order processing can be made more efficient to increase accuracy,
reduce order cycle times, and satisfy customers.
• Reverse logistics: This is the term used to describe the procedures used to manage
product returns, repairs, replacements, or recycling. Reverse logistics seeks to
maximise product recovery value while lowering waste and improving customer
service.

FINISHING HOUSE
Today JK Paper has 16-17% of Market Share in India.

Paper is been divided into two categories:

1. Paper
2. Board

Total demand of it is 60 lakh tonnes. Two kinds of materials is been produced:

1. Vergin: It’s ₹85/kg. Total demand for this is 20 lakh tonnes.

2. Recycle: It’s ₹50/kg. Total demand for this is 40 lakh tonnes.

Production Process :-

1. Raw material

Wood is the raw material which is been used to produce paper. JK Paper is not harming the
environment for this. They have 85% of raw material which is self generated. The farmers
who have unused land are been provided with the seeds of trees and when the trees are

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been produced, JK purchases it from them. This way the farmers also have a permanent
source of earning. And the seeds which are been provided by the JK are been grown at
some distance so the distance in-between can be used by the farmers to produce their own
crops.

The paper industry relies heavily on the cultivation of certain tree species, such as
hardwood and softwood trees, for the production of wood pulp, which is a key raw material
used in paper manufacturing. In the context of tree cultivation for the paper industry, plant
breeding and genetic improvement programs are conducted to develop tree varieties that
are more suitable for commercial forestry and pulp production. These programs aim to
create hybrid tree varieties with desirable traits such as fast growth, high yield, straight and
uniform trunks, disease resistance, and optimal wood characteristics for pulp production.

The objective of these breeding programs is to enhance the productivity and quality of the
trees grown for pulpwood. By developing hybrid tree varieties with improved traits, the
paper industry can achieve higher yields of wood fiber per unit area and potentially reduce
the time required for trees to reach maturity.

2. Chipper House:

Building where wood chips are produced from logs or other raw materials. The process
typically involves using a chipper machine to break down the logs into smaller wood chips
that can be further processed for various purposes, including pulp and paper production.
Chipper houses are essential components of pulp and paper mills or wood processing
facilities. The wood chips produced in the chipper house serve as feedstock for various
processes, such as pulping, where the wood fibers are separated and used to make paper or
other paper-based products.

3. Cleaning:

After the chipping process in the paper industry, the next step is typically the cleaning of
the wood chips. This step is important to remove impurities and unwanted materials from
the chips before further processing.

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4. Boiling:

This step involves the treatment of wood chips with chemicals in a process called pulping.
The main purpose of boiling is to break down the lignin, a natural adhesive substance in
wood, and separate it from the cellulose fibers, which will be used to make paper.

5. Fiber:

The next step is typically the separation and refining of the fibers from the cooked pulp.
This step is crucial for obtaining high-quality pulp fibers that can be used to produce paper.

6. Machine:

The next step in the papermaking process after fiber preparation is the paper machine. The
paper machine is a complex and large-scale system that forms, dries, and processes the
fibers into a continuous sheet of paper. The machine consists of several sections and
processes.

7. Thickness of the paper:

The thickness of paper is typically measured in terms of its “basis weight” or “grammage.”
Basis weight refers to the weight of a specific area of paper, usually expressed in pounds
per 1,000 square feet (lb/MSF) or grams per square meter (gsm).

The thickness of paper can be influenced by the flow of the papermaking process. The flow
of pulp suspension through the paper machine and subsequent processing steps can affect
the formation and consolidation of fibers, ultimately impacting the final thickness of the
paper.

8. Steam:

Steam plays a significant role in various stages of the papermaking process. It is utilized
for several purposes, including heating and drying.

9. Paint:

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It refer to the application of coatings or surface treatments on paper to enhance its properties
or appearance. Coatings are often applied to improve the paper’s smoothness, brightness,
printability, and other desired characteristics.

10. Jumbo:

Jumbo refer to large rolls of paper produced on a paper machine. Jumbo rolls are typically
the intermediate product that undergoes further processing or conversion to create finished
paper products.

Process after Jumbo:

• Jumbo rolls
• Child rill

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