Ruchira Papers Limited is engaged in the manufacturing of Kraft Paper and Writing & Printing Paper. Writing and Printing Paper is used for multiple purposes like printing and stationery etc. The company’s white writing & printing paper is used in the fabrication of note books and writing material; the coloured paper is used in the fabrication of spiral notebooks, wedding cards, shade cards, children’s colouring books, coloured copier paper and bill books.
Replying to IIFL, Jatinder Singh said, “We are of the opinion that GST will be a positive for our company and the paper industry as a whole.”
Can you give us an idea about Ruchira Paper’s product-wise revenue breakup?
We manufacture two products; Kraft Paper and Writing & Printing Paper. The production ratio of both products generally remains around 57:43 and the revenue mix remains around 39:61 for Kraft Paper and Writing and Printing Paper, respectively. There may be a slight variation within a limit of 1 to 2%. During the year 2016-17, the revenue of Kraft Paper was Rs 157.81 crore and for Writing & Printing Paper it was Rs 259.79 crore.
Following your recent plant shutdowns in South India, what's your views on the demand scenario for H1FY17?
Yes, obviously some production capacity has been reduced due to a shortage of water in South and it will have a marginal impact on supply. But that will not play a major role in the demand and supply gap and cannot be translated into substantial benefits.
What kind of approach do you have for company’s growth, organic or inorganic?
Currently, our main focus is on organic growth only. During the year 2015-16, we have done de-bottlenecking that as resulted in an increase of production capacity from 99,000 TPA to 1,28,000 TPA for both the Kraft Unit and Writing & Printing Unit. Out of which, we have produced 1,16,000 tons during the year 2016-17 and we are hopeful to reach full production i.e 12,80,000 tons, which comprises 73,000 tons for Kraft Paper and 55,000 tons for Writing and Printing Paper in FY2017-18.
Can you throw some light on Ruchira Papers’ strategic plans?
We believe in growth and this has resulted in an increase in production which was at 2310 TPA in 1983 to an expected 1,28,000 TPA in FY2017-18. Besides volume growth, now we are focused on the production of value-added products which can contribute to the top line as well as the bottom line of the company and we are hopeful that it will add more pace to our existing growth rate.
What are company’s financial forecasts for the upcoming fiscal years?
Our track record shows consistent growth and it will be maintained with a combination of an increase in volumes, as well as the introduction of new value-added products.
How will GST impact the paper and paper products sector and your company?
The rate of GST shall be 12% on Kraft Paper and Writing & Printing Paper. We are of the opinion that GST will be a positive for our company and the paper industry as a whole. Under GST, every registered person is entitled to take benefit of GST paid as ITC, whereas earlier, the amount of CST paid was part of expenditure. With the implementation of GST, the transactions will be more transparent.