Rainbow Papers Ltd Management Discussions.


Future of Indian paper industry is quite promising as the domestic demand is on the rise. Increasing population and literacy rate, growth in GDP, improvement in manufacturing sector and lifestyle of individuals are expected to account for the growth in the paper industry of India. Similar to global market, the growth in demand in India is largely led by consumer packaging paperboard segment. The size of the paper industry has grown from 13 million TPA in 2011-12 to 17 million TPA in 2017-18; it is expected to reach to 23 million TPA in 2021-22 by growing at 7% CAGR.

India has 17% of the worlds population yet accounts for only about 3% of the worlds production of paper and paperboard. The Paper Industry has witnessed a supply pressure on account of significant capacity addition & comparatively lesser growth in paper demand. Indian paper industry in capacity wise is the 15th largest among the world & provides direct & In-direct employment to nearly 1.3 million people. The paper industry in India is highly fragmented industry.

The change in Global Scenario resulting from China’s ban on import of waste paper and closure of substantial capacity in that country, has brought two sided benefits to Indian paper makers, especially for those who recycle waste paper, on account of lower waste paper prices as well as higher realization of newsprint, paper and paperboard.

India is set to emerge as the worlds fastest-growing major economy ahead of China, as per a recent report by the World Bank. The improvement in Indias economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, RBIs inflation focus supported by benign global commodity prices. According to a Goldman Sachs report released in September 2015, India could grow at a potential 8% on average between 2016 and 2020, powered by greater access to banking, technology adoption, urbanization and other structural reforms


Rainbow is engaged in sales of paper and paper products. The Company offers wide range of paper including Writing and Printing paper, Newsprint paper, Duplex Board, Coated Paper, Color Paper and Board, Crepe paper, Poster Paper, Cast coated paper, fluorescent paper. The products manufactured by your company are primarily used for industrial, packaging, stationery & text book purpose. The products have wide acceptability across the globe. Being located in Gujarat with 1600 km coastal line , Rainbow is one of best located paper manufacturing unit in the Country. Your

Company generates wealth out of waste by using recycled grades of waste paper as prime source of raw material & making 100% eco-friendly paper. Last year was not the good year for the company. Your Company has not been able to utilize available production capacity because of various reasons and accordingly the operations at the factory are adversely affected. Your Company making its best efforts for successful revival of its operations. Resolution Plan for revival of the Company is pending for final approval before the Hon’ble National Company Law Tribunal (NCLT). Once the plan is approved, your company would commence its operations and given such huge demand in the market your company would be able to revive in accelerated manner.


The key risk management practices include those relating to identifying key risks to our business objective, impact assessment, risk analysis, risk evaluation, risk reporting and disclosures, risk mitigation and monitoring, and integration with strategy and business planning.

Risk Identification and Impact assessment: Mechanisms for identification and prioritization of risks include risk survey, industry benchmarking, incident analysis, business risk environment scanning, and focused discussions.

Risk Evaluation: Risk evaluation is carried out to decide the significance of risks to the Company. Estimated risks are compared against the established risk criteria. This risk criteria include key focus areas namely: strategy growth, cost, talent, reputation, leadership and regulatory compliance.

Risk reporting and disclosures: Risks to the achievement of key business objectives, trend line of risk level, impact and mitigation actions are reported.

Risk Mitigation and Monitoring: Mitigation plans are finalized owners are identified and progress of mitigation actions are monitored and reviewed. Further, for those business, objectives, whose achievement is at risk, periodic reviews are conducted to deploy actions.

Integration with strategy and business planning: Identified risks to the business objectives in the near-term, medium-term and long-term are used as one of the key inputs for the development of strategy and annual business plan. Key strategic initiatives are identified to mitigate specific risks.



Your company is one of biggest paper mill in India in terms of installed production capacity of 359100 MTPA under the single roof. It is one of best located paper mill in India because of proximity to the port making cost of Import & Export much cheaper. Your company enjoys the advantage of manufacturing multiple products catering to the needs of various segments & believe in policy of sale and produce. Your company has well established market & purchase network.


Import policy affects the prices and availability of paper & paper product and accordingly the profitability. International demand of waste paper affect the waste paper price & accordingly the profitability.

Opportunities and Threats

For the Indian paper industry, strong economic growth has been accompanied by equally robust demand for paper. The demand drivers and growth triggers have come from a combination of factors:

• Rising level of national income;

• Growing per capita disposable income;

• Improving aspiration levels of the people;

• Expanding population;

• Widening spread of education and literacy throughout the country; and

• Increasing size of the service industry, higher level of industrial activity and corporate spending.

There is therefore enormous potential for the paper industry in the country. Yet, this is accompanied by serious challenges, primarily from rising raw material cost.

A major cost component of production is energy which has become a challenge for the manufacturers. The Government of India has withdrawn the core sector status hitherto enjoyed by the paper industry, which has made coal availability more challenging. Cost of coal is escalating and prospect of availability of quality coal is diminishing. This has escalated production costs of mills which are dependent on coal for generation of steam/power. Availability of power (quantity & quality), consistency in quality production and its costs add to the sensitivities of the industry, adversely impacting margins

As stated earlier that your Company is passing through Corporate Insolvency Resolution Process (CIRP) as initiated under Insolvency and Bankruptcy Code, 2016 and its resolution Plan is pending for approval before NCLT. Until the resolution plan is not approved the revival process of the Company cannot be initiated.

Until these constraints are overcome, paper manufacturers will find it difficult to compete with external threat.


Statements made in this report, particularly those which relate to Management Discussion and Analysis, describing the Company’s objectives, projections, estimates and expectations, may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results might differ from those either expressed or implied.

For behalf of the Suspended Board of Directors
Place : Ahmedabad R. D. Choudhary Ajay Goenka
Date : 14.08.2018 Resolution Professional Managing Director
Regd. No. IBBI/IPA-001/IP- DIN : 00139512