Shree Rama Newsprint Ltd Management Discussions.


There are about 750 – 800 paper mills (organized & unorganized sector) in the country with Installed capacity of 14 Million tonnes with the domestic demand for all varieties of paper in India is estimated at around 17 Million tonnes in FY 2017 which is 3% of global demand of 400 Million tonnes even though population of 121 crores as per 2011 census is 17% of world population.

Wood based industry accounts for 35% of production while waste paper and agri residue accounts for 45% & 20 % respectively. Capacity-wise industrial Paper accounts for about 52%, Printing & Writing Paper 29%, Speciality Paper 4% and Newsprint 15% of total production.

The demand writing & printing paper accounts for approx. 5 Million tonnes, packaging grades for approx. 8.8 Million tonnes and newsprint about 2.6 Million tonnes apart from specialty grade about 0.6 Million tones based on data for FY 2017

The estimated turnover of the industry is INR 60,000 crore approximately and its contribution to the exchequer is around INR 4,500 crore. The industry provides employment to more than 0.5 million people directly and 1.5 million people indirectly.

There are about 121 units manufacturing newsprint with installed capacity of 2.6 million tonnes in our country whereas demand of newsprint is estimated at around 2.50 Million tonnes in FY 2018-19 (production 1.10 Million tonnes – Imports 1.40 Million tonnes. The per capita consumption is about 2 kg and it is expected to grow in line with GDP growth which is projected to be 7 %

The global capacity is estimated to 23 million tonnes per annum [down from peak of 32 million tonnes per annum] with surplus capacity due decline in demand caused by trends in advertising, electronic data transmission and storage, and the Internet with adverse effects on the demand for traditional print media Neither the timing nor the extent of those trends can be predicted with certainty. The aging population and declining birth rate also affected demand of newsprint. This sector is to compete with, other forms of media and advertising and electronic data transmission and storage, such as television, electronic readers and websites which has reduced consumption of newsprint.

Some of the leading newsprint manufactures have either closed capacity or converted machines to produce LWC container board etc. The decline in newsprint worldwide is estimated to be 6 % in year 2018 and 8% in year 2017 with decline reported from Europe, Oceania, South Africa and North America.

The consumption of newsprint was 5 million tonnes in Europe 2.7 million tones in North America whereas it was 9.9 million tones in Asia and Oceania in year 2018 totaling to 17.1 million tons

The Ministry of Power, Government of India has notified unit-specific energy use norms for the paper industry vide Notification dated 30.03.2012 and the industry had to comply the same by the target year 2014-15. Non-compliance of the same leads to penalties whereas improvement over the norms is rewarded by issue of Energy Saving Certificates. The Company had reported improvements and was issued 5054 Energy Saving Certificates.


The low per capita consumption of paper/paperboard in the country is bound to increase with the growth in the GDP, rising income of middle class, increasing demand for computer stationery and spending by Government on education sector and ban on plastic packaging starting with Gutka manufacturing units. The consumption of newsprint is also expected to raise on lines of GDP growth irrespective of decline worldwide which also appears to have bottomed out.

The Import duty on paper & paper board for ASEAN countries has been reduced from 2.50% to 0% with effect from 01.01.2014 vide notification No.57/2013 dated 31.12.2013 which had implications in terms of cheaper imports being of 2.90 million tonnes April-Jan. 2018 . Newsprint is not subject to any import duty which continues to remain a threat to domestic industry. Newsprint is however subject to 5 % GST wef 1.7.2017 however this has also not helped in dumping of newsprint by overseas suppliers.

The company has swing facility on one of the machine to manufacturer writing & printing paper as per market conditions.

The industry imports waste paper for sustained production of newsprint and depreciation of rupee against US dollar may lead to increase in input cost.


The company is operating only in paper and newsprint segment hence segment wise reporting is not applicable


India is the fastest growing paper market in the world with expected CAGR of 6 to 7 % due to thrust on education, urbanization and growth in economy. Newsprint sector is also expected to grow in line with GDP growth.


The Company has derived almost 100 % of revenue from newsprint business in 2018-19 hence may be affected due to import of newsprint. Further absence of organized collection of waste paper and therefore reliance on imported waste paper may affect it with deprecation of rupee against US dollar. However, plant is located near to Haziraport which gives it advantage over competitors in the segment.


The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Company has engaged A.H. Jain & Co. Chartered Accountant, for Internal Audit and yearly audit programme is submitted to the audit committee of the Board. The audit reports are reviewed by the management and the Audit Committee of the Board from time to time. Implementation of SAP ERP has also strengthened the internal control systems of the company


This has been dealt with in the Directors Report.


The Company had entered into bipartite long term wage revision settlement with the recognized union on 11th July 2015 for period of 7 years from July 2013 to June 2020. The companys industrial relations are cordial. Your Directors acknowledge the support and co-opera on from employees at all levels.

The Company has drawn specific programme to improve the skills of the workers. Further, it is providing necessary training as part of TPM. There is continuous interaction among the Management, Union and Labour for improving the knowledge and training of the workers.

The Company employs 394 people as on 31.3.2019 as against 379 people employed as on 31.3.2018.


The statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic demand supply conditions, finished goods prices, raw material cost and availability, changes in Government regulations, tax regimes, economic developments within India and other factors such as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Date: 30.05.2019 P. K. MUNDRA
Place: Ahmedabad President (Finance), Chief Financial Officer & Company Secretary