Financial Daily from THE HINDU group of publications
Sunday, Oct 02, 2005
Financial Daily from THE HINDU group of publications Sunday, Oct 02, 2005 |
|
|
|
|
|
|
|
Corporate
-
Outlook JK Paper bullish about high growth segments Our Bureau
Chennai , Oct. 1 JK Paper Ltd is keen to establish itself in the high growth segments of the paper and boards industry. The company has a significant presence in high-value branded copier paper and coated paper into which it forayed in July. It is now setting up a Rs 235-crore packaging board unit in Gujarat. The Managing Director, Mr Harsh Pati Singhania, said the coated packaging board unit would start production late in 2006. This will put JK Paper products in high growth segments such as branded copier paper, coated paper and high-end packaging boards. These segments are growing at 15-20 per cent against the 5-6 per cent for the entire paper industry. Explaining the company's decision to get into packaging board, a diversification for a printing and writing paper manufacturer, Mr Singhania said high-end coated packaging boards were needed for the pharma, food products and liquor industries which were in a buoyant phase. The packaging products for this segment are growing at over 15 per cent. As for the investments, Mr Singhania said over Rs 140 crore would be through loan and the balance in the form of equity, essentially an internal generation. Equipment will be from Voith, Germany. The capacity will be about 60,000 tonnes a year. Coated paper segment is growing at 12-15 per cent and is set to pick up with the increasing demand for coated papers from the printing and publishing segment, he said. In the three to four months that JK Paper has been in this market with its own production, its products have cornered over 20 per cent of the market share for coated art paper. Of course, JK had been in this segment earlier by marketing coated papers imported from Europe. Also, there is an increased demand from printing houses in India, which are now getting overseas orders. "Printing is gradually moving to the East and India is also getting the orders. Good quality printers are exporting books and brochures," he said. Though the shift by JK Paper to coated papers has resulted in some of the production in printing and writing paper shifting to coated papers, Mr Singhania said the company saw this move as a value addition. JK is going up the value chain from printing and writing paper to coated art paper. Internationally, coated papers account for about 40 per cent of the market, while printing and writing paper form the remaining. In India, coated papers account for just 10 per cent but this share is bound to increase to international levels. Of the 2.3 million tonnes of printing and writing paper, coated papers constitute just two lakh tonnes, he said. On copier papers, Mr Singhania said JK Paper expected revenues from the branded segment to account for a major share of its income. Now, over 42 per cent of its production and about 50 per cent of its revenue are from branded segments. Once coated paper stabilises its market share, over 75-80 per cent of its production will be devoted to branded products with a higher percentage of revenue from this segment. In 2004-05, JK Paper's sales revenue was Rs 730 crore with a profit after tax of Rs 38 crore. With paper prices in a buoyant phase, and the trend expected to continue for the next six months to a year, the company's performance in the current year (a July - June financial year) is expected to improve, he said.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
