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JK Paper today said it is poised to achieve a substantial market expansion with introduction of new brands, expanding its pan India distribution network and re-entering the maplitho segment.
“The company will be introducing new brands, expanding pan-India distribution network and making a re-entry into the Maplitho segment. There is a wide market that can absorb huge capacity addition,” company President, A.S. Mehta, told PTI.
Stating that JK Paper had clocked a turnover of Rs 1,721 crore in 2012-13, he said contribution from exports, currently at about 5 per cent of total sales, would double to 10 per cent in the next one year with the company embarking on new outlets in Australia and a few African countries.
On future plans, Mehta said the company would adopt a three-pronged strategy. “We will introduce new brands in the market, including some that are not currently manufactured like hi-end paper for digital printing. This is expected to widen the company’s offerings in the market place.”
He said JK Paper was also strengthening the distribution network, targeting distributors in Bihar, Western UP, Punjab, Haryana, Karnataka and North East.
“As of now, there are 130 distributors and wholesale traders across the country tagged with over 4,000 dealers and retail outlets. Before this fiscal end, the distribution network will increase to 160,” he said.
Mehta said the product mix strategy was to dedicate the new machine predominately to A4 products. Existing machines would cater to Maplitho segment, a segment where JK Paper is making a re-entry.
The company recently commissioned a plant at Rayagada in Orissa at an investment of Rs 1,750 crore adding nearly 60 per cent to production capacity. With this, JK Paper would reach an annual capacity of 4.55 lakh tonnes from 2.90 lakh tonnes, he said.
The plant is expected to garner over Rs 1,000 crore additional revenue annually and would save a substantial amount on cost reduction by deploying state—of—art technology, combined with economies of scale and would help save chemicals, energy and water and making it environment friendly. The plant is also expected to have a positive impact on the company’s margins.
On the outlook for the sector, Mehta said the economic slowdown has adversely affected demand for paper in India. .
“However, I would rather think that fundamentals that drive growth for products like paper are strong and remain intact despite the slowdown,” he added.
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