Yash Papers’ compostable tableware brand — Chuk — is in talks with the Indian Railways to supply meal-trays for its onboard catering services. The company is also looking to launch leak-proof specially designed containers to tap the takeaway market.

According to Ved Krishna, Head of Strategy, Yash Papers, the company is in advanced discussions with the Railways and a deal might fructify in the next 30 days.

“We have already supplied Indian Railways close to one lakh pieces for a trial run on specific routes. We are in advanced stage of discussion with them,” Krishna told BusinessLine .

The Railways will require around 500,000 pieces of meal-trays a day, to meet its onboard catering services. ‘Chuk’ will look to supply anywhere between 100,000 and 200,000 pieces immediately.

Uttar Pradesh-based Yash Papers currently manufactures untreated brown craft paper for packaging, which finds use in pharma and food industries. It supplies takeaway bags to food chains like KFC and Mc Donalds.

Commercial production

The company has been conducting trials on its tableware products made out of sugarcane waste or Bagasse for some months now. The commercial production began earlier this month.

Chuk’s production capacity is 7-8 lakh units a day, which can be scaled up to 40 lakh pieces a day, he said. It has already tied up with select vendors such as Devyani Group’s ‘Vaango’ quick service restaurant, ‘Paradise Biryani’ in Hyderabad and ‘Bitto Tikka Waala’ in Delhi.

Since these products are made out of fully compostable bagasse pulp, they are lightweight, flexible and strong. They can also withstand microwave heating.

Unlike the commoditised pulp and paper offerings, these value-added products command better margins. As against an EBITDA margin of 15-20 per cent for its pulp and paper products, Chuk expects a margin of close to 25 per cent.

“Chuk’s contribution to total revenues is likely to be 15-20 per cent in FY’19, which is expected to increase to 50 per cent over the next three years,” Krishna said.

According to him, there’s a huge demand for such compostable products in the takeaway segment. It is likely to enter the segment within this month.

The company is currently designing leakage-proof lids to tap the takeaway segment.

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