Chairman and Managing Director's statement
The global economy remains resilient despite rising uncertainties and
escalation in geopolitical conflicts which is leading to frequent disruptions. The
enduring strength however is fraught with divergent growth; US economy continues to repel
recession fears, in sharp contrast to stagnant growth in other advanced economies, mainly
in the Euro zone and UK. China's economy remains engulfed by the downturn in its property
sector, while low consumer sentiment kept domestic demand subdued. This has resulted in
global growth of 3.2% in 2023 remaining below the historical average of 3.8%.
Amidst such a challenging global scenario, the Indian economy is a
beacon of progress, growing at an average of around 8% in the post-pandemic period and
pushing itself to grow from 5th to the 3rd largest economy globally in the near term. It
is backed by sustained consumption and investment demand, reaffirming its position as a
standout performer.This resilience is reflected in the constant upgradation of India's GDP
growth outlook by global agencies. India's proactive stance on reform and investment in
sustainable growth avenues sets a benchmark for other emerging economies.
But challenges remain, primarily the risk of inflation which is coming
back to haunt the global economy. Despite such uncertainties your Company has been able to
perform incredibly achieving highest ever total sales of 7.94 Lac MT during the year.
Consolidated Turnover
for the fiscal year 2023-24 crossed RS 7,000 crore.
The year gone by marks a new phase for the Company as JK Paper
announced a new vision during the year which is "To be a trusted industry leader
enriching lives and creating a better future".
During the year, the Company embarked on various initiatives to enhance
product mix and create a larger base for sustainable growth, the full benefits of which
are likely to be visible in the foreseeable future. By offering a diversified product
portfolio, it continued to remain in the top tier in the paper and paperboard industry and
remained well placed to capitalise on the evolving trends to enrich the lives of people
for a better future.
We also faced a few challenges including higher raw material cost and
lower sales realisation which have adversely impacted performance during the year.
Availability of wood has been a major challenge and this situation is expected to
continue, at least for another year. The selling prices continued to remain under pressure
due to increase in imports by almost a third on top of a 25% increase in the previous
year.
In addition to market expansion and service provided by the existing
trade partners, the Company's initiative to increase market touch points further widened
and deepened the geographic footprint. The market reach of your Company has expanded to
Tier II and
Tier III towns further enhancing the distribution network during the
year.
For the sustainability of paper business, a robust environmental
management system, is indispensable. At JK Paper, we are focused on optimizing process
parameters through automation, embracing the latest environmental- friendly technologies
like installation of modern emission control and adopting waste reduction measures to
minimise fiber loss and freshwater consumption. These initiatives have enabled JK Paper to
account for one of the lowest per-unit consumption of water, coal, steam, and energy
within India's integrated pulp and paper sector.
The Company continued to embrace Total Quality Management (TQM) across
all its units which enabled strong focus on guality, cost, delivery, safety and morale.
The Digital Transformation journey embarked by the Company for the past two years has been
gaining further traction during the year creating a digital mindset across every aspect of
the business, resulting in cost savings of over ?250 crore till date since its inception.
By the close of 2023-24, the Company had several additional digital projects in progress
which will continue to improve profitability.
>Amidst growing digitisation, the Company is realigning its product mix
and diversified into packaging boards and corrugated packaging.The packaging industry is
experiencing rapid expansion propelled by increasing disposable income, growing lifestyle
changes, and a rise in the consumption of processed food. Through substantial investments
in research and development, coupled with the integration of advanced technologies, the
Company has developed a range of products including high bulk SBS Board, Aqueous Coated
Board, and Antifungal Board during the year. These offerings cater to diverse customer
segments while aligning with the Company's commitment to providing sustainable paper
solutions.
In response to the growing concern over plastic-based food packaging,
the Company is well positioned to leverage the transition from plastic packaging towards
recyclable and compostable alternatives, by introducing new products featuring oil and
water resistance, moisture and oxygen barrier, and heat sealable capabilities.The Company
also offers sustainable packaging solutions tailored for the food service, pharmaceutical
and FMCG sectors, collaborating closely with customers to meet their specific needs.
Your Company continued to maintain its leadership in corrugated boxes
during the year and made an entry into Monocarton and Labels business through acguisition
of Manipal Utility Packaging Solutions Private Limited.This acguisition is in line with
long term Strategic objective of the Company in packaging business and gives an
opportunity to offer total solutions to the customers with respect to secondary and
tertiary packaging.
Adhering to top-tier sustainable forestry practices, JK Paper has
covered over one- third of its plantations under the FSC? FM certification in the fiscal
year gone by. The Company's cumulative plantation efforts span about 6.92 Lac acres across
diverse Indian states, with over 81,000 acres planted this year alone. Our farm forestry
programs have bolstered sustainable livelihoods in rural regions, ensuring a stable income
for farmers, along with establishing a renewable raw material source for the Company.
Continuing with the past trend, the Company enlarged its CSR footprint
during the year, covering 846 villages across seven states with almost 9.60 Lac direct
beneficiaries. The major CSR activities includes Women empowerment, Livelihood
Intervention, Education, Healthcare, Sustainable Agriculture, Rural Infrastructure and
Natural Resource Management. About 14,730 youths have been empowered through various skill
development training and 679 youth entrepreneurs have been created through a unigue
grampreneurs program.
Faced with a tight global financial scenario, Your Company remained
alert to optimise overall finance costs by using various forex and interest derivative
structure. Our prudent working capital management enabled us to repay loans of about ?664
crore (consolidated), a third of which was prepayment/accelerated
payment. On the other hand, net worth strengthened from RS 4,034 crore
to RS 5,070 crore in last fiscal at a consolidated level. The Company's net-debt/EBITDA
improved to 0.59x from 0.86x in the previous year.
At JK Paper, HR serves as the strategic backbone of the Company,
aligning its goals closely with overarching business objectives. Capability building is
prioritised, with a strong focus on nurturing and expanding the talent pool, ensuring the
development and recruitment of skilled individuals. Strategies are also tailored towards
fostering high retention rates, recognizing and rewarding employees' contributions while
ensuring a conducive work environment that promotes engagement and well-being.
JK Paper has been fortunate to have a strong support from all its
stakeholders, be it its customers, suppliers, channel partners, banks, financial
institutions, the shareholders, the Central and State governments and committed employees.
With your continued support, I am confident that company would become a stronger and
faster growing company in the years to come.
Harsh Pati Singhania
Chairman & Managing Director