Indian economy has gradually revived after two years of business
disruption due to COVID-19. The paper industry like many other industries performed very
well in FY 2023 across all segments. The demand of speciality paper products was robust
throughout the year. The disrupted global supply chain also improved due to softening of
freight rates but the input prices of some key inputs remained on the higher side. The
prices of imported pulp and waste paper, which constitutes about 55% of the cost of
production, witnessed a sharp rise during the year along with higher coal prices which
increased the cost of production. Your company has, however, overcome the challenges by
taking a number of I pro-active measures and new initiatives to reduce the cost of
production, timely and judicious decision in product mix with focus on manufacturing
products with higher margins and new product development. The company developed some
speciality products as a replacement of Single Use Plastic (SUP) and successfully marketed
them.
As a result of these measures, it is a pleasure to report that the
company in FY 23 reported revenues of Rs 759 Crores and Profit After tax (PAT) of Rs 59
Crores which is the highest profit in the history of the Company.
At Pudumjee Paper Products Limited (PPPL), we are optimistic of the
future prospects of specialty paper manufacturing business. The ban on Single Use Plastic
(SUP), though not yet fully implemented in the country, will further enhance the use of
specialty papers having barrier properties such as oil & grease resistance, OTR &
MVTR properties, aroma retention etc. PPPL has developed some niche products in last 3
years to take advantage of this opportunity and is continually upgrading these products.
The company will continue to have greater focus in this area and offer more such
environmentally sustainable and biodegradable products in the market with higher barrier
properties.
The geopolitical tensions have raised fresh concerns and challenges
which affected the business as a whole and cost of production substantially. The
uncertainty in the business has increased with higher frequency of up and down cycles
which were not witnessed before COVID-19. Due to pressure on the margins, some of the
rising costs were passed onto the consumers creating an environment of vicious circle
affecting order position and sudden price fluctuations. Being in the business of
speciality paper manufacturing, the company sources all of its fibrous raw material i.e
mainly softwood and hardwood pulp and small quantity of pre consumer based waste paper
from some select foreign countries. The specialty paper business is normally a low volume
business but the value addition is high. PPPL has been in the field of specialty paper
manufacturing business for last 55 years and will continue to remain a leader in this
segment due to its brand image, an experienced R&D team and their constant endeavour
for new product development. There are greater opportunities in food, pharma and hygiene
segments to which PPPL is well positioned to serve. The company is also considering fresh
investment in the field of speciality paper and related segment after carefully studying
the market demand.
The company has a dedicated and well experienced work force. Our people
are the backbone of the business and their knowledge, commitment and experience has always
been the pillar of strength for the success of the company. The company also has a network
of dealers who have been associated with the company for a long time and has always
supported the business with their dedication and commitment under all circumstances. Our
Valued customers always look upon us the "go to" for solutions to meet the ever
evolving stringent and innovative packaging requirements.
The demand of specialty paper is expected to remain robust in FY 2024.
The imported pulp and waste paper prices and the freight costs have reduced substantially
but the energy prices are still high. We may witness a drop in our topline due to
reduction in paper prices which have already been implemented but the overall
profitability is likely to remain good. India is probably one of the few economies
globally which is witnessing robust growth and is being targeted by manufacturers from
other countries as a potential market due to reduction in demand for their products in
their domestic markets which may affect our margins in the near term.
I wish to thank all our stakeholders for having confidence in the
company's management team and the wisdom of the Board of Directors who have helped us
steer through the difficult time.
Warm Regards,
Arunkumar Mahabirprasad Jatia
Executive Chairman