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<dhhead>Chairman’s Message </dhhead>
Dear Shareholders,
It is a privilege to write to you at the conclusion of FY 2024. It has
been a year marked by several headwinds, including geopolitical conflicts and an uncertain
macroeconomic environment. Notwithstanding that, we, at Kuantum Papers, marked yet another
period of encouraging performance, buoyed by our resilient business model.
Throughout our journey, we have perceived every obstacle as an
opportunity to thrive, to do better. Propelled by this optimism, we have successfully
navigated many ebbs and flows over the years and aspire to continue to do so in the coming
years with even greater zeal. In this Annual Report, I would like to share our overall
performance, business highlights and what we look forward to achieve in the coming years.
Taking a look at the Bigger Picture
Against the backdrop of a global economic slowdown and transient
geopolitical concerns, the Indian economy is emerging as a bright spot with steady growth,
increasing consumption and robust macroeconomic fundamentals. The thrust of the Government
on ‘Viksit Bharat 2047’ focussing on economic growth, environmental stability
and social progress has infused a positive sentiment of inclusive economic participation
among all citizens. Prudent monetary policies implemented by the Reserve Bank of India and
improved labour force participation have greatly spurred economic activity and growth.
India, as the fastest-growing paper market globally, presents an exciting scenario where
paper consumption is expected to surge exponentially in line with the country’s
economic growth. India’s share in the global paper demand has seen impressive growth,
with domestic demand increasing consistently on the back of a strong manufacturing sector,
the requirement of better-quality packaging in FMCG products as well as elevated demands
for upstream market of paper products, including writing and printing paper, tissue paper,
and other specialty grades.
Performance Highlights
At Kuantum Papers, our journey from a modest production capacity of 30
TPD to a current capacity of 450 TPD has been remarkable. This growth has been driven by
continuous process upgrades and backward integration projects. Over the years, we have
established a diverse portfolio, encompassing a wide range of offerings within the paper
industry. As a trusted partner to our clients, our extensive product line including
Maplitho, Copier, Specialty and Creamwove papers, caters to varied customer needs.
Consistently pursuing manufacturing excellence and operational
efficiencies has enabled us to develop innovative products and solutions. By effectively
utilising agro-residues such as wheat straw as raw material for paper and rice husk as
fuel for power generation, we have not only produced quality products but also achieved
cost efficiencies alongwith significantly reducing our carbon footprint. This perfectly
aligns with our objective of sustainable growth with environmental stewardship.
Key Attributes
Operating in a sprawling 259 acres fully backward integrated
manufacturing facility at Saila Khurd town of Hoshiarpur district in Punjab, we capitalise
on our locational advantage. Favourably positioned in the foothills of the Shivalik
mountain range, we utilise abundantly available wheat straw, bagasse and wood chips, to
produce high-quality paper. This location ensures a steady supply of raw materials at
stable prices. Further, we are able to effectively tap into the high paper consumption
market of National Capital Region providing us a price advantage. Excellent connectivity
to the National Highway network enables us to supply our products across India. We
leverage a perfect blend of our own agro and wood resources with imported softwood pulp to
create superior-quality pulp for paper production. The unique configurations of our four
paper machines enable us to manufacture a wide array of products, such as surface-sized,
non-surface-sized and value-added specialty papers, catering to the diverse needs of our
customers.
Our focus on maintaining superior product quality and adapting to
dynamic market demand, has enabled us to command a premium price that is 5% to 7% higher
than our competitors. We have developed a distinguished range of branded products that
resonate with our customers, reinforcing our market leadership.
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Operational Overview
Our Pulp Mill with separate Agro and Wood Pulp streets produces 380 TPD
of high quality pulp, feeding our 4 paper machines. We strictly follow a sustainable wood
policy, sourcing our wood from environmentally responsible sources. Our state-of -the-art
700 TPD Chemical Recovery Island is capable of recovering over 95% of Caustic from Black
Liquor, which leads to significant cost-savings and helps us deploy a circular economy
model in our operations. Further, our advanced Co-Gen Power Plant with a capacity of 38 MW
enables us to be totally self-reliant for our power and steam requirements resulting in
power generation at a cost lower than the state provided grid power. The use of bio-mass
fuel including rice husk, wild grass, wood and wheat straw dust in our Power Plant goes a
long way in reducing GHG emissions. We operate with an order-based manufacturing approach,
producing goods only after receiving advance orders from dealers and distributors. This
demand-driven strategy ensures efficient inventory management, with finished goods rarely
exceeding three days’ production. Additionally, our highly efficient collection model
ensures payments are received timely, enabling us to maintain a healthy cash flow.
Committed to Social Responsibility
Beyond business, we prioritise delivering on our social commitments to
drive inclusive growth. We firmly believe that education is the building block of a nation
and through our company run high school, we provide quality and affordable education to
the children of the vicinity. Additionally, we extend financial assistance to develop
infrastructure in government schools and anganwadis. We are playing a leading role in
village infrastructure development through installation of solar lights, construction of
prefabricated toilet facilities, sewerage lines and sewage treatment plants in the
neighbouring villages .The treated effluent water from our operations is provided free of
cost to irrigate over 2,000 acres of farmlands in surrounding villages through a network
of pipelines laid at our expense. In the domain of healthcare, Kuantum regularly organizes
free medical checkup camps periodically, benefiting around 2,000 people in the surrounding
villages to promote preventive healthcare practices and ensure the well-being of the local
population. With a core belief that everyone deserves a fulfilling life, we organised an
Artificial Limb Donation and Fitment camp benefitting more than 200 differently-abled
people. This initiative was aimed at transforming lives of those in need with the gift of
mobility and self-reliance. Furthermore, the installation of RO systems and the
facilitation of an overhead water tank at Saila Khurd Village has led to improved access
to clean drinking water.
Rising against the Challenges
This past year, the paper industry’s growth trajectory was
impacted by challenges arising from increased import volumes and geopolitical disruptions.
A substantial increase in paper imports, primarily from Southeast Asian countries, coupled
with the shortage of export outflows due to the Red Sea crisis, exerted pressure on
domestic market prices. The convergence of these factors resulted in an oversupply
situation, affecting the industry’s overall market dynamics and pricing strategies.
However, at Kuantum Papers, we weathered this storm by consistently
delivering high-quality products and exceptional customer service. Our approach, which
emphasises operational efficiency, sustainable practices and product innovation, has
enabled us to successfully navigate the ever-evolving market landscape. We continue to
explore the opportunities stemming from the ban on single-use plastics, aligning our
product portfolio with the growing demand for eco-friendly alternatives.
Gratitude
I would like to express my heartfelt gratitude to all our stakeholders
and partners for their consistent cooperation. We look forward to sustaining our growth
momentum by working as one team and focusing on what we do best. By doing so, we aim to
maintain our competitive edge and our market position, thereby maximising value creation
for all our stakeholders.
As Kuantum Papers continues to chart a course towards a greener future,
it remains committed to driving positive changes within the paper industry. By pushing the
boundaries of environmental responsibility and innovation, the company looks ahead to a
future where sustainability is synonymous with progress and growth.
Best regards,
Jagesh Kumar Khaitan
Chairman