PUDUMJEE IS AT THE CUSP OF A SIZABLE INVESTMENT EXPECTED TO TRANSFORM
BUSINESS
OVERVIEW
The global packaging sector stands at an inlection point in its
existence.
For the first time in living memory, we are seeing a change in the way
consumers are buying packaging paper.
The questions being asked of various developers and manufacturers of
Specialty Papers like us comprise the following.
‘Is the paper compostable, biodegradable and recyclable?'
‘Was any hazardous chemical used in the manufacture of the speciality packaging paper
manufactured by your company?' ‘How clean and green is your product from a
lifecycle perspective?'
These customer questions represent the start of a new trend in the
packaging industry the world over. For the first ever time, the focus is shifiting from
the ‘what' to the ‘how'.
This shifit promises to transform the sector, benefiting companies like
ours that are committed to the development and manufacture of clean and green speciality
papers used in the packaging sector. At Pudumjee, we believe that this shifit is not
coming a day too soon. This is one of the most awaited developments the world over for an
evident reason. The extensive use of single use plastic by humankind has devastated one of
the most precious earth assets - its oceans and water bodies. Besides, this thin gauge
plastic is not cost-e fective to recycle, the use-and-throw habit has inevitably ended in
oceans. A recent estimate indicates that nearly million sq. km. of global oceans are
covered with single use plastic weighing around tonnes. To return these oceans to their
pristine glory would consume considerable financial resources, involving the co-operation
of several countries and a commitment to not litter the oceans again.
From this reality it would appear that the days of single use plastic
are numbered, and the world will transition with speed to environment-friendly packaging
paper. This transition is not expected to be simple. For one, the governments world over
have failed to enforce the ban on single use plastic; besides, manufacturers of cleaner
alternatives have held back investments precisely for this reason. The reality is that
humankind will need to live with plastic packaging in several applications for quite some
time.
Humankind does not need to make a complete switch from plastics to
alternatives in pursuing a solution. Even within the various types of plastic based
packaging solutions available, there are some which can be recycled, obviating the use of
virgin polymer and is one step towards a sustainable future. The challenge lies in finding
a solution for the one which are “Bad Plastics packaging Grades” which need
closer vigilance over their use and penal provisions for manufacturers, distributors, and
users. At Pudumjee, we believe in responsible coexistence. This should not come as a
surprise: paper, by its nature is not impervious to air and moisture; it needs to be
reinforced with some barrier chemicals to make it suitable for various applications. The
skill will lie in moderated polymer use and effective blends that provide an optimised
solution.
As a forward-looking manufacturer, we are engaged in a research-led
initiative to manufacture speciality packaging paper variants to reduce humankind's
dependence on single use plastic. We recognise that the road ahead may be long and warrant
proactive investments; we are encouraged by the fact that the green solid bag-cum-wrap
alternatives we had developed in the past have grown in market acceptance - from tonnes
per month not too long ago to a maximum of tonnes per month today. The company intends to
sustain its research spending with the objective to develop new varieties addressing
applications for stronger paper bags and cupcakes; this initiative is being extended to
cover alternatives for single use plastic. This is an attractive segment that has been and
is growing significantly recently and will continue to grow in future.
At Pudumjee, we are complementing our research-driven commitment with
the business-strengthening initiatives. For the long-term, the company is planning to
invest in a greenfield capacity. The company possesses attractive credentials: it had H Cr
cash & equivalents on its books at the close of the last financial year; it enjoyed
enduring relationships with customers seeking to buy a larger quantity from the company.
The company acquired about acres of land in Mahad for this second manufacturing facility
which has necessary infrastructure for a green field project. It has received no objection
certificate from the regulatory authorities for putting up the project in _ years. The
company is currently engaged in selection of machinery.
Speciality paper grades manufactured by Pudumjee, among the widest
portfolios in India's speciality paper industry
Another initiative that we took during the last financial year was the
commissioning of MW of solar energy. When commissioned around the end of the first half of
the current financial year, the generated power will deliver a financial saving when
compared with the price we pay for drawing from the state electricity grid. Besides, the
green energy that we generate will appeal to customers who seek to buy products
manufactured with green resources, enhancing the integrity of their supply chain. At
Pudumjee, we will continue to do what we have consistently done: enrich our operating
teams, deepen our process excellence, and strengthen our controls. We will sustain our
capital spending to upgrade the quality of our existing paper machines. We will also
leverage the value of our FSC certification that underlines our respect as a responsible
manufacturer.
Across the next three years, Pudumjee will continue to sweat available
assets cum knowledge; it will increase the proportion of outsourcing to scale the
business. Concurrently, it will focus on the timely commissioning of its new greenfield
manufacturing unit.
The complement of these initiatives is expected to translate into
business responsibility, profitability and sustainability that enhances perpetual value
for all our stakeholders