0

TITLE: “PAPER BAG MANUFACTURER OF NORTH INDIA”

(How much beneficial for Yash Paper Limited )

A Report Submitted to Ishan Institute Of Management & Technology, Greater

Noida as a part Fulfillment to Full Time Post Graduate Diploma In Management

Submitted to: Submitted by:

Dr. D.K.Garg, Jay Ganesh Tripathi

Chairman, Enr. No.-14095

IIMT,Greater Noida. PGDBM, 14th Batch

Ishan Institute of Management & Technology

1A, Knowledge Park-I, Greater Noida, Distt. G.B. Nagar (UP)

Website: www.ishanfamily.com,

E-mail: - ishan_corporate@yahoo.com

1

ACKNOWLEDGEMENT

I wish to express my sincere gratitude to all those persons who extended

their help, guidance and suggestions without which it would not have been

possible to complete the project report.

I am deeply indebted to my guide Mr. Shailesh Singh ( Asst. Marketing

Manager,Yash Papers Limited Darshan Nagar, Faizabad). For his

valuable and enlightened guidance and who encouraged me in compilation

of my project.

I am really thankful to Dr. D.K. Garg (Chairman, Ishan Institute of

Management and Technology), who has been the chief facilitator of this

project and I could enhance my knowledge in the field of paper industry.

JAY GANESH TRIPATHI

ENR NO-14095

2

DECLARATION

The summer training project on PAPER BAG MANUFACTURE

OF NORTH INDIA (How much beneficial for Yash Paper Limited )

.Under the guidance of Mr. Shailesh Singh is the original work done by me.

This is the property of the institute and use of this report without prior

permission of the institute will be considered illegal and actionable.

Date: Signature-

Jay Ganesh Tripathi

Enr No.-14095

3

TRAINING CERTIFICATE

4

TABLE OF CONTENTTitle: PAPER BAG MANUFACTURER OF NORTH INDIA

(How much beneficial for Yash Paper Limited )

Chapter No. Chapter Name Page No.1 Executive Summary 6-72 Objective 8

3 Indian Paper IndustryPaper Industry In India 9-13Major Deterrent – Fibre Deficiency 14-16Pulp And Paper Industry -(Raw Material Preparation) 17-34Indian Paper Manufacturers Association (IPMA) 35-40Paper And Its Types 41-89

4 Study Of Leading Five CompaniesCentury Pulp And Paper(CPP) 90-101Jk Paper Limited 102-114Rama Paper Mills Limited 115-119West Coast Paper Mills Limited 120-138Orient Paper & Industries Limited (OPIL) 139-142

5 Introduction On Yash Papers Limited 143Mission And Vision 144-146Code of Conduct & Equipment 147-166Products 167-170Managing Risks At Yash Papers 171-177Managerial Hierarchy 178Paper Manufacturing 179Balance Sheet Of Company 180-18910-Year Financial Summary 190-193

6 Demand And Supply 194-211

7 Trade Profile Of Company 212-250

8 Business StrategyCompany Policies 251Marketing Policies 251-252Expansion Plan 253Sales Network 254-260Social Commitment 261

5

Investors 262R & D Initiatives 262-263

9 Job Profile/ Assignment ProfileWork Assign 264Finding 264-268Swot Analysis 269Learning 270-272Suggestion 272-273

10 Conclusion 274-278

11 Bibliography 279

6

CHAPTER 1

EXECUTIVE SUMMARY

This project was undertaken to understand the market of Paper bag .Yash Papers

specialize in low grammage unbleached Kraft Paper made by agricultural residues such

as Bagasse (sugar cane waste) and Jute bags. Yash paper is the global trading company,

seeking for trade partners to start new business deals and keep onwards the strong

relationship. Company aim is to serve you the best as holding on win-win solution.

The paper grocery bag is an American innovation and was designed in 1883. It’s made

from kraft paper – the word ‘kraft’ coming from the German language meaning ’strong’.

Kraft paper is known for its strength and course texture. It’s strength lends to its

reusability.

According to the American Forest & Paper Association, 2007 marked an all-time high of

56% for the recycling of paper consumed in the U.S. Curbside paper collection is easy

and readily available in most parts of the country. While I applaud the consumer and the

industry for reaching this goal and beyond (the industries goal is 60% by 2012) I’d like to

point out that the manufacturing of paper products, like plastic, consumes natural

resources and creates pollution. As a matter of fact, the production of a paper bag

consumes 1 gallon of water (yep, per bag) equating to 50 times that of plastic bags.

Yikes!

How does a paper bag get from forest to grocery store? Trees are found, marked and

felled. Machinery is then used to remove the logs from the forest floor – whether by

logging or, in more remote areas, helicopters.

Machinery requires fossil fuels and roads (which destroy habitat) thereby creating stress

on the forests’ inhabitants (even logging a small area has a large impact on the entire

ecological chain in surrounding areas).

7

Trees must dry at least three years before they can be used to make paper. Once aged,

machinery is used to strip the bark, which is then chipped into 1 inch squares and cooked

under tremendous heat and pressure. This wood stew is then ‘digested’ with a limestone

and sulfurous acid for eight hours. The steam and moisture is vented to the outside

atmosphere, and the original wood becomes pulp. It takes approximately three tons of

wood chips to make one ton of pulp.

The pulp is then washed and bleached, both stages requiring thousands of gallons of

clean water. Coloring is added to more water, and is then combined in a ratio of 1 part

pulp to 400 parts water to make paper. The pulp/water mixture is dumped onto a web of

bronze wires, the water showers through, leaving the pulp to dry. This final product is

then rolled into paper.

Whew! What a lot of resources to just make the paper. We must include all of the

chemicals, electricity, and fossil fuels used in the shipment of this raw material and in the

production and shipment of a finished paper bag.

8

CHAPTER 2

OBJECTIVE

How much paper bag manufacture beneficial for Yash Papers Limited?

To know Demand of paper bag mostly in urban area .

How manufacturing of paper bag is very profitable for business.

To find how the services provided by Yash paper limited are better and cheaper to

there competitors.

TO find out how much GSM paper use by Paper Bag manufacturer.

9

PAPER BAG MANUFACTURER OF NORTH INDIA

CHAPTER 3

INDIAN PAPER INDUSTRY

PAPER INDUSTRYThe new millennium is going to be the millennium of the knowledge. So demand for

paper would go on increasing in times to come. In view of paper industry's strategic role

for the society and also for the overall industrial growth it is necessary that the paper

industry performs well.

Government has completely delicensed the paper industry with effect from17th July,

1997. The entrepreneurs are now required to file an Industrial Entrepreneur

Memorandum with the Secretariat for Industrial Assistance for setting up a new paper

mill or substantial expansion of the existing mill in permissible locations.

The Paper industry is a priority sector for foreign collaboration and foreign equity

participation upto 100% receives automatic approval by Reserve Bank of India. Several

fiscal incentives have also been provided to the paper industry, particularly to those mills

which are based on non-conventional raw material.

PAPER INDUSTRY IN INDIA

Paper industry in India is the 15th largest paper industry in the world. It provides

employment to nearly 1.5 million people and contributes Rs 25 billion to the

government's kitty. The government regards the paper industry as one of the 35 high

priority industries of the country. Paper industry is primarily dependent upon forest-based

raw materials. The first paper mill in India was set up at Sreerampur, West Bengal, in the

year 1812. It was based on grasses and jute as raw material. Large scale mechanized

technology of papermaking was introduced in India in early 1905. Since then the raw

material for the paper industry underwent a number of changes and over a period of time,

10

besides wood and bamboo, other non-conventional raw materials have been developed

for use in the papermaking. The Indian pulp and paper industry at present is very well

developed and established. Now, the paper industry is categorized as forest-based, agro-

based and others (waste paper, secondary fibre, bast fibers and market pulp).

In 1951, there were 17 paper mills, and today there are about 515 units engaged in the

manufacture of paper and paperboards and newsprint in India. The pulp & paper

industries in India have been categorized into large-scale and small-scale. Those paper

industries, which have capacity above 24,000 tonnes per annum are designated as large-

scale paper industries. India is self-sufficient in manufacture of most varieties of paper

and paperboards. Import is confined only to certain specialty papers. To meet part of its

raw material needs the industry has to rely on imported wood pulp and waste paper.

Indian paper industry has been de-licensed under the Industries (Development &

Regulation) Act, 1951 with effect from 17th July, 1997. The interested entrepreneurs are

now required to file an Industrial Entrepreneurs' Memorandum (IEM) with the Secretariat

for Industrial Assistance (SIA) for setting up a new paper unit or substantial expansion of

the existing unit in permissible locations. Foreign Direct Investment (FDI) up to 100% is

allowed on automatic route on all activities except those requiring industrial licenses

where prior governmental approval is required. Growth of paper industry in India has

been constrained due to high cost of production caused by inadequate availability and

high cost of raw materials, power cost and concentration of mills in one particular area.

Government has taken several policy measures to remove the bottlenecks of availability

of raw materials and infrastructure development. For example, to overcome short supply

of raw materials, duty on pulp and waste paper and wood logs/chips has been reduced.

Following measures need to be taken to make Indian paper industry more competitive:

Improvements of key ports, roads and railways and communication facilities.

11

Revision of forest policy is required for wood based paper industry so that

plantation can be raised by industry, cooperatives of farmers, and state

government. Degraded forest land should be made available to the industry for

raising plantations.

Import duty on waste paper should be reduced.

Duty free imports of new & second hand machinery/equipment should be allowed for

technology up gradation

The Indian Paper Industry accounts for about 1.6% of the world’s production of paper

and paperboard. The estimated turnover of the industry is Rs 25,000 crore (USD 5.95

billion) approximately and its contribution to the exchequer is around Rs. 2918 crore

(USD 0.69 billion). The industry provides employment to more than 0.12 million people

directly and 0.34 million people indirectly. The industry was delicenced effective from

July, 1997 by the Government of India; foreign participation is permissible. Most of the

paper mills are in existence for a long time and hence present technologies fall in a wide

spectrum ranging from oldest to the most modern.

The mills use a variety of raw material viz. wood, bamboo, recycled fibre, bagasse, wheat

straw, rice husk, etc.; approximately 35% are based on chemical pulp, 44% on recycled

fibre and 21% on agro-residues. The geographical spread of the industry as well as

market is mainly responsible for regional balance of production and consumption.

With added capacity of approximately 0.8 million tons during 2007-08 the operating

capacity of the industry currently stands at 9.3 million tons. During this fiscal year,

domestic production of paper and paperboard is estimated to be 7.6 million tons. As per

industry guesstimates, over all paper consumption (including newsprint) has now touched

8.86 million tons and per capita consumption is pegged at 8.3 kg.

12

Demand of paper has been hovering around 8% for some time. During the period 2002-

07 while newsprint registered a growth of 13%, Writing & Printing, Containerboard,

Cartonboard and others registered growth of 5%, 11%, 9% and 1% respectively. So far,

the growth in paper industry has mirrored the growth in GDP and has grown on an

average 6-7 per cent over the last few years. India is the fastest growing market for paper

globally and it presents an exciting scenario; paper consumption is poised for a big leap

forward in sync with the economic growth and is estimated to touch 13.95 million tons by

2015-16. The futuristic view is that growth in paper consumption would be in multiples

of GDP and hence an increase in consumption by one kg per capita would lead to an

increase in demand of 1 million tons. As per industry estimates, paper production is likely

to grow at a CAGR of 8.4% while paper consumption will grow at a CAGR of 9% till

2012-13. The import of pulp & paper products is likely to show a growing trend.

Foreign funds interest in the Indian paper sector is growing. IFC, the investment arm of

the World Bank is already associated with at least three of the IPMA member mills.

GROWTH PANGS

The increasing demand for paper brings with it new challenges of economies of scale,

efficient usage of resources, need to develop and expand sustainable use of fibre, and

value chain management, etc. Despite the fact that the Indian Paper Industry holds its

importance to the national economy, unfortunately it stands fragmented.

Paper sector is dominated by small and medium size units; number of mills of capacity

50000 tons per annum or more is not more than 25. Less than half a dozen mills account

for almost 90% production of newsprint in the country. There is a growing need to

modernize the Indian mills, improve productivity and build new capacities.

13

AGRO FORESTRY

In India, the paper industry is primarily rural based with close linkages with farming

community. Over the years it has evolved into an agro-based industry from its earlier

character of a forest-based industry.

WOOD REQUIREMENT OF PAPER INDUSTRY:

Currently Indian paper industry is consuming only about 7 million MT or about 3% of

the total wood consumed in India; about 90% is consumed as fuel wood.

Additional raw material requirement by 2012-13 is anticipated to be about 8 million tons

of wood which will be about 6% of total consumption of the country. This would require

afforesting 2 million Ha of land mass to maintain proper ecological balance.

MYTH AND THE REALITY

While all pervading myth that continues to slur the image of the industry is that it

perpetually uses forest raw material and consequently denudes natural forests of the

country, the truth is that over the last decade, industry led farm/social forestry have

brought around 0.25 million hectares under pulp wood plantations, mainly degraded

marginal lands of farmers. At the current estimate, wood based segment of the industry

uses 80 per cent of the total requirement from farm produced wood. In particular, IPMA

member mills have been actively promoting agro forestry with private land

holders/farmers to meet imminent raw material needs in a sustainable manner thereby,

positively impacting the Greening India mission of the Government. Also, the industry

initiative has created major employment in the remote areas in close proximity to the

manufacturing facilities thereby, helping rural development.

14

GLOBAL SCENARIO

Globally, paper industry has realized a linkage between production of paper and the

farming community thereby infusing huge capital in agricultural economy. The USA,

Latin America, Scandinavian countries, Australia, Japan and neighboring Asian countries

viz. China, Indonesia etc. all have been quick to create conducive land use/forestry

policies to encourage large-scale production plantations and attract mega investments in

pulp and paper/paperboard manufacturing and in the process creating millions of jobs.

INDIA IMPERATIVE

In order to replicate success stories of major global players in the field of Production/

Industrial Plantation, IPMA continues to advocate for atleast 2% access to degraded

forestland on lease. It is IPMA’s firm belief that besides facilitation of social/farm

forestry on private/revenue waste lands, if paper mills are permitted to grow pulpable

wood in the radius of 150 – 200 KMs to their facilities on the available degraded forest

land as well, it would hugely help mills to achieve cost competitiveness in terms of wood

and freight and would also, help generate employment, create wealth for the rural poor

and lend protection to environment. In this context, IPMA has pleaded for adoption of

Multi Stakeholder Partnership (MSP) model recently propounded by MoEF for

afforestation of degraded land.

MAJOR DETERRENT – FIBRE DEFICIENCY

WOOD

India’s wood resources are limited therefore, cost of wood is much higher in global

comparison. Since there is conspicuous absence of Government’s enabling policies

favouring industrial/production plantation, securing future wood supplies will be

Industry’s biggest challenge. Wood based segment of the paper industry meets its current

15

wood requirements mainly through social/farm forestry and supplements with purchases

made from the State Forest Development Corporations.

BAGASSE/ STRAW

Though annual availability of agro residues is large yet, this may not be able to sustain

the future growth of the Industry, taking due account of quality of paper required,

environmental issues involved, etc. Moreover, bagasse is increasingly used by sugar mills

for co-generation of power and no more easily available to the paper mills as raw

material.

WASTE PAPER

Recovered fibre consumption is going up globally. In India about 850,000-1,000,000 tons

of waste paper is being currently recovered annually. The recovery rate works out to

about 20% which is much lower in comparison with 65% recovery achieved by many

global players. Low recovery is on account of alternate use of paper in wrapping,

packing, etc. The utilization rate of recovered fibre is only 47%. Paper mills are heavily

dependent on imported waste paper which commands exorbitant price due to inadequate

availability. India needs a well-defined and aggressive system for collection, sorting,

grading and utilization recyclable waste paper to contain imports.

ENERGY COST

The Government of India has recently withdrawn core sector status hitherto enjoyed by

the paper industry. Cost of coal is escalating and prospect of availability of quality coal is

diminishing. The imported coal price (Indonesian Origin – GCV 6000Kcal/Kg) had

crossed USD 100/MT; such steep price rise had resulted in escalation of cost of

production of those mills which happened to be dependent on imported coal for

generation of steam/power. Also, power purchased from the grid is proving expensive for

the industry.

16

The Indian Paper Industry is among the top 15 global players today, with an output of

more than 6 millions tones annually with an estimated turnover of Rs. 150,000 millions.

(approx. USD 3400 million).

Paper Industry in India is riding on a strong demand and on an expanding mood to meet

the projected demand of 8 million tones by 2010 & 13 million tones by 2020.

A large number of expansion programme & expansion of capacities with an outlay of Rs.

10,000 crores have been announced covering the various sectors like paper, paperboard,

newsprint etc.

The Indian Economy is progressing well and targeting 8%+ growth. The economic

reforms coupled with the liberalized Government Policies, India today offers excellent

business opportunity for investments.

One of the first FDI Projects may come through the proposed Finnish proposal to set up a

400000 tpa capacity plant with an investment of US$240 million.

The expanding Industrial Scenario calls for efforts to tackle related problems:

Industry needs capital and technology.

Since energy cost accounts nearly 25 per cent of cost of production there is an

urgency to improve energy management and energy consumption.

Quantum jump in production, called for by the demand projection is possible only

by expansion of existing capacity and creation of additional capability.

Upgradation of technology and new capacities also involve massive investment.

Use of agro residues for preparation of pulp also throws up challenges like

pollution control, recycling, use of cost effective technology for utilization of agro

residues, etc.

17

THE WORLD PAPER INDUSTRY

The paper industry tends to be concentrated in those countries that are industrially

advanced and have abundant supplies of fibrous raw material, especially wood. There

is a large-scale international trade in wood pulp, pulpwood, and paper flowing from

those countries with large forest resources to those countries with less or that are as

yet undeveloped.

PULP AND PAPER INDUSTRY -(RAW MATERIAL

PREPARATION)

WOOD BASED MILLS -

SELECTION OF CHIPPERS & CONVEYING EQUIPMENT:

Chippers are one of the major consumers of power in a wood based paper mill. It is

suggested that energy efficient, high capacity, chippers be selected. The unitisation of

equipment (select only one high capacity chipper) results in obtaining good operating

efficiency.

Another factor to be seen in achieving optimum efficiency at chipper house is the optimal

feed rate. To achieve the optimal feed rate, mechanised conveying to chipper is to be

planned at design stage. This will result in better capacity utilisation of the chippers.

Conveying of chips also consumes considerable energy. The different methods of

conveying chips are pneumatic conveying, screw conveying or belt conveying. The most

energy efficient chips conveying is through belt conveyor. During design stage

consideration should be given for layout to minimise transportation. This will result in

power savings in chipper house. Planning of belt conveying systems for chips transport

18

will also reduce maintenance cost (due to lower wear and tear compared to pneumatic

conveying systems) and reduce atmospheric emissions from chippers.

During design stage, the paper mills should plan to burn chip-dust in the paper mill's

power boilers. This will reduce consumption of purchased fuels in the paper mill's power

boilers and eliminate environmental problems associated with chip-dust disposal.

WASTE PAPER BASED MILLS:

In countries like India, where there is a shortage of conventional raw material, every

effort should be made to encourage utilisation of waste paper. It can be either imported or

indigenous.

BAGASSE PROCESSING:

The general practice followed in the paper industry is to carry out moist depithing in the

paper mill. Instead, the following can be thought of at the design stage itself.

Plan moist depithing operations at sugar mill instead of paper mill. Also, plan to

compact the moist depithed bagasse at the sugar mill, before transportation to the

paper mill. This will eliminate transportation of pith from the sugar mill to the

paper mill, and also reduce the volume of bagasse to be transported to the paper

mill.

Plan for burning the pith, generated by moist depithing, in the sugar mill boilers.

This will reduce the consumption of purchased fuels in the sugar mill boilers.

Plan a thickening system for pith generated at wet cleaning, and burn the

thickened pith in the paper mill's power boilers. This will reduce the consumption

of purchased fuels in the paper mill's power boilers.

19

PULP MILL -

Pulping converts wood chips into fibres by the chemical reaction between lignin and the

active chemicals in the cooking liquor.

EXTENDED DELIGNIFICATION

WOOD PULPING

The advanced cooking process, with extended delignification based on displacement

heating in batch digesters or continuous vertical digesters, has given good results.

The benefits of such process sequences are multi-fold.

Saves energy Energy recycling saves upto 75% of steam demand. The steam

consumption can be brought down from 2.0 t/t of unbleached pulp to 0.65 t/t of

unbleached pulp.

Uniform and better pulp quality/properties, resulting in better machine runnability

and efficiency

Higher brightness levels can be achieved due to low kappa from digesters

Considerable savings in bleaching chemicals, and less pollution

NON-WOOD FIBRES

Continuous digesters may be planned for cooking non-wood fibres instead of using rotary

spherical batch digesters.

The following are the benefits realised by using continuous digesters.

Uniformity in pulp quality

Flexible production through controlled retention time

Optimum heat economy

Incorporation of cold blow system prevents damage to pulp fibres during blowing

and eliminates the need for blow heat recovery system.

20

WASHING

Though washing is not a major consumer of energy, there still exists a scope for energy

saving and environmental impact reduction.

The suggested black liquor concentration leaving the washing section is 18% for wood

pulp and 12% for agro residues.

Some of the proven equipment in washing are

Flat belt/wire washer

Double wire press

DD washer

Twin roll press

The above are advanced types of washing equipment and have several advantages. Some

of them are

Less energy intensive when compared to conventional drum washing.

Operate at higher pulp consistency levels; pulp enters at 3.0% consistency and

leaves at 32% consistency. BOD and COD discharged with the pulp, is less.

Hence, less bleach chemical is required and colour of the bleach plant effluent is

significantly reduced.

Increased black liquor solids concentration to evaporators and reduced steam

demand in evaporators. The black liquor concentration at inlet to evaporators

increases from 15% to 18%.

Chemicals loss is only 10 kg/t of pulp when compared to 20 kg/t of pulp in

conventional drum washing.

These equipment operate with a dilution factor of 1.5 as against a dilution factor

of 3.0 for conventional drum washers. Hence, water consumption is only 50% as

compared to conventional drum washers. This increases the weak black liquor

21

(WBL) concentration and results in substantial reduction in steam requirement in

black liquor evaporation plant.

Hence, it is recommended that such energy efficient washing systems are installed,

instead of conventional drum washers.

SCREENING

Many improvements have taken place in screening. The installation of pressure screens

can result in good energy savings. The pressure screens can be operated at a higher

consistency, typically 3.5%, against the conventional screening at 1.5% consistency. This

results in enormous energy savings in pumping energy. The separation efficiency of the

pressure screen is 95%, while that of the conventional screens is only 65% to 70%.

Another advantage is that the centricleaners can be completely avoided, if high pressure

screens with slotted baskets of proper slot size are installed. Therefore, pressure screens

should be installed and centricleaners should be avoided in pulp mills.

OXYGEN DELIGNIFICATION

With oxygen delignification, it is possible to reduce the kappa number of the pulp by

nearly 50%, thus resulting in savings in bleach chemicals. It also results in reduced

effluent load from the pulp mill, with reduction in the formation of organic material, like

COD and AOX.

The additional black liquor solids generated in oxygen delignification stage is sent to

chemical recovery for recovery of heat and chemicals in black liquor. This stage not only

recovers chemical in an environmental-friendly manner but also recovers energy, which

otherwise adds to COD, BOD and AOX load of effluent from bleach plant.

22

BLEACHING

The type of bleaching sequence significantly impacts environmental aspects. In India,

most of the plants still use elemental chlorine as a bleaching chemical. In this era of strict

environmental regulations, usage of elemental chlorine is frowned upon. For wood based

paper mills, use of elemental chlorine does not permit compliance with the tolerance

limits for total organic chlorides in the mill effluent.

Hence, new plants have to consider Elemental Chlorine Free (ECF) or Totally Chlorine

Free (TCF) bleaching sequences. In the long run, all plants would be would require to be

TCF, if environmental considerations become more stringent. Medium consistency

pumping (8 to 12%) is an established practice in developed countries while developing

countries normally use low consistency (3 to 4%). The medium consistency pumping

brings down the energy consumption for pumping considerably. Hence, ECF/TCF

bleaching, with medium consistency (8 to 12%) operation, is suggested.

BLACK LIQUOR EVAPORATION PLANT

Black liquor evaporation plant is one of the major consumer of steam in paper mill. The

steam consumption depends on the number of stages at the evaporation section. During

design, provision of a seven stage falling film evaporator with a steam economy of six is

an ideal choice to optimise the steam consumption. These plants operate with a minimum

steam economy of 6.0 compared to the normal steam economy of 4.5. This results in

reduction in steam consumption by about 25%.

In the conventional systems, forced circulation consumes a lot of power in terms of

pumping. In the new systems, forced circulation is completely avoided with considerable

reduction in power consumption. The additional cost for the new system will be paid

back in two (2) years.

23

In Indian mills efficient screening of weak black liquor is not practiced. This results in

down time of evaporation plant in the form of water boiling and steam energy

requirement for water boiling. Installation of pressure filters for weak black liquor

ensures removal of fibers prior to feeding weak black liquor to multiple effect

evaporation plant. This results in reduced 'scaling' of evaporator heat transfer surfaces

and, hence, higher availability and capacity. This in turn reduces the steam requirement

for water boiling.

At present, in Indian mills, the average black liquor concentration leaving the evaporators

is about 50%. A few mills have achieved a black liquor concentration at the outlet of

evaporators as high as 65% (abroad, it is 75 to 85%). For the new mills, the black liquor

concentration is to be planned at 65% leaving the evaporation plant.

Present day Indian mills do not practice condensate stripping. This results in venting out

of obnoxious malodorous mercaptan gases. From an environmental angle, segregation,

collection and utilisation of non-condensable gases must be thought of during the design

stage, even though energy available in non-condensible gases is recovered in rotary lime

kiln/chemical recovery boiler. Design should consider effective thermal insulation of

black liquor system and black liquor tankages.

RECOVERY BOILER

At recovery boiler, the steam generation per tonne of black liquor solids depends on the

concentration of black liquor entering the boiler. The present average steam generation is

only 3 t/t of black liquor solid (with 45% concentration black liquor entering the boiler).

The steam generation increase with increased concentration of black liquor is as follows

Black Liquor Concentration(in percentage)

Steam Generation(t/t of black liquor solid)

45 3.065 3.485 3.8

24

Therefore, there exists a good potential for increasing the steam generation by at least

13% (from 3 to 3.4 tonnes of steam per tonne of fuel) by improving the black liquor

concentration at the evaporator.

The advantages of high solids liquor firing are increased capacity of the boiler, increased

steam generation, very low SOx emission, low power consumption and high sodium

sulphate reduction efficiency.It is suggested recovery boilers be installed with

1)A large economiser (to recover the waste heat from flue gas and to eliminate direct

contact secondary evaporator of black liquor by flue gas) increase steam generation and

increased availability of boiler

2)A two stage air preheater

3)An ID fan with variable frequency drive

4)FD fans with variable frequency drive

5)Environmental protection equipment such as Electro Static Precipitator (ESP)

Causticiser and rotary lime kiln

Installation of lime kiln is imperative for the new plants, from environmental

considerations of eliminating solid-wastes disposal problems. Kiln is also a major

fuel energy consumer. The following points can be considered while designing

the lime kiln system

6)The dryness of lime mud feed is to be increased by installing snap blow filters. The

suggested dryness is 70-75%. For example, by increasing the dryness from 50% to 70%,

the fuel consumption comes down from 220 l/t of burnt lime to 160 l/t of burnt lime.

7)Kiln has to be provided with in-built preheating, double layer (with insulating layer)

refractory and a high efficiency, low NOx, burner for higher fuel efficiency

.8)Installation of ESP for dust recovery and environmentally friendly operation.

Design should also consider good thermal insulation of white liquor tankages.

25

REFINERS

Refiners are the major consumers of power in stock preparation section. It is possible to

save a considerable amount of energy (20-25% savings) by installing energy efficient

refiners. Energy efficient refiners consume very low 'no-load' energy. 'No-load' energy

refers to the power consumed by the refiner with pulp stock passing through the refiner

when refiner tackles are moved apart. The ratio between net refining energy to total

refining energy, should be as high as possible. This should be the selection/sizing

criterion for refiners.

CENTRICLEANERSThere is a good scope for optimising the power consumption by considering the

following points at design stage

Installation of low pressure drop centricleaners (maximum 15 m drop).

The operating consistency should be 1% (against the present average consistency

of 0.7%). However, this could be over-ridden by the paper machine headbox

consistency, which is configuration-dependent.

Installation of double dilution system. It gives better control and saves

considerable energy, particularly when machine headbox consistency requirement

is low. Centricleaners can then be run at optimum consistency independent of

head box consistency.

The water cycle has to be closed as far as possible, to minimise fresh water

consumption. The water consumption at paper machine can be brought down to

12 m3/t of paper at paper machine and approach system.

AGITATORS

Agitators also consume considerable energy. There are two types of designs in agitators,

namely, mixing type and suspension type. The suspension type agitators are suggested

where the pulp has to be kept in suspension for pumping. On the other hand, mixing type

agitators are suggested to mix different types of pulp. Therefore, mixing type agitators

26

generally require high torque motors and with higher motor capacity. Proper selection of

agitators appropriate to the duty conditions can save upto 50% of power consumption in

agitators.

Hence, proper type of agitators as per application should be selected.

Paper machine

Forming Area

Design formers with low power consumption and low friction suction boxes.

At the forming area, drainage provisions have to be made with less frictional

losses. The flat boxes can be of ceramic material. This saves 5-7% energy.

Evaporation from free wet surfaces is to be avoided by optimising ventilation at

the wet end of paper machine.

PRESSES

Paper machine is the major steam consumer in a paper mill. The steam consumption in

paper machine area depends mainly on the off-press dryness. The off-press dryness of

50% can be achieved by extended nip press/shoe press. Pulp or paper web should not be

overdried by evaporation rather it should be dried maximum by efficient pressing. Hence,

new plants should plan with extended nip/shoe press.

CONDENSATE REMOVAL SYSTEM

Proper condensate removal system with the latest design, high speed separation

efficiency, stationary siphon improves the evaporation rate at the paper machine drying

section.

Selection of rotary or stationary siphons is dictated by the machine operating speed.

Modern high speed paper machines are with stationary siphons. Design of stationary

siphons has advanced to such levels that differential pressure can be kept to the minimum

for efficient evacuation of the dryer cans. The amount of blow through steam is

dependent upon the siphon differential pressure required for efficient evacuation. The

27

lower the differential pressure, lower the blow through steam and higher the overall

thermal efficiencies. By choice of the right stationary siphons with low differential

pressure requirement, thermal efficiencies can be improved.

At higher machine speeds, the thickness of the condensate rim dictates the heat transfer

rates for drying. Lower the rim thickness, higher the heat transfer rates and lower the

steam consumption. Siphon clearance dictates the rim thickness. Modern stationary

siphons can operate at low siphon clearance.

Breaking the condensate rim by means of spoiler bars can significantly improve thermal

efficiencies in drying. With a good steam and condensate system and good siphon design,

steam requirements can be brought down to 1.3 kg steam for every kg water evaporated

from the paper web. Inefficient systems can be as high as 1.8 kg steam for every kg of

water evaporated.

Hence, it is recommended to install stationary siphon with high separation efficiency

condensate system.

CLOSED HOOD SYSTEM

A well designed hood system will reduce the heating requirements at the drying section

as high as 35%. An automatic hood control system can be installed at the suction of the

exhaust fan to have better results. Modern totally closed hoods can operate with dew

point as high as 65oC. This would mean that the exhaust air and supply air volumes can

be brought down quite substantially, thereby saving on drive power for the fans. Further,

since the same amount of heat is available in a smaller quantity of air, this exhaust air is

better utilized for heat recovery because of higher differential pressure at the heat

recovery units. So , a well designed closed hood system and automatic hood control at the

suction of the exhaust fan is recommended.

28

TYPE OF DRIVE

In the present context of highly reliable AC drives in the market, it is suggested to install

A/c drives for the paper machine main drive.

VACUUM PUMP

Vacuum pumps also consume considerable energy in paper machine area. Some of the

simple aspects to be taken at design stage are

Selection of energy efficient vacuum pump.

Segregation of low vacuum and high vacuum levels.

Correct sizing and routing of pipes to minimize losses.

Vacuum pumps shall be limited to minimum possible numbers and to be provided with

large capacity motors with double ended shaft and of synchronous motor design. Hence ,

correct size vacuum pumps have to be selected to optimize power consumption .In recent

times, mills abroad are using centrifugal exhausters for vacuum generation at paper

machine area. These centrifugal exhausters are energy efficient by 30% compared to

water ring vacuum pumps. Conventional liquid ring vacuum pumps are fixed

volume/variable vacuum intensity devices and, therefore, have constant power

characteristic. Centrifugal exhausters are variable volume/fixed vacuum intensity devices

and, therefore, have a varying power characteristic. Paper machine vacuum systems are

characterized by variable air flow requirements in the life cycle of the machine clothing.

Liquid ring vacuum pumps will consume the same quantity of power through this life

cycle. Centrifugal exhausters follow the system characteristics and, thereby, offer savings

in power (lower power when air flow requirements are on the lower side during the felt

life cycle).Hence, a centrifugal exhauster can be selected, instead of vacuum pumps.

29

MOISTURE CONTROL SYSTEM

An online moisture control system is very helpful to monitor the moisture to be

maintained at the paper machine (immediately after the drying cylinders). The advantages

are.

Better control on the moisture.

Avoids over drying, saves steam and increases the production.

Hence online moisture control is suggested.

GENERAL MILL-WIDE DESIGN FEATURES

The following general mill-wide design features have to be considered while designing a

new plant

Transport: The plant should be designed with minimum transport of raw

material, chemicals, fuel, steam and water.

Pipe lengths: Steam water, chemicals and pulp pipe lengths should be

minimum to minimise temperature loss and pressure losses. Plant layout should

take care of this.

SOURCE OF POWER FOR NEW PULP AND PAPER MILL

Cost of electrical energy being about 25% of the manufacturing cost of paper, it is of vital

importance to have a correct choice of in plant generation and utility drawal of power. At

present, the grid power cost exceeds the in plant generation cost in most of the cases. The

100% in plant generation is a better option for mill design, considering the utility

scenario obtained in the country, with its vagaries, interruption in availability and higher

cost of grid power.

30

PUMPS & FANS

Over-sizing of pumps and fans should be minimized and energy efficient pumps and fans

need to be selected. A detailed write-up on the selection and energy conservation aspects

to be considered in pump and fans. A margin of 10% is considered adequate at design

stage.

INSTALLATION OF VARIABLE FREQUENCY DRIVE (AC DRIVE)

The concept of installation of variable frequency drive (VFD) is picking up in paper

industry. VFDs are recommended wherever speed variation is required from 50 to 100%

range. Several mills abroad are operating with VFD for all the pumps. Indian paper

industry should also explore the possibility of installing VFD for different equipment.

The suggested areas where VFDs can be considered in paper industry are as follows

i) Recovery Boiler

a) Installation of VFD for forced draught fans

b) Installation of VFD for induced draught fan

ii) Washing, Screening and Bleaching

a) Replacement of eddy current drives with VFD for drum washers drives

b) Installation of VFD for primary, secondary and tertiary centricleaners,

pumps of unbleached/bleached pulp.

c) Installation of VFD for all dilution pumps of unbleached and bleached

sections.

iii) Stock Preparation

a) Installation of VFD for stock pumps to blending chest

31

b) Installation of VFD for machine chest pumps

iv) Paper Machine

a) Installation of VFD for fan pumps

b) Installation of VFD for secondary and tertiary centricleaner pumps

c) Installation of VFD for mould fan pumps

d) Installation of VFD for save-all clarified water pump

e) Installation of dual speed motors for couch pit and press pit agitators

f) Installation of VFD for MG machine/MF machine hood fans

g) Installation of VFD for coating knife edge blowers

h) Replacement of small steam turbines with DC drives or AC motors with

VFDs

v) Raw Water/Recycle Water Pumps

a) Installation of VFD for raw water/recycle water pumps

vi) Effluent Treatment Plant

a) Installation of VFD for roots blower (for agitation purposes)

b) Installation of VFD for final effluent discharge pumps

MOTORS

Over sizing of motors to be minimized and energy efficient motors are to be planned at

the design stage for the complete mill. Energy efficient motors will give a 2% saving in

the energy input when compared to the motors that were hitherto being used.

32

HIGH PULP CONSISTENCY OPERATIONS

Higher the pulp consistency, lesser will be the pumping requirements in the mill. Hence,

it is advisable to design the mill with higher pulp consistencies wherever possible.

INSULATION

Proper insulation of steam lines, condensate lines, digesters, paper machine sides, black

liquor piping and tanks should be given due consideration at design stage to, to effect

significant energy savings.

CONDENSATE RECOVERY

The plant should be designed and operated with maximum condensate recovery to

improve the fuel economy and also reduce water consumption.

TRAPPING SYSTEM

Selection of proper trapping system saves steam considerably.

UTILISE NATURAL LIGHT

The building should be designed with adequate natural light to minimise artificial lighting

during day time. Use of energy efficient lamps like high pressure sodium vapour lamps

will result in a 40% reduction in energy needed for lighting.

POWER FACTOR IMPROVEMENT

The power factor in the industry should be maintained at 0.95 or better, to save the

maximum demand drawn from the grid and also obtain effective usage of in plant

generation. The reduced demand on the grid not only reduces energy bill but also saves

the national grid from the "wattless" current and increased utilization capacity of their

33

equipment. The capacity of the electrical equipment in mills is utilized better with

enhanced power factor. The cost of installation of capacitors to improve the power factor

at 0.9 is paid back in less than a year.

APPLICATION OF PAPER

To write or print on: the piece of paper becomes a document; this may be for

keeping a record (or in the case of printing from a computer or copying from

another paper: an additional record) and for communication.

Paper can be produced with a wide variety of properties, depending on its intended use.

To represent a value: paper money, bank note, cheque, security (see Security

paper), voucher and ticket

For entertainment: book, magazine, newspaper, art, zine,

For packaging: corrugated box, paper bag, envelope, wrapping tissue and

wallpaper

For cleaning: toilet paper, handkerchiefs, paper towels, facial tissue and cat litter

For construction: papier-mâché, origami, quilling, Paper honeycomb, used as a

core material in composite materials, paper engineering, construction paper and

clothing

Other uses: emery paper, sandpaper, blotting paper, litmus paper, universal

indicator paper, paper chromatography and Capacitor Dielectrics (Permittivity 1.5

- 3)

ISSUES AND CONCERNS

The Indian paper and paperboards industry has potential and also capabilities to service

the growing demand in domestic and international market and also to create huge

employment avenues in the rural-India through agro/production – forestry and at mills,

provided the competitiveness of the value chain is encouraged by the government.

34

CERTIFICATION

Forest stewardship council certification is becoming a non trade barrier for Indian paper

companies. As bulk of the raw material is obtained from farm and agro- forestry, IPMA

is of the view that it would not be practical for huge number of farmers involved in

social/farm forestry to group and obtain the FSC certificate for their produce. Though the

farm forestry is a sustainable model promoted by the paper industry, the FSC principles

and criterions are difficult to satisfy. IPMA is monitoring the move set afoot by the

Government of India to establish Indian Forest Stewardship Council to help the process

of certification.

DEVELOPMENTAL CHALLENGES

Enhancing Industry’s competitiveness to face global competition

Economies of scale

De-fragmentation of industry

Modernization of mills

Building new capacities

Meeting incremental demand of paper

Productivity/quality improvement

Creation of robust raw material base

Environmental upgradation and green technologies

Setting mechanism for collection, sorting, grading and utilization of recyclable

waste paper

35

INDIAN PAPER MANUFACTURERS ASSOCIATION

(IPMA)

Indian Paper Manufacturers Association (IPMA) as a body represents the resurgent and

organized face of paper sector in India. Large Integrated Paper Mills from private and

public sector with a product mix of all varieties of paper (writing, printing, packaging,

speciality, paperboards and newsprint) located in all regions and using conventional fibre

such as wood and bamboo and also unconventional raw materials like recyclable waste

paper, agro-residues, viz. bagasse and wheat straw comprise the membership of IPMA in

a broad spectrum.

IPMA members account for more than one-third of industry’s production of paper and

paperboard. IPMA is registered with the registrar of socities, Goverment of NCT of

Delhi.

IPMA Secretariat: IPMA secretariat is located in the prestigious premises of PHD

Chamber of Commerce & Industry, at New Delhi. The Secretariat is professionally

managed and equipped with office automation. It is fully geared to meet the growing

requirements of paper industry and others, directly and indirectly associated with it.

IPMA welcomes intraction and exchange of information with individuals, agencies and

organizations having interest in paper industry.

HISTORY

Indian Paper Manufacturers Association (IPMA) is a national level organization having

come into being in December 1998 with merger of more than century old Indian Paper

Makers Association, Delhi and the 63 year old Indian Paper Mills Association, Calcutta

(Kolkata).

36

OBJECTIVES

As an association of large, dynamic paper manufacturers with global vision, IPMA

presents a broad based platform to project Indian paper industry’s views and articulate its

strategy

The overriding objective of IPMA is to promote the interests of paper industry in India

and help it achieve global competitiveness while striving to be an active participant in the

policy making process.

ACTIVITIES

Interface with government, media, opinion leaders, NGOs and industry

associations so as to present the perspective of paper industry and thereby

participate in the policy making process

Promote excellence in paper manufacturing through presentation of awards

Networking with international bodies with a view to gain better visibility for

Indian paper industry

Coordinate with research institutes and arrange platforms for industry-research

collaboration

Convene meetings and discussions to evaluate policies having direct or indirect

bearing on the paper industry and to make suggestions to the policy makers on the

issues and concerns of constituent member mills

Sponsor and participate in events, workshops, seminars, exhibitions, delegations

and promotional activities related to paper industry

37

MEMBERS

AFFILIATIONS/PARTICIPATION

IPMA has wide spectrum linkages with apex industry chambers in India and paper

industry associations both nationally and internationally.

Besides it actively collaborates with R&D institutes, Academic institutes and Economic

Research institutes in advancing the study and research on various aspects of pulp and

paper industry. These include contribution of paper to Indian economy, enhancing

competitive edge of paper industry, upgradation of technologies, raw materials

availability through agro - forestry and initiatives such as recycling of paper.

38

NATIONAL

INTERNATIONAL

NATIONAL

Here is a partial list of organizations (arranged alphabetically) which IPMA is affiliated

with or actively collaborates Nationally:

Apex Chambers

Confederation of Indian Industry (CII)

Federation of Indian Chambers of Commerce & Industry (FICCI)

Associated Chamber of Commerce & Industry (ASSOCHAM)

PHD Chamber of Commerce & Industry (PHDCCI)

Indian Chamber of Commerce and Industry (ICCI)

Research Institutes

Central Pulp and Paper Research Institute (CPPRI), Saharanpur

Centre for Science and Environment (CSE), New Delhi

Forest Research Institute of India, Dehradun

Institute of Forest Genetics and Tree Breeding, Coimbatore

Indian Grass and Fodder Research Institute, Dharwad (Karnataka)

Indian Council of Forest Research & Education, Dehradun

Sugarcane Breeding Institute, Coimbatore

Thapar Centre for Industrial Research and Development, Yamuna Nagar

Tata Energy Research Institute (TERI), New Delhi

Economic Think-tank

Centre for Monitoring Indian Economy (CMIE)

CRISIL Limited (A Standard & Poor’s Company)

39

Academic Institutes

Acharya N G Ranga Agricultural University, Hyderabad

Indian Institute of Forest Management, Bhopal

Trade Associations

All India Federation of Master Printers (AIFMP)

Federation of Paper Traders Association (FPTA)

Government Bodies

Bureau of Indian Standards

Development Council for Pulp, Paper & Allied Industries

National Manufacturing Competitiveness Council

Peer & Core Committee of Central Pollution Control Board

Industry Bodies

Indian Pulp & Paper Technical Association (IPPTA)

INTERNATIONAL

Here is a partial list of organizations (arranged alphabetically) which IPMA is affiliated

with or actively collaborates Internationally:

Research Institutes

Centre Technique Du Papier, France

STFI, Sweden

40

Trade Associations

FINPRO, Finland

Swedish Trade Council

Swedish Pulp and Paper Technology Group (Stockholm)

Zellcheming, Germany

Industry Bodies

Asian Pulp and Paper Association

Chinese Taipei Paper Industry Association

Confederation of European Paper Industry, Brussels (CEPI)

FAO’s Advisory Committee on Paper and Wood Products

Federation of ASEAN Pulp and Paper Industry (FAPPI)

Indonesian Pulp & Paper Association

International Council of Forest and Paper Associations (ICFPA)

India-China Trade Centre

Japan Paper Association

Korean Paper Manufacturers Association

Malaysia Pulp & Paper Manufacturers Association

Pulp and Paper Technical Association of Brazil (ABTCP)

Philippines Pulp & Paper Manufacturers Association

Pulp and Paper Technical Association of Canada

Taiwan Paper Industry Association

The Thai Pulp and Paper Industries Association

Vietnam Pulp & Paper Association

41

PAPER AND ITS TYPES

PAPER

Paper is thin material mainly used for writing upon, printing upon or for packaging. It is

produced by pressing together moist fibers, typically cellulose pulp derived from wood,

rags or grasses, and drying them into flexible sheets.

Paper is a versatile material with many uses. Whilst the most common is for writing and

printing upon, it is also widely used as a packaging material, in many cleaning products,

in a number of industrial and construction processes, and occasionally as a food

ingredient, particularly in Asian cultures.

HISTORY

The word paper derives from the Greek term for the ancient Egyptian writing material

called papyrus, which was formed from beaten strips of papyrus plants. The immediate

predecessor to modern paper is believed to have originated in China in approximately the

2nd century CE, although there is some evidence for it being used before this date.

Papermaking is considered to be one of the Four Great Inventions of Ancient China,

since the first papermaking process was developed in China during the early 2nd century

CE by the Han court eunuch Cai Lun. China used paper as an effective and cheap

alternative to silk, letting them sell more silk, leading to a Golden Age. The use of paper

spread from China through the Islamic world, and entered production in Europe in the

early 12th century. Mechanized production of paper in the early 19th century caused

significant cultural changes worldwide, allowing for relatively cheap exchange of

information in the form of letters, newspapers and books for the first time. In 1844, both

Canadian inventor Charles Fenerty and German inventor F.G. Keller had invented the

machine and process for pulping wood for the use in paper making.[1] This would end the

42

nearly 2000-year use of pulped rags and start a new era for the production of newsprint

and eventually all paper out of pulped wood.

Paper has a long history, beginning with the ancient Egyptians and continuing to the

present day. For thousands of years, hand-made methods dominated and then, during the

19th century, paper production became industrialised. Originally intended purely for

writing and printing purposes, a wide variety of paper grades and uses are now available

to the consumer.

3000BC

Of all the writing and drawing materials that people have employed down the ages, paper

is the most widely used around the world. Its name derives from papyrus the material

used by the ancient Egyptians, Greeks and Romans. Papyrus, however, is only one of the

predecessors of paper that together are known by the generic term ‘tapa’ and are mostly

made from the inner bark of paper mulberry, fig and daphne.

Tapa has been found extensively in nearly all cultures along the Equatorial belt and is

made by what is possibly the oldest papermaking technique – one still practised in some

parts of the Himalayas and South East Asia. Indeed, recent archaeological excavations in

China have revealed some of the oldest ‘tapa’ paper ever found which shows that paper

was being produced in China before western records began.

The tapa technique involves cooked bast, which is flattened with a wooden hammer to

form a thin, fibrous layer and then dissolved in a vat with water to make a pulp. A screen

consisting of a wooden frame with a fabric base is then laid in a puddle or big basin and

floats with the fabric just under the surface of the water. The papermaker then pours the

quantity of pulp needed to make one sheet into this ‘floating mould’ and spreads it

evenly, by hand, across the surface. The screen is then carefully lifted out of the water,

allowed to drain off and a sheet of paper forms on the wire. Once the water has dripped

off, the screen is placed in the sun or near a fire to dry. When dry, the sheet easily peels

43

off and, apart from possible smoothing, requires no further treatment. This technique has

two basic drawbacks. Firstly, a separate screen is needed for each new sheet, and is only

available for use again after the last sheet has dried. And secondly, an increase in

production can soon lead to a shortage of raw material, since fresh bast is not always

available everywhere in the required quantity.

The fibers normally used for textiles, like flax and hemp, also served as substitutes for

bast. In later times, the fabric was replaced by fine bamboo sticks, which freed the

papermaker of the need to let the paper dry naturally in the mould, since the poured or

ladled sheet could be ‘couched’ off.

AD 105

In AD 105, the Chinese court official, Ts'ai Lun, (if we are to believe the chronicle

recording the claim) invented papermaking from textile waste using rags. This can be

considered as the birth of paper as we know it today. Later, Chinese papermakers

developed a number of specialities such as sized, coated and dyed paper, and paper

protected against ravages by insects, but they had great problems satisfying the growing

demand for paper for governmental administration. They also used a new fiber-yielding

plant - bamboo - which they de-fiberd by cooking in lye.

AD 610

Chinese papermaking techniques reached Korea at an early date and were introduced to

Japan in the year 610. In these two countries, paper is still made by hand on a large scale

in the old tradition, preferably from the fresh bast fibers of the mulberry tree (kozo in

Japanese). Following the cooking process, the long, uncut fibers are merely prepared by

beating, which gives the paper its characteristic look and excellent quality. The latter is

due, among other things, to multiple, rapid immersions of the mould, which results in a

multi-layer fiber mat.

44

Very soon, knowledge of papermaking spread to Central Asia and Tibet and then on to

India. When the Arabs, in the course of their eastern expansion, neared Samarkan they

too became acquainted with the production of paper and paper mills were subsequently

set up in Baghdad, Damascus and Cairo, and later in Morocco, Spain and Sicily. Owing

to the lack of fresh fibers, the raw material used by the Arabs was made almost entirely

from rags: however, their defective and poorly designed processing equipment (such as

breaker mills) produced a rather inferior ground pulp. But, by using this method, with

screens made of reeds, thin sheets were made and then ‘coated’ with starch paste. This

gave Arabian paper its good writing properties and fine appearance.The export of

Arabian-made paper, along with the secrets of its product

14th CENTURY

In the course of the rapid expansion of trade in the late Middle Ages, more and more

merchants dealt in the commodity called ‘paper’ that was growing in importance for

public and intellectual life. The Nuremberg councillor Ulmann Stromer (Stromeir)

mulled over the advantages of making his own paper and, with the help of skilled

workers from Italy, transformed the ‘Gleismühle’ by the gates of his home town into a

paper mill. The dates noted in his diary, 24 June 1390 (start of work on the waterwheel)

and 7 and 11 August 1390 (oaths sworn by his Nuremberg foremen), are the first assured

records of papermaking on German soil.

The wording of Stromer's diary entries suggest that he regarded papermaking as a largely

unknown and secret art, that he had to prevail against the clan of immigrant Italians, and

that he had to overcome many technical difficulties. Stromer’s mill - illustrated in the

world chronicle of Hartmann Schedel in 1493 - was initially designed with two

waterwheels, 18 stamping hammers (i.e. six holes) and 12 workers using one or two vats.

45

16th CENTURY

The advantages of this mill-based papermaking technique, which spread throughout

Europe in the 15th and 16th centuries far outweighed the disadvantage of considerable

outlays of time and capital for building and fitting out with new machinery and

equipment. However, the change in the production process, thanks to the division of

labour, boosted output and improved quality. And it could certainly generate a profit, as

some examples prove. On the other hand, there was a growing risk of an imbalance

between costs and earnings, a state of affairs noted in the numerous reports of business

failures among papermakers.

Later, many paper merchants took over the mills as owners, while the master

papermakers practised their trade as lessees. This trend was stepped up by the special

conditions prevailing in the book sector, where a book printer or publisher had to fund the

production costs (paper, composition, printing) of a work before the sale of the print run

generated revenue. The result was that he was often indebted to the paper suppliers.

Work at the vat normally involved four people: the vatman, who made the sheet using a

mould; the couch squirt, who worked in time with the vatman and placed the sheet on

felt; the layman, who drew off the still moist sheets from the felt after pressing; and the

apprentice, who had to feed material to the vat and provide for vat heating. The press was

operated jointly by the team. Depending on format and basis weight, up to nine reams

(4,500 sheets) of paper could be made in the course of a working day of around 13 hours.

17th CENTURY

Technical progress continued in the 17th century. Smoothing the sheets by hand, using a

creasing knife or ‘blood stone’, was supplemented by the use of a smoothing hammer

(similar to a forging hammer). This led to a split in the craft between the tradition-

conscious ‘smoothers’ and the modern ‘stampers’ who refused to recognise one another

46

as fully-fledged papermakers. Towards the end of the 17th century, a new and much more

efficient beater, called a ‘hollander’, was invented. This supplemented, or even replaced

the stamping mill and further divided papermakers into two new camps.

The tremendous upsurge in papermaking during the Reformation in the 16th century,

coupled with the introduction of printing with movable type, soon led to a serious

shortage of raw materials and to regulations governing the trade in rags. The systematic

search for substitute materials met with little immediate success. In the early 18th century

straw was certainly used as a raw material but failed to make headway on quality

grounds. Only the invention of groundwood pulp by Saxon Keller (1843) and of chemical

pulp (first patented in 1854 by Mellier Watt) solved this problem.

18th CENTURY

During the 18th century there had been some concentration of craft activities in large

operations, the ‘manufactories’, which were dependent on skilled papermakers organised

into craft groups. The efforts made to step up production as much as possible and to have

many of the jobs done by machine (partly to get round the constraining rules of

papermakers' craft ‘usages’) culminated in the design and construction of paper making

machines. The initial model was the vat that was used by J.N.L. Robert, who built the

first flat-screen papermaking machine in 1798. This was further developed in England,

mostly by Donking and the Fourdrinier brothers.

Shortly afterwards other types appeared, like the Dickinson’s cylinder machine, and

machines which filled wire moulds transported on an endless chain and couched the

sheets on an continuous felt. Flat screen and cylinder machines, which were first seen in

the 19th century, were continually improved and extended to include a dryer section. This

soon led to a considerable widening of the paper web and to an increase in production

speeds.

47

It also heralded industrialisation. In this new era, the small operators who were unable or

unwilling to afford machines sought to survive with piece-work or by producing special

grades, but they were sooner or later compelled to discontinue their activities. Others had

to adapt their existing buildings or set up new mills elsewhere

19th & 20th CENTURY

The history of the paper industry in the 19th and 20th centuries can be broken down into

five partly overlapping periods, each marked by definite trends.

In the first stage (from about 1800 to 1860), all work sequences previously performed by

hand were mechanised. This included the rag preparation, the use of fillers, pulp beating,

the paper machine with its various parts, and the machines required for finishing the

paper (the headbox, wire section, press section, dryer section, units for reeling, smoothing

and packaging).

During the second stage (about 1840 to 1880), efforts were made to obtain rag substitutes

on an industrial scale (groundwood pulp and chemical pulp) and appropriate industrial

plants (groundwood and chemical pulp mills) were developed.

The third stage (1860 to 1950) was marked by the enlargement of the web width, an

increase in working speeds, the introduction of electric drive and further improvements to

various machine parts. Machines designed specifically for the production of particular

paper and board grades (for example the Yankee cylinder and multi-cylinder machines)

were also developed. The web working width grew from 85 cm (1830) to 770 cm (1930),

while production speeds rose from 5 m/min. (1820) to over 500 m/min. (1930).

The fourth stage (1950 to 1980), which was still dependent on the old methods as far as

the mechanics were concerned, brought unprecedented changes in papermaking.

Alongside further increases in web width and working speeds, there was the use of new

48

materials (thermo-mechanical pulp, deinked recovered paper, new fillers, processed

chemicals and dyes), new sheet forming options (e.g. by twin-wire formers), neutral

sizing, greater stress on ecology (closed loops) and, most of all, automation. The

operational impact of these changes was: specialisation in certain paper types;

development of new paper grades (LWC - lightweight coated paper); corporate mergers;

company groups with their own raw material supply and trading organisations; closure of

unprofitable operations.

1980 ONWARDS

The fifth stage leads into the future. The evolution of new sheet-forming principles (with

fluid boundaries between paper and non-woven fabrics) and chemical pulp processes

have been the main process improvements. However, the situation on the global market

(increased demand, above all in the Third World, trends in chemical pulp prices,

problems of location), are again raising capital intensity and encouraging the formation of

big company groups with international operations. At the same time there are definite

opportunities for smaller, local firms satisfying specific needs.

2000 & BEYOND

The new Millennium will be dominated by the tremendous progress that has been made

in computer science, thus triggering a complete change in our commercial and private

communication and information behavior. Does this mean that the paper era will come to

an end? The answer is most definitely "No".

Clearly there will be a huge amount of data being generated electronically, but the issue

is how to preserve it. The difficulties of data storage over a long period of time are well

known (for example, the durability of disks; frequent changes of hard and software,

electronic breakdowns etc.). Once again, paper offers the most convenient and durable

storage option. The advance in technology will affect only the printing of items like

short-lived handbooks and encyclopedias.

49

Reading a book will remain a great pleasure into the future and paper, as a ubiquitous

material with its many uses, will continue to play an influential role. Many artists will

continue to express themselves by using this most versatile material.

PAPERMAKING

CHEMICAL PULPING

The purpose of a chemical pulping process is to break down the chemical structure of

lignin and render it soluble in the cooking liquor, so that it may be washed from the

cellulose fibers. Because lignin holds the plant cells together, chemical pulping frees the

fibres and makes pulp. The pulp can also be bleached to produce white paper for printing,

painting and writing. Chemical pulps tend to cost more than mechanical pulps, largely

due to the low yield, 40–50% of the original wood. Since the process preserves fibre

length, however, chemical pulps tend to make stronger paper. Another advantage of

chemical pulping is that the majority of the heat and electricity needed to run the process

is produced by burning the lignin removed during pulping.

Papers made from chemical wood-based pulps are also known as woodfree papers.

The Kraft process is the most commonly practiced strategy for pulp manufacturing and

produces especially strong, unbleached papers that can be used directly for bags and

boxes but are often processed further, e.g. to make corrugated cardboard.

MECHANICAL PULPING

There are two major mechanical pulps, thermomechanical pulp (TMP) and mechanical

pulp. The latter is known in the USA as groundwood pulp. In the TMP process, wood is

chipped and then fed into large steam-heated refiners where the chips are squeezed and

fibreized between two steel discs. In the groundwood process, debarked logs are fed into

50

grinders where they are pressed against rotating stones and fibreized. Mechanical pulping

does not remove the lignin, so the yield is very high, >95%, but also causes paper made

from this pulp to yellow and become brittle over time. Mechanical pulps have rather short

fibre lengths and produce weak paper. Although large amounts of electrical energy are

required to produce mechanical pulp, it costs less than chemical pulp.

RECYCLED PAPER

Paper recycling processes can use either chemical or mechanical pulp. By mixing with

water and applying mechanical action the hydrogen bonds in the paper can be broken and

fibres separated again. Most recycled paper contains a proportion of virgin fibre in the

interests of quality.

There are three main classifications of recycled fibre:.

MILL BROKE OR INTERNAL MILL WASTE — this incorporates

any substandard or grade-change paper made within the paper mill which then

goes back into the manufacturing system to be repulped back into paper. Such

out-of-specification paper is not sold and is therefore often not classified as

genuine reclaimed recycled fibre. However, most paper mills have been recycling

their own waste fibre for many years, long before recycling become popular.

PRECONSUMER WASTE — this is offcuts and processing waste, such as

guillotine trims and envelope blank waste. This waste is generated outside the

paper mill and could potentially go to landfill, and is a genuine recycled fibre

source. Also includes de-inked preconsumer (recycled material that has been

printed but did not reach its intended end use, such as waste from printers and

unsold publications). [2]

POSTCONSUMER WASTE — this is fibre from paper which has been

used for its intended end use and would include office waste, magazine papers

51

and newsprint. As the vast majority of this paper has been printed (either digitally

or by more conventional means such as litho or gravure), it will either be recycled

as printed paper or go through a de-inking process first.

Recycled papers can be made from 100% recycled materials or blended with virgin pulp.

Recycled papers are (generally) not as strong nor as bright as papers made from virgin

pulp.

ADDITIVES

Besides the fibres, pulps may contain fillers such as chalk or china clay, which improve

the characteristics of the paper for printing or writing. Additives for sizing purposes may

be mixed into the pulp and/or applied to the paper web later in the manufacturing process.

The purpose of sizing is to establish the correct level of surface absorbency to suit the ink

or paint.

DRYING

After the paper web is produced, the water must be removed from it by pressing and

drying.

Pressing the sheet removes the water by force. Once the water is forced from the sheet,

felt (not to be confused with the traditional felt) is used to collect the water. When

making paper by hand, a blotter sheet is used.

Drying involves using air and or heat to remove water from the paper sheet. In the

earliest days of papermaking this was done by hanging the paper sheets like laundry. In

more modern times, various forms of heated drying mechanisms are used. On the paper

machine, the most common is the steam-heated can dryer. These dryers can heat to

temperatures above 200°F (93°C) and are used in long sequences of more than 40 cans.

The heat produced by these can easily dry the paper to less than 6% moisture.

52

FINISHING

The paper may then undergo sizing to alter its physical properties for use in various

applications.

Paper at this point is uncoated. Coated paper has a thin layer of material such as calcium

carbonate or china clay applied to one or both sides in order to create a surface more

suitable for high-resolution halftone screens. (Uncoated papers are rarely suitable for

screens above 150 lpi.) Coated or uncoated papers may have their surfaces polished by

calendering. Coated papers are divided into matte, semi-matte or silk, and gloss. Gloss

papers give the highest optical density in the printed image.

The paper is then fed onto reels if it is to be used on web printing presses, or cut into

sheets for other printing processes or other purposes. The fibres in the paper basically run

in the machine direction. Sheets are usually cut "long-grain", i.e. with the grain parallel to

the longer dimension of the sheet.

All paper produced by paper machines as the Fourdrinier machine are wove paper, i.e.

the wire mesh that transports the web leaves a pattern that has the same density along the

paper grain and across the grain. Textured finishes, watermarks and wire patterns

imitating hand-made laid paper can be created by the use of appropriate rollers in the

later stages of the machine.

Wove paper does not exhibit "laidlines", which are small regular lines left behind on

paper when it was handmade in a mould made from rows of metal wires or bamboo.

Laidlines are very close together. They run perpendicular to the "chainlines", which are

further apart. Handmade paper similarly exhibits "deckle edges", or rough and feathery

borders.

53

MANUFACTURE OF PAPER AND PAPERBOARD

PREPARATION OF STOCK

Mechanical squeezing and pounding of cellulose fibre permits water to penetrate its

structure, causing swelling of the fibre and making it flexible. Mechanical action,

furthermore, separates and frays the fibrils, submicroscopic units in the fibre structure.

Beating reduces the rate of drainage from and through a mat of fibres, producing dense

paper of high tensile strength, low porosity, stiffness, and rattle.

An important milestone in papermaking development, the Hollander beater consists of an

oval tank containing a heavy roll that revolves against a bedplate. The roll is capable of

being set very accurately with respect to the bedplate, for the progressive adjustment of

the roll position is the key to good beating. A beater may hold from 135 to 1,350

kilograms (300 to 3,000 pounds) of stock, a common size being about 7 metres (24 feet)

long, 4 metres (12 feet) wide, and about 1 metre (3.3 feet) deep. A centre partition

provides a continuous channel.

Pulp is put into the beater, and water is added to facilitate circulation of the mass between

the roll and the bedplate. As the beating proceeds, the revolving roll is gradually lowered

54

until it is riding full weight on the fibres between it and the bedplate. This action splits

and mashes the fibres, creating hairlike fibrils and causing them to absorb water and

become slimy. The beaten fibres will then drain more slowly on the paper machine wire

and bond together more readily as more water is removed and the wet web pressed. Much

of the beating action results from the rubbing of fibre on fibre. Long fibres will be cut to

some extent.

The beater is also well-adapted for the addition and mixing of other materials, such as

sizing, fillers, and dyes. By mounting a perforated cylinder that can rotate partially

immersed in the beater stock, water can be continuously removed from the beater, and the

stock therefore can be washed.

Although many design modifications have been made in the Hollander beater over the

years, the machine is still widely used in smaller mills making specialty paper products.

For large production modern mills have replaced the beater by various types of

continuous refiners.

In mills that receive baled pulp and use refiners, the pulp is defibred in pulpers. While

there are a number of variations in basic design, a pulper consists essentially of a large,

open vessel, with one or more bladed, rotating elements that circulate a pulp-water

mixture and defibre or separate fibres. The blades transform the pulp or wastepaper into a

smooth mixture. Unlike beaters and refiners, pulpers do not reduce freeness and cause

fibrillation in the fibres. A typical pulper has a capacity of 900 kilograms (2,000 pounds)

of fibre in 6 percent solution and requires 150 horsepower to drive it.

The original continuous refiner is the Jordan, named after its 19th-century inventor. Like

the beater, the Jordan has blades or bars, mounted on a rotating element, that work in

conjunction with stationary blades to treat the fibres. The axially oriented blades are

mounted on a conically shaped rotor that is surrounded by a stationary bladed element

(stator).

55

Like other refiners, the disk refiner consists of a rotating bladed element that moves in

conjunction with a stationary bladed element. The disk refiner's plane of action, however,

is perpendicular to the axis of rotation, simplifying manufacture of the treating elements

and replacement. Since the disk refiner provides a large number of working edges to act

upon the fibre, the load per fibre is reduced and fibre brushing, rather than fibre cutting,

may be emphasized.

Sizing has been described above as the treatment given paper to prevent aqueous

solutions, such as ink, from soaking into it. A typical sizing solution consists of a rosin

soap dispersion mixed with the stock in an amount of 1 to 5 percent of fibre. Since there

is no affinity between rosin soap and fibre, it is necessary to use a coupling agent,

normally alum (aluminum sulfate). The acidity of alum precipitates the rosin dispersion,

and the positively charged aluminum ions and aluminum hydroxide flocs (masses of

finely suspended particles) attach the size firmly to the negatively charged fibre surface.

Paper intended for writing or printing usually contains white pigments or fillers to

increase brightness, opacity, and surface smoothness, and to improve ink receptivity.

Clay (aluminum silicate), often referred to as kaolin or china clay, is commonly used, but

only in a few places in the world (Cornwall, in England, and Georgia, in the United

States) are the deposits readily accessible and sufficiently pure to be used for pigment.

Another pigment is titanium dioxide (TiO2), prepared from the minerals rutile and

anatase. Titanium dioxide is the most expensive of the common pigments and is often

used in admixture with others.

Calcium carbonate (CaCO3), also used as a filler, is prepared by precipitation by the

reaction of milk of lime with either carbon dioxide (CO2) or soda ash (sodium carbonate,

Na2CO3). Calcium carbonate as a paper filler is used mainly to impart improved

brightness, opacity, and ink receptivity to printing and magazine stocks. Specialty uses

include the filling of cigarette paper, to which it contributes good burning properties.

Because of its reactivity with acid, calcium carbonate cannot be used in systems

56

containing alum.Other fillers are zinc oxide, zinc sulfide, hydrated silica, calcium sulfate,

hydrated alumina, talc, barium sulfate, and asbestos. Much of the filler consumed is used

in paper coatings .

Since most fillers have no affinity for fibres, it is necessary to add an agent such as alum

to help hold the filler in the formed sheet. The amount of filler used may vary from 1 to

10 percent of the fibre.

The most common way to impart colour to paper is to add soluble dyes or coloured

pigment to the paper stock. Many so-called direct dyes with a natural affinity for

cellulose fibre are highly absorbed, even from dilute water solution. The so-called basic

dyes have a high affinity for groundwood and unbleached pulps.

Various agents are added to paper stock to enhance or to modify the bonding and

coherence between fibres. To increase the dry strength of paper, the materials most

commonly used are starch, polyacrylamide resins, and natural gums such as locust bean

gum and guar gum. The most common type of starch currently used is the modified type

known as cationic starch. When dispersed in water, this starch assumes a positive surface

charge. Because fibre normally assumes a negative surface charge, there is an affinity

between the cationic starch and the fibre.

The natural cellulose interfibre bonding that develops as a sheet of paper dries is

considered to be due to interatomic forces of attraction known to physical chemists as

hydrogen bonding or van der Waals forces . Because these attractive forces are

neutralized or dissolved in water, wet paper has practically no strength. Although this

property is convenient for the recovery of wastepaper, some papers require wet strength

for their intended use. Wet strength is gained by adding certain organic resins to the paper

stock that, because of their chemical nature, are absorbed by the fibre. After formation

and drying of the sheet, the resins change to an insoluble form, creating water-resistant

bonds between fibres.

57

FORMATION OF PAPER SHEET BY MACHINES

In a paper machine, interrelated mechanisms operating in unison receive paper stock

from the beater, form it into a sheet of the desired weight by filtration, press and

consolidate the sheet with removal of excess water, dry the remaining water by

evaporation, and wind the traveling sheet into reels of paper. Paper machines may vary in

width from about 1.5 to 8 metres (5 to 26 feet), in operating speed from a few hundred

metres to 900 metres (about 3,000 feet) per minute, and in production of paper from a

few tons per day to more than 300 tons per day. The paper weight (basis weight) may

vary from light tissue, about 10 grams per square metre (0.03 ounce per square foot), to

boards of more than 500 grams per square metre (1.6 ounces per square foot).

Traditionally, paper machines have been divided into two main types: cylinder machines

and Fourdrinier machines . The former consists of one or more screen-covered cylinders,

each rotating in a vat of dilute paper stock. Filtration occurs by flow action from the vat

into the cylinder, with the filtrate being continuously removed. In the Fourdrinier

machine a horizontal wire-screen belt filters the stock. In recent years a number of paper

machines have been designed that depart greatly from traditional design. These machines

are collectively referred to as "formers." Some of these formers retain the traveling screen

belt but form the sheet largely on a suction roll. Others eliminate the screen belt and use a

suction cylinder roll only. Still others use two screen belts with the stock sandwiched

between, with drainage on both sides.

In a typical modern Fourdrinier machine the various functional parts are the headbox;

stock distribution system; Fourdrinier table, where sheet formation and drainage of water

occur; press section, which receives the wet sheet from the wire, presses it between

woolen felts, and delivers the partially dried sheet to the dryer section; dryer section,

which receives the sheet from the presses and carries it through a series of rotating,

steam-heated cylinders to remove the remaining moisture; size press, which permits

58

dampening the sheet surface with a solution of starch, glue, or other material to improve

the paper surface; calender stack, for compressing and smoothing the sheet; and the reel.

The function of the headbox is to distribute a continuous flow of wet stock at constant

velocities, both across the width of the machine and lengthwise of the sheet, as stock is

deposited on the screen. Equal quantities of properly dispersed stock should be supplied

to all areas of the sheet-forming surface. The early headbox, more commonly called a

flowbox or breastbox, consisted of a rectangular wooden vat that extended across the full

width of the machine behind the Fourdrinier breast roll. The box was provided with

baffles to mix and distribute the stock. A flat metal plate extending across the machine

(knife slice) improved dispersion of the fibre suspension, providing distribution of flow

across the machine, and also metered the flow to produce a sheet of uniform weight. To

accommodate increased speed in modern headboxes, the knife slice is designed to

develop a jet of liquid stock on the moving wire. Modern headboxes are enclosed, with

pressure maintained by pumping.

The Fourdrinier table section of a paper machine is a large framework that supports the

table rolls, breast roll, couch roll, suction boxes, wire rolls, and other Fourdrinier parts.

The wire mesh upon which the sheet of fibre is formed is a continuous rotating belt that

forms a loop around the Fourdrinier frame. The wire, not a permanent part of the

machine, is delicate and requires periodic replacement. It is a finely woven metal or

synthetic fibre cloth that allows drainage of the water but retains most of the fibres. The

strands of the Fourdrinier wire are usually made of specially annealed bronze or brass,

finely drawn and woven into a web commonly in the range of 55 to 85 mesh (strands per

inch). Even finer wires are used for such grades as cigarette paper, coarser wires for

heavy paperboard and pulp sheets. Various types of weave are used to obtain maximum

wire life.

59

The table rolls, in addition to supporting the wire, function as water-removal devices. The

rapidly rotating roll in contact with the underside of the wire produces a suction or

pumping action that increases the drainage of water through the wire.

The dandy roll is a light, open-structured unit covered with wire cloth and placed on the

wire between suction boxes, resting lightly upon the wire and the surface of the sheet. Its

function is to flatten the top surface of the sheet and improve the finish. When the dandy

roll leaves a mesh or crosshatch pattern, the paper is said to be "woven." When parallel,

translucent lines are produced, it is said to be "laid." When names, insignia, or designs

are formed, the paper is said to be "watermarked." Paper watermarks have served to

identify the makers of fine papers since the early days of the art. A watermark is actually

a thin part of the sheet and is visible because of greater transmission of light in its area

compared with other areas of the sheet. Because light transmission can be varied by

degrees, it is possible to produce watermarks in the form of portraits or pictures.

The final roll over which the formed sheet passes, before removal from the Fourdrinier

wire, is the couch roll. Prior to the transferring operation, the couch roll must remove

water from and consolidate the sheet to strengthen it. In modern machines the couch roll

is almost always a suction roll.

The press section increases the solids content of the sheet of paper by removing some of

the free water contained in the sheet after it is formed. It then carries the paper from the

forming unit to the dryer section without disrupting or disturbing sheet structure and

reduces the bulk or thickness of the paper.

The first two functions are always necessary. Pressing always results in compaction, and

this may or may not be desirable depending upon the grades being made.

Felts for the press section act as conveyor belts to assist the sheet through the presses, as

porous media to provide space and channels for water removal, as textured cushions or

60

shock absorbers for pressing the moist sheet without crushing or significant marking, and

as power transfer belts to drive nondriven rolls or parts.

Woven felts of wool, often with up to 50 percent synthetic fibres, are made by a modified

woolen textile system. Selected grades of wool are scoured, blended, carded, and spun

into yarn. The yarn is woven into flat goods, leaving a fringe at each end. The ends are

brought together and joined to produce an endless, substantially seamless belt.

Paper machine felts have a limited life ranging from about a week to several months.

Their strength and water-removal ability is gradually lost through wear and chemical and

bacterial degradation and by becoming clogged with foreign material.

Press rolls must be strong, rigid, and well-balanced to span the wide, modern machines

and run at high speed without distortion and vibration. Solid press rolls consist of a steel

or cast iron core, covered with rubber of various hardnesses depending upon the

particular service required. Suction press rolls consist of a bronze or stainless steel shell

two inches (five centimetres) or more in thickness and usually covered with one inch of

rubber.

Paper leaving the press section of the machine has a solids content or dryness of 32 to 40

percent. Because of the relatively high cost of removing water by evaporation, compared

with removing it by mechanical means, the sheet must be as dry as possible when it

enters the dryers. The dryer section of a conventional paper machine consists of from 40

to 70 steam-heated drying cylinders. After passing around the cylinders, the sheet is held

in intimate contact with the heated surfaces by means of dryer felts.

Until recent years, relatively heavy, rather impermeable cloths composed of wool, cotton,

asbestos, or combinations of these materials covered the dryer portion of the paper

machine. Such cloths are termed dryer felts, though felting or fulling process is rarely

used in their manufacture. Relatively lightweight, highly permeable cloths called dryer

fabric also are employed.

61

For conventional dryer felts, cotton is still the most commonly used fibre, although it is

seldom used alone. The main difference between the conventional dryer felt and the

open-mesh dryer fabric is air or vapour permeability. High permeability is desirable

because it allows the escape of the water vapour from the sheet.

For every ton of paper dried on the paper machine, approximately two tons of water are

evaporated into the atmosphere. About 50 to 60 tons of air are required to remove the

water vapour, with about 2,700 kilograms (6,000 pounds) of steam required by the

dryers.

FINISHING AND CONVERTING

The rolls of paper produced by the paper machine must still undergo a number of

operations before the paper becomes useful to the consumer. These various operations are

referred to as converting or finishing and often make use of intricate and fast-moving

machinery.

There are two distinct types of paper conversion. One is referred to as wet converting, in

which paper in roll form is coated, impregnated, and laminated with various applied

materials to improve properties for special purposes. The second is referred to as dry

converting, in which paper in roll form is converted into such items as bags, envelopes,

boxes, small rolls, and packs of sheets. A few of the more important converting

operations are described here.

Paper has been coated to improve its surface for better reproduction of printed images for

over 100 years. The introduction of half-tone and colour printing has created a strong

demand for coated paper. Coatings are applied to paper to achieve uniformity of surface

for printing inks, lacquers, and the like; to obtain printed images without blemishes

visible to the eye; to enhance opacity, smoothness, and gloss of paper or paperboard; and

to achieve economy in the weight and composition of base paper stock by the upgrading

effect of coating.

62

The chief components of the water dispersion used for coating paper are pigment, which

may be clay, titanium dioxide, calcium carbonate, satin white, or combinations of these;

dispersants to give uniformity to the mixture or the "slip"; and an adhesive binder to give

coherence to the finished coating. The latter may be a natural material such as starch or a

synthetic material such as latex.

Equipment installed between dryer sections on the paper machine can apply the coating

(on-machine coating), or it can be done by a separate machine, using rolls of paper as

feed stock (off-machine coating).

The extrusion-coating process, a relatively new development in the application of

functional coating, has gained major importance in the past 20 years. The process is used

to apply polyethylene plastic coatings to all grades of paper and paperboard. Polyethylene

resin has ideal properties for use with packaging paper, being waterproof; resistant to

grease, water vapour, and gases; highly stable; flexible in heat sealing; and free from

odour and toxicity.

In the extrusion-coating machine, the polyethylene resin is melted in a thermoplastic

extruder that consists of a drive screw within an electrically heated cylinder. The cylinder

melts and compacts the resin granules and extrudes the melt in a continuous flow under

high pressure. The resin is discharged through a film-forming slot die. The die has

electric heaters with precision temperature controls to give uniform temperature and

viscosity to the plastic melt. The slot opening can be precisely adjusted to control film

uniformity and thickness.

The hot extruded film is then stretched and combined with paper between a pair of rolls,

one of which is a rubber-covered pressure roll and the other a water-cooled, chromium-

plated steel roll. The combination takes place so rapidly that a permanent bond is created

between the plastic film and the paper before they are cooled by the steel roll.

63

The most widely used package for commodities and manufactured products is the

corrugated shipping container. A corrugated box consists of two structural elements: the

facings (linerboard) and the fluting structure (corrugating medium).

Linerboard facings are of two general types: the Fourdrinier kraft liner is made of pine

kraft pulp, usually unbleached, in an integrated mill as a continuous process from the tree

to the paper web; and the cylinder liner is made from reprocessed fibres, generally from

used containers, providing a content of about two-thirds kraft.

The operation begins by unwinding the single-face liner and corrugating medium from

holders, threading the medium into the fluting rolls, applying adhesive to the tips, and

bringing the medium in contact with the liner to form a single-face web. Next, the single-

face web passes another glue roll that applies adhesive to the exposed flute tips of the

medium. The second face liner is brought in contact with the single-face web, and the

combined board travels through a hot plate section between belts to set the bond, to a

cooling section, and then to a slitter-scorer.

STRENGTH AND DURABILITY

The strength of paper is determined by the following factors in combination:

The strength of the individual fibres of the stock,

The average length of the fibre,

The interfibre bonding ability of the fibre, which is enhanced by the beating and

refining action,

The structure and formation of the sheet.

Resistance to rupture when subjected to various stresses is an important property in

practically all grades of paper. Most papers require a certain minimum strength to

withstand the treatment received by the product in use; but even where use requirements

are not severe, the paper must be strong enough to permit efficient handling in

64

manufacture. Tensile strength is the greatest longitudinal stress a piece of paper can bear

without tearing apart. The stress is expressed as the force per unit width of a test

specimen.

Since the weight of the paper and the width of the test specimen affect the force of

rupture, a conventional method of comparing inherent paper strength is the breaking

length--that is, the length of a paper strip in metres that would be just self-supporting.

This value varies from about 500 metres for extremely soft, weak tissue to about 8,000

metres for strong kraft bag paper, and to about 14,000 metres for sheets of paper made

under ideal laboratory conditions.

Because some paper products such as towels, sanitary tissues, and filter paper are

subjected to wetting by water in their normal use, wet tensile testing has become

important. This test is essentially the same as that for dry tensile strength, except that the

specimen is wetted. Paper that has not been specifically treated to produce wet strength

possesses from about 4 to about 8 percent of its dry strength when completely wetted. By

treating paper as described above, wet strength can be raised to about 40 percent of the

dry strength.

One of the oldest and most widely used strength tests for paper and paperboard is the

bursting test, or Mullen test. It is defined as the hydrostatic pressure (caused by liquids at

rest) necessary to cause rupture in a circular area of a given diameter. Other strength tests

for which standard methods exist are tearing strength and folding endurance.

The resistance of paper to a bending force is evident in the various operations of its

manufacture and in its many uses. The range in this property extends from very soft,

flexible tissues to rigid boards. Thicker and heavier sheets tend to be stiff, whereas soft,

flexible sheets are light and thin. Even at the same weight there is a considerable

difference in stiffness, chiefly due to the compactness and the amount of bonding of the

sheet

65

Because paper is composed of a randomly felted layer of fibre, the structure has a varying

degree of porosity. Thus, the ability of fluids, both liquid and gaseous, to penetrate the

structure is a property both highly significant to the use of paper and capable of being

widely varied by the conditions of manufacture.

Sizing paper with vegetable materials and rosinlike substances has already been

described. When paper began to be used for wrapping, consumers demanded sizing

treatments that could protect the contents of the package from the effects of fluid transfer

through the paper wrapping. In some instances complete impermeability was required. In

another direction the use of paper as an absorbent medium for wiping up liquids, for

filtering, and for saturating has created a demand for maximum wettability and

permeability toward water and other fluids.

In certain types of packaging, paper must resist grease and oil penetration. The resistance

of paper to the penetration of water can be increased by treatment of fibre with materials

that lack affinity for water, with little effect upon sheet porosity, but the penetration of oil

materials is little affected by such treatment. Oil and grease resistance is attained, in fact,

by reduction in porosity. So-called greaseproof paper is made by beating an easily

hydrated pulp to extremely low freeness, which results in a dense sheet with very little

void space.

Absorbent papers such as toweling, sanitary tissue, and blotting and filter paper are

normally made from lightly beaten stock. Since cellulose is naturally hydrophilic (i.e.,

has a strong affinity for water), absorbent papers have a minimum of foreign materials

associated with the fibre. Of particular importance are the wood rosins that may be

present in pulp and produce a self-sizing effect, especially upon aging.

66

APPLICATIONS

PAPER CUTTER

To write or print on: the piece of paper becomes a document; this may be for

keeping a record (or in the case of printing from a computer or copying from

another paper: an additional record) and for communication; see also reading.

Paper can be produced with a wide variety of properties, depending on its intended use.

TO REPRESENT A VALUE

paper money, bank note, cheque, security (see Security paper), voucher and ticket

FOR STORING INFORMATION:

book, notebook, magazine, newspaper, art, zine, letter

for personal use: diary, note to remind oneself, etc.; for temporary

personal use: scratch paper

for communication to someone else:

by transportation of the paper from the place where it is written or

printed to the place where it is read: delivered by sender,

transported by a third party (e.g. in the case of mail), or taken by

the receiver

by writing at the same place as where it is read:

o if sender and receiver are not there at the same time, in the

case of a posted notice

67

o if sender and receiver are both present, but use paper for

illustration, or if communication by talking is not suitable:

because one is mute or the other is deaf

to avoid other people hearing it, because it is secret,

or in order not to disturb them

in a noisy environment

FOR PACKAGING

corrugated box, paper bag, envelope, wrapping tissue, Charta emporetica and

wallpaper

FOR CLEANING

toilet paper, handkerchiefs, paper towels, facial tissue and cat litter

FOR CONSTRUCTION

origami, paper planes, quilling, Paper honeycomb, used as a core material in

composite materials, paper engineering, construction paper and clothing

OTHER USES

emery paper, sandpaper, blotting paper, litmus paper, universal indicator paper, paper

chromatography, electrical insulation paper (see also dielectrics and permittivity) and

filter paper

68

TYPES, THICKNESS AND WEIGHT

Card and paper stock for craft use comes in a wide variety of textures and colors.

The thickness of paper is often measured by caliper, which is typically given in

thousandths of an inch. Paper may be between 0.07 millimetres (0.0028 in) and

0.18 millimetres (0.0071 in) thick.

Paper is often characterized by weight. In the United States, the weight assigned to a

paper is the weight of a ream, 500 sheets, of varying "basic sizes", before the paper is cut

into the size it is sold to end customers. For example, a ream of 20 lb, 8½ x 11" paper

weighs 5 pounds, because it has been cut from a larger sheet into four pieces. In the

United States, printing paper is generally 20 lb, 24 lb, or 32 lb at most. Cover stock is

generally 68 lb, and 110 lb or more is considered card stock.

The 8.5" x 11" size stems from the original size of a vat that was used to make paper. At

the time, paper was made from passing a fiber and water slurry through a screen at the

bottom of a box. The box was 17" deep and 44" wide. That sheet, folded in half in the

long direction, then twice in the opposite direction, made a sheet of paper that was

exactly 8.5" x 11".

In Europe, and other regions using the ISO 216 paper sizing system, the weight is

expressed in grammes per square metre (g/m2 or usually just g) of the paper. Printing

paper is generally between 60 g and 120 g. Anything heavier than 160 g is considered

card. The weight of a ream therefore depends on the dimensions of the paper and its

thickness.

The sizing system in Europe is based on common width to height ratios for different

paper sizes. The largest standard size paper is A0 (A zero). Two sheets of A1, placed

upright side by side fit exactly into one sheet of A0 laid on its side. Similarly, two sheets

69

of A2 fit into one sheet of A1 and so forth. Common sizes used in the office and the

home are A4 and A3 (A3 is the size of two A4 sheets).

The density of paper ranges from 250 kg/m3 (16 lb/ft3) for tissue paper to 1500 kg/m3

(94 lb/ft3) for some speciality paper. Printing paper is about 800 kg/m3 (50 lb/ft3)

PAPER TYPES

ABRASIVE KRAFT

Used For : Abrasive Kraft is used for making sand paper used in roughening applications.

ABSORBENT KRAFT

Used For : Used for Laminates, tube making and defence applications.

ALKALINE PAPER

Paper having pH values greater than 7 made by an alkaline manufacturing process.

ANTI RUST PAPER

Paper which has the property of protecting the surfaces of ferrous metals against rust.

ANTIQUE PAPER

Printing paper having good bulk and opacity with rough or matt surface.

ART PAPER

Normally, china clay (kaolin) coated on both sides of the paper. This finish of both the

sides is same, be it glossy or matt.

70

Used For : Brochures, calendars, magazine covers, magazine text, where high quality

printing is required

AZURELAID PAPER

A laid paper usually bluish green in colour having a good writing surface.

BAROGRAPH PAPER

Red thin paper coated on one side with a white wax, so that the needle of the barograph

leaves a red line on a white ground, sold in rolls and coils and to suit the type of

barograph.

BASE PAPER

This paper is generally used by a converter to either coat or laminate. Different grades are

available for different applications.

Used For : Mostly used for converting into a value added grade

BATTERY JACKET

Used For : Used for Laminates, tube making and defence applications.

BEEDI WRAP PAPER

Used For : Used for decorative purposes in different colours.

BIBLE PAPER

Thin white opaque heavily loaded, used for printing bibles. Not suitable for pen and ink,

because of its absorbency.

71

BLADE WRAPPER (SS)

Used For : Used for making of small packs for keeping razor blades.

BOND PAPER

This paper has good strength properties, good stiffness and good aesthetical look. The

name "bond" was originally given to a paper which was used for printing bonds, stock

certificates, etc. Important characteristics are finish, strength, and freeness fro

Used For : Mostly used for letterheads and for image building stationery

BOOK PAPER

A general term used to define a class of papers used by the book publishing industry;

most commonly used for the book text paper but also for book cover paper.

BUSINESS FORMS PAPER

Paper made for the manufacture of business forms.

Used For : Used for business forms and data processing such as computer printouts.

CARBON BASE

Carbon is normally manufactured in lower grammages like 20 gsm or less. The most

important property in this paper is porosity which should be controlled at about 15-20

ml/min, so that absorption leads to cost increase while less absorption makes poor quality

of carbon paper which is used many a time.

72

CARBON PAPER

This thin paper could be either coated on one side or both sides with dry impressionable

ink. The main function being to impart an identical copy of the original on the substrate.

Used For : Mostly used where more than one copy is required simultaneously.

CARBONLESS PAPER

Paper stock specially treated or coated to provide copies without the use of interleaved

carbon. The copy process requires mechanical pressure such as from writing or typing

and sometimes a chemical reaction.

Used For : Application forms, computer stationery, time saving stationery. Also used in

copying applications without carbon paper.

CARDBOARD

A range of various boards such as pulp board, paste board, bristol board, ivory board, art

board, chromo board in the form of a coherent sheet or web used for printing, packaging,

decorating etc.

CAST COATED PAPER

A coated paper with high gloss and absorptivity in which the coating has been allowed to

harden or set while in contact with a mirror like polished chrome surface.

CHROMO PAPER

China clay (kaolin) coated on one side. The coating on one side could be glossy or matt

as per requirement of the customer.

73

Used For : Mainly used for self adhesive stickers, calendars , posters, labels and for

applications where only one side has to be printed

CIGARETTE SLIDE

Used For : Used for making of Cigarette Slides (180-200 gsm).Pulp board are multi layer

boards can be used

CIGARETTE TISSUE

It is a product of fashion. Hence brightness and whiteness of paper needs to be

maintained. It is highly technical.

Used For : Used in bobbins of 25 mm width or so.

CINEMA POSTER

Used For : For printing Cinema posters, Wall papers

CLAY COATING BASE PAPER

Used For : Used for coating with Clay for making chromo and art paper

COATED PAPER

Paper could be coated on either or both sides. Coating applied on the paper could be as

per the requirement. For example, china clay coating for glossy paper used for high

quality printing or gum coated paper for use of printing stamps

Used For : Could have different applications for different coated papers

74

COPIER PAPER

Mainly used for copying. Used extensively in photocopiers, plain paper faxes, etc. and

other office stationery. Thickness could range from 70 GSM onwards.

Used For : Copying, typing, plain paper faxes, general stationery

CREAMWOVE PAPER

Used For : Used for Computer Stationery purposes.

DEFENCE KRAFTS

Used For : Used for Laminates, tube making and defence applications.

DIARY PAPER

Used For : Used for making of diaries and sometimes for book printing and other

applications.

DIAZO BASE PAPER

The process involves coating of paper with Diazo solutions and a coupler. This is

exposed to ultra violet rays coming through the image. The final print is developed by

making the coating alkaline. In some cases it is developed by ammonia vapour.

Used For : Used for making of ammonia paper for image recording.

ELECTRICAL INSULATING PAPERS

Used For : Used for Electrical insulation.

75

EXTENSIBLE SACK KRAFT

This paper is characterised by very high stretch and high capability to absorb tensile

energy.

Used For : Used for packaging in sacks, the bulk commodities.

FAX BASE PAPER

It is first coated with photo conductive zinc oxide on which images exposed. Hence

electrical conductivity / resistivity is to be controlled to ensure that the image is not

conducted through the paper to the other side

Used For : For making Fax images

FLEXIBLE CARTON BOARD

Used For : Used for making Flexible Cartons.

FLUORESCENT PAPER

Used For : Used for Labels, Posters and decorative applications.

FLUTING MEDIUM

Used For : Used for Corrugated Board manufacturing.

FOIL BASE POSTER, BOARD

Paper is laminated with metal foil using a suitable adhesive. Hence paper must have

porosity to accept glue.

Used For : Used for lamination of paper with metal foil.

76

GENERAL WRITING PAPER (NOTE BOOK)

Paper used for Note Books should have excellent bulks because note book should appear

bulky, as otherwise it will be perceived as having less number of pages. Another

important factor is cobb, since writing ink must go into the paper instantly and dry.

Used For : Used for note books.

GLASSINE PAPER

These papers are characterised by very low porosity (air permeability less than 10 cubic

cm min. Preservation of aroma and perfection against attack of external environment to

the packed contents are also important qualities of the subject papers.

Used For : Used for food packagings and other special wrapping applications.

GREASEPROOF PAPER

These papers are characterised by very low porosity (air permeability less than 10 cubic

cm min. This gives resistance to grease and moisture. Preservation of aroma and

perfection against attack of external environment to the packed contents are also

important qualities of the subject papers.

Used For : Used for food packagings and other special wrapping applications.

GYPSUM BOARD

Used For : This is used for making panel boards for interior partitions, false ceiling etc.

ICE CREAM CUP

Used For : Used for making Ice Cream Cups.

77

INTER LEAVING KRAFT

Used For : Inter Leaving Kraft is used for separation of steel sheets in a stack.

KITE POSTER

Used For : Used for decorative, purpose, Kites

LABEL PAPER

Labels are normally printed on offset machine. Hence good wax pick is required. Wire

side of the paper used for application of gum should have adequate porosity. Good

printability, compressibility, absorbency and ink hold out give satisfactory printing.

Used For : Used for printing of labels in multi colour.

LASER PAPER

Used For : Used for printing purposes where Laser beams are used.

LINER BOARD

Used For : Used for Corrugated Board manufacturing.

METALISATION BASE PAPER

Used For : Used for vacuum metalisation for packaging applications.

MICR CHEQUE PAPER

MICR stands for Magnetic Ink Character Recognition. Codes, figures and words are read

by computer by magnetic field created on them. By careful formulations the paper is

designed to react against a wide range of ink eradicators. It gives a characteristic coloured

78

stain of "flare up" on contact with acid, alkali, bleach and organic solvents like acetone,

benzene, ethanol.

Used For : Used in making of cheques which are processed by computer.

MULTI PART STATIONERY

Used For : Multi part stationery paper is used for computer applications where number of

copies are printed in one attempt.

NEWSPRINT

It has to be made with adequate strength properties and surface characteristics; especially

wax pick. Optical properties brightness is required for better readability and appeal (with

ink to paper contrast which improves readability of print) and opacity.

Used For : Used for printing our daily news papers and associated issues. It is used under

very stringent shop-floor conditions by the news paper blouses for printing our daily

news papers and associated.

ONE TIME CARBON (OTC) PAPER

A carbon paper intended to be used once as opposed to many times or multiple use

carbon papers.

Used For : Mostly used in multi-part continuous stationery.

POLY EXTRUSIN BASE PAPER

Used For : Used for Poly Extrusin for packaging.

79

SANITARY TISSUE

Sanitary Tissues are made with rag pulp content in lower grammages from 5 gsm

onward. Normal gsm range is 15 to 30. These papers are made in soft loosely felted

conditions in order to obtain max. absorbency so that they can take water quickly and

hold it after absorption. Made with high content of Alpha Cellulose or Rag %, they are

treated with wetting agents to improve absorbency.

Used For : Used as Paper Towels, napkins, toilet tissues etc.

SHELL BOARDS

Used For : Used for making of Cigarette Slides (180-200 gsm).Pulp board are multi layer

boards can be used

SOAP WRAPPER POSTER (ARSR)

Used For : Used for Wrapping of Soaps and detergents.

SOAP WRAPPER POSTER (TDL)

Used For : Used for Wrapping of Soaps and detergents.

TEA BAG PAPER

Used For : Used for retail packing of tea.

TEXTILE TUBES AND CONES

Used For : Used for Laminates, tube making and defence applications.

80

TWIST WRAP TISSUE

It possess properties of with standing breaking stress when twisted during packing of

toffees. High bursting strength combined with excellent machine runnability makes it

suitable for special packing operations which require papers with high twisting

properties.

Used For : It is used in packing of pharmaceutical products after poly lamination or

coating.

WALL PAPER

Coated with multiple colours or floral designs.

Used For : Used as an alternative to paint. To give better aesthetic appeal to the walls.

YELLOW PAGES

Paper used for this needs to have high bulk (1.1 to 1.2), high tensile strength of about 2

kg/15 mm in MD and good opacity (90%) so that the fine print made on thin paper like

40 gsm would be readable on both side. Excellent reel build up is required for smooth

feeding during printing. This requires every uniform profile of bulk, gsm, caliper,

moisture etc.

Used For : Used for printing classified addresses and information in telephone directory.

TYPES OF PAPER

Paper is often characterized by weight. The weight assigned to a paper is the weight of a

ream (500 sheets) of varying "basic sizes", before the paper is cut into the size it is sold to

end customers.

81

DENSITY OF PAPER

The density of paper ranges from 250 kg/m3 (16 lb/ft3) for tissue paper to 1500 kg/m3

(94 lb/ft3) for some speciality paper. Printing paper is about 800 kg/m3 (50 lb/ft3).

SOME OTHER TYPES OF PAPER

Bank Paper

Bond Paper

Book Paper

Construction Paper/ Sugar Paper

Cotton Paper

Electronic Paper

Fish Paper (Vulcanized fibres for electrical insulation)

Ink jet Paper

Kraft Paper

Laid Paper

Leather Paper

Mummy Paper

Tyvek Paper

Paper Towels

Wall Paper

Washi

Wax Paper

Wet and Dry Paper

Wove Paper

Coated Paper: glossy and matt surface

82

BANK PAPER

Bank paper is a thin strong writing paper of less than 50g/m2 commonly used for

typewriting and correspondence.

BOND PAPER

Bond paper is a high quality durable writing paper similar to bank paper but having a

weight greater than 50 g/m2.It is used for letterheads and other stationery and as paper for

electronic printers. Widely employed for graphic work involving pencil, pen and felt-tip

marker. It is largely made from rag pulp which produces a stronger paper than wood

pulp.

BOOK PAPER

A book paper (or publishing paper) is a paper which is designed specifically for the

publication of printed books. Traditionally, book papers are off white or low white papers

(easier to read), are opaque to minimize the show through of text from one side of the

page to the other and are (usually) made to tighter caliper or thickness specifications,

particularly for case bound books. Typically, books papers are light weight papers 60 -

90gsm and often specified by their caliper/substance ratios (volume basis).

CONSTRUCTION PAPER / SUGAR PAPER

Construction paper or sugar paper, is a type of coarse colored paper typically available in

large sheets. The texture is slightly rough, and the surface is unfinished. Due to the nature

of the source material from which the paper is manufactured, small particles are visible

on the paper’s surface.

83

COTTON PAPER

Cotton paper is made from 100% cotton fibers. Cotton paper is superior in both strength

and durability to wood pulp-based papers, which may contain high concentrations of

acids.May also be known as cotton rag or ragged paper.

Cotton fiber papers is known to last several hundred years without fading, discoloring, or

deteriorating; so is often used for important documents such as the archival copies of

dissertation or thesis. As a rule of thumb, each percentage point of cotton fiber, a user

may expect one year of resisting deterioration by use (the handling to which paper may

be subjected).(reference - Southwest Paper Co). Legal document paper typically may

contain 25% cotton.Cotton paper is also used in banknotes.

ELECTRONIC PAPER/ E- PAPER

Electronic Paper is a display technology designed to mimic the appearance of ordinary

ink on paper.Electronic paper reflects light like ordinary paper and is capable of holding

text and images indefinitely without drawing electricity, while allowing the image to be

changed later.E-paper can be crumpled or bent like traditional paper. Pixels on e-paper

are image stable, or bistable, so that the state of each pixel can be maintained without a

constant supply of power.

INKJET PAPER

Inkjet paper is paper designed for inkjet printers, typically classified by its weight,

brightness and smoothness, and sometimes by its opacity.

PHOTO PAPER

Photo paper is a category of inkjet paper designed specifically for reproduction of

photographs. The best of these papers, with suitable pigment-based ink systems, can

match or exceed the image quality and longevity of traditional materials used for printing

color photographs, such as Fuji CrystalArchive (for color prints from negatives) and

84

Cibachrome/Ilfochrome (for color prints from positive transparencies). For printing

monochrome photographs, traditional silver-based papers are widely felt to retain some

advantage over inkjet prints.

KRAFT PAPER

Kraft paper is paper produced by the Kraft process from wood pulp. It is strong and

relatively coarse. Kraft paper is usually a brown colour but can be bleached to produce

white paper. It is used for paper grocery bags, multiwall sacks, envelopes and other

packaging.

LAID PAPER

Laid paper is a type of paper having a ribbed texture imparted by the manufacturing

process.Laid paper is still commonly used by artists as a support for charcoal drawings.

TYVEK / TYVEX

Tyvek is a brand of flash spun high-density polyethylene fibers, a synthetic material; the

name is a registered trademark of the DuPont Company. The material is very strong; it is

difficult to tear but can easily be cut with scissors or any other sharp object. Water vapor

can pass through Tyvek, but not liquid water, so the material lends itself to a variety of

applications: medical packaging, envelopes, car covers, air and water intrusion barriers

(housewrap) under house siding, labels, wristbands, mycology, and graphics. Tyvek is

sometimes erroneously referred to as "Tyvex."

PAPER TOWEL

A paper towel is a disposable product made of paper. It serves the same general purposes

as conventional towels, such as drying hands, wiping windows and dusting. Because

paper towels are disposable, they are often chosen to avoid the contamination of germs.

85

WALL PAPER

Wallpaper is material which is used to cover and decorate the interior walls of homes,

offices, and other buildings; it is one aspect of interior decoration. Wallpapers are usually

sold in rolls and are put onto a wall using wallpaper paste. Wallpapers can come either

plain so it can be painted or with patterned graphics. Wallpaper printing techniques

include surface printing, gravure printing, silk screen-printing, and rotary

printing."Wallpaper" is also a term for computer wallpaper.

WASHI

Washi or Wagami is a type of paper made in Japan. Washi is commonly made using

fibers from the bark of the gampi tree, the mitsumata shrub (Edgeworthia papyrifera), or

the paper mulberry, but also can be made using bamboo, hemp, rice, and wheat. Washi

comes from wa meaning Japanese and shi meaning paper, and the term is used to

describe paper made by hand in the traditional manner.Washi is generally tougher than

ordinary paper made from wood pulp, and is used in many traditional arts.

WAX PAPER

Wax paper (also called waxed paper) is a kind of paper that is made moisture proof

through the application of wax.The practice of oiling parchment or paper in order to

make it semi-translucent or moisture-proof goes back at least to medieval times. Thomas

Edison claimed to have invented wax paper in 1872, but what he really invented was a

cheap and efficient means to manufacture such paper.Wax paper is commonly used in

cooking, for its non-stick properties, and wrapping food for storage, as it keeps water out

or in. It is also used in arts and crafts.

WOVE PAPER

Wove paper is a writing paper with a uniform surface, not ribbed or watermarked.

86

COATED PAPER

Coated paper is paper which has been coated by an inorganic compound to impart certain

qualities to the paper, including weight and surface gloss, smoothness or ink absorbency.

Kaolinite is the compound most often used for coating papers used in commercial

printing. One function of coating is to protect against ultraviolet radiation.

PAPER POLLUTION

The production, use and recycling of paper has a number of adverse effects on the

environment which are known collectively as paper pollution. Pulp mills contribute to air,

water and land pollution. Discarded paper is a major component of many landfill sites,

accounting for about 35% by weight of municipal solid waste (before recycling). Even

recycling paper can be a source of pollution due to the sludge produced during deinking.

"People need paper products and we need sustainable, environmentally safe production."

The amount of paper and paper products is enormous, so the environmental impact is also

very significant. It has been estimated that by 2020 paper mills will produce almost

500,000,000 tons of paper and paperboard per year, so great efforts are needed to ensure

that the environment is protected during the production, use and recycling/disposal of this

enormous volume of material.

Pulp and paper is the third largest industrial polluter to air, water, and land in both

Canada and the United States, and releases well over 100 million kg of toxic pollution

each year (National Pollutant Release Inventory, 1996).

Worldwide, the pulp and paper industry is the fifth largest consumer of energy,

accounting for 4 percent of all the world's energy use. The pulp and paper industry uses

more water to produce a ton of product than any other industry.

87

SOURCES OF PULP MILL RELATED POLLUTION

CHLORINE AND CHLORINE-BASED MATERIALS

Chlorine and compounds of chlorine are used in the bleaching of wood pulp, especially

chemical pulps produced by the kraft process or sulfite process. Plants using elemental

chlorine produced significant quantities of dioxins. Dioxins are persistent organic

pollutants that are generally recognized among the most toxic human-released pollutants

in existence. Elemental chlorine has largely been replaced by chlorine dioxide and dioxin

production very significantly reduced. The promise of complete removal of chlorine

chemistry from bleaching processes to give a TCF (totally chlorine-free) process, which

peaked in the mid-1990s, did not become reality. The economic disadvantages of TCF,

the lack of stricter government regulation and consumer demand meant as of 2005 only

5-6% of kraft pulp is bleached without chlorine chemicals. A study based on U.S.

Environmental Protection Agency (EPA) data concluded that "Studies of effluents from

mills that use oxygen delignification and extended delignification to produce ECF

(elemental chlorine free) and TCF pulps suggest that the environmental effects of these

processes are low and similar."

The used process water from a pulp mill contains a lot of organic material such as lignin

and other organic material from the trees (including chlorinated organic material)

resulting in high biological oxygen demand (BOD) and dissolved organic carbon (DOC).

It also contains alcohols, and chelating agents and inorganic materials like chlorates and

transition metal compounds. Recycling the effluent (see black liquor) and burning it,

using bioremediation ponds and employing less damaging agents in the pulping and

bleaching processes can help reduce water pollution.

SULFUR, HYDROGEN SULFIDE, AND SULFUR DIOXIDE

Sulfur-based compounds are used in both the kraft process and the sulfite process for

making wood pulp. Sulfur is generally recovered, with the exception of ammonia-based

88

sulfite processes, but some is released as sulfur dioxide during combustion of black

liquor, a byproduct of the kraft process, or "red liquor" from the sulfite process. Sulfur

dioxide is of particular concern because it is water soluble and is a major cause of acid

rain. In 2006 the pulp and paper industry in Canada released about 60,000 tonnes of

sulfur oxides (SOx) into the atmosphere, accounting for just over 4% of the total SOx

emission from all Canadian industries.

A modern kraft pulp mill is more than self-sufficient in its electrical generation and

normally will provide a net flow of energy to the local electrical grid. Additionally, bark

and wood residues are often burned in a separate power boiler to generate steam. If the

harvested trees are replanted a kraft mill can be carbon-neutral, but reforestation has been

criticized for reducing biodiversity.

Air emissions of hydrogen sulfide, methyl mercaptan, dimethyl sulfide, dimethyl

disulfide, and other volatile sulfur compounds are the cause of the odor characteristic of

pulp mills utilizing the kraft process. Other chemicals that are released into the air and

water from most paper mills include the following:

carbon monoxide

ammonia

nitrogen oxide

mercury

nitrates

methanol

benzene

volatile organic compounds, chloroform.

MECHANICAL PULP MILLS

Wood pulp produced primarily by grinding wood is known as "mechanical pulp" and is

used mainly for newsprint. These mechanical processes use fewer chemicals than either

89

kraft or sulfite mills. The primary source of pollution from these mills is organic material

such as resin acids released from the wood when it is processed. Mechanical wood pulp is

"brightened" as opposed to bleached using less toxic chemicals than are needed for

chemical pulps.

PAPER MILL POLLUTION

It is a common misconception that all mills are "pulp and paper" mills. This is true only

for "integrated mills" that consist of both a pulp mill and a paper mill on the same site.

While pulp mills are often conspicuous by their size and odor, paper mills are often

indistinguishable from factories seen in most communities. The major effluent from a

paper mill is a suspension of paper fibers in water and it is in the mill's best interest to

keep such fiber loss to a minimum since any lost fiber translates to lower paper

production.

THE FUTURE OF PAPER

Some manufacturers have started using a new, significantly more environmentally

friendly alternative to expanded plastic packaging made out of paper, known

commercially as paperfoam. The packaging has very similar mechanical properties to

some expanded plastic packaging, but is biodegradable and can also be recycled with

ordinary paper.

With increasing environmental concerns about synthetic coatings (such as PFOA) and the

higher prices of hydrocarbon based petrochemicals, there is a focus on zein (corn protein)

as a coating for paper in high grease applications such as popcorn bags.

Also, synthetics such as Tyvek and Teslin have been introduced as printing media as a

more durable material than paper.

90

CHAPTER 4

STUDY OF LEADING FIVE COMPANIES

CENTURY PULP AND PAPER(CPP)

Century Pulp and Paper(CPP) a division of Century Textile and Industries Ltd (CTIL) is

manufacturer of Rayon Grade Pulp (RGP) and an exhaustive range of excellent quality of

Writing & Printing Paper. The unit successfully achieved significant efficiencies in

various disciplines within a short span of time. Located at Lalkua (District Nainital,

U.K.), CPP has provided direct and indirect employment to the people of the surrounding

areas.

Century Pulp and Paper(CPP) a division of Century Textile and Industries Ltd (CTIL) is

manufacturer of Rayon Grade Pulp (RGP) and an exhaustive range of excellent quality of

Writing & Printing Paper. The unit successfully achieved significant efficiencies in

various disciplines within a short span of time. Located at Lalkua (District Nainital,

U.K.), CPP has provided direct and indirect employment to the people of the surrounding

areas.

BRIEF PROFILE

Century Pulp & Paper (an ISO-9001:2000 & ISO-14001:2004 certified Division of

Century Textiles and Industries Ltd.) , a Division of Century Textiles and Industries Ltd.

is a member of B.K. Birla Group of Companies. The company chairman is Syt. Basant

Kumarji Birla. Established in 1984, the Division is situated at Lalkua on the Bareilly-

Nainital Highway. The Head Office of the Division is on the 11th Floor of Industry

House, 10, Camac Street, Kolkata.

91

Product range of the CPP comprises a vast range of quality Writing & Printing Paper and

superior quality dissolving Rayon Grade Pulp used for Viscose/Staple fiber/filament

yarn. It has other uses in preparing urea, formaldehyde, melamine formaldehyde and

phenol formaldehyde.

CPP has a well equipped and planned department for Environmental Conservation and

Pollution Control. CPP pays sincere attention to the overall development of its employees

and that of the community. It also has a well organized HRD Department for supervising

these activities. CPP maintains an excellent infrastructural set up with modern facilities in

order to carry out organizational activities.

Century Pulp & Paper is the recipient of the following awards

Eco-Mark by BIS for its Bagasse based products.

Central Pollution Control Board and National Productivity Council have selected

the company as a “Model” unit in the field of “Waste Minimization” among pulp

and paper industries.

CPP’s Effluent Treatment Plant has been selected by Central Pollution Control

Board for carrying out studies and data collection for preparation of Minimal

National Standards (MINAS) for large pulp and paper industry group.

CPP’s waste reduction schemes have been included in the “World Bank” – Data

Base on Waste Minimisation.

Awarded Indo German Greentech Award for Environment Excellence for the year

2000-01.

CPP was awarded ‘First Prize’ at All India Farmer’s fair for the year 2004-2005

for its significant efforts towards farm forestry.

CPP was adjudged as the “Efficient Unit” in energy conservation by CII for the

year 2004-2005

92

CPP was awarded “First Prize” for energy conservation by Indian Paper Makers

Association as well as the “National Award” for Energy Conservation in Pulp & Paper

Sector by the Hon’ble Prime Minister of India for the year 2004-2005.

VISION

Our vision for the millennium remains manufacturing of international quality products at

optimum cost in consistence with the physical and psychological environment best

suitable for customers and stakeholders.

CONCRETE VISION ELEMENTS

Product quality

Safety and Environment

Satisfaction of customer and stakeholders

Cost Effectiveness

Energy conservation

BUSINESS STRENGTHS

Century Pulp and Paper is the manufacturer of Rayon Grade Pulp, Wood based Writing

Printing Paper & Bagasse based Writing Printing Paper. CPP employs around 2500 well

trained manpower including 700 staff and 1800 workmen.

CPP SPECIALTIES IN MANUFACTURING

Wide variety of quality writing printing paper (agro based) with Bagasse as raw

material.

Best quality photocopiers paper which has been highly appreciated in the market,

both international and domestic.

93

The mill established at Lalkua is unique because :-

It is the only mill in the world producing both rayon grade pulp, wood-based

paper and bagasse based paper.

The level of control instrumentation is relatively high.

CPP is the first mill in the world to use ClO2 for bagasse pulp bleaching.

The mill features a unique pile building system for preventing deterioration of

stored bagasse fiber. Bagasse fiber fed to the digester has a high fiber pith ratio

(more than 5:1).

CPP’s farm forestry scheme ensures that raw material is cultivated and

replenished. CPP is the driver for good forestry management and manages socio-

forestry nurseries for cultivation and distribution of plant saplings.

The mill has a well equipped laboratory to monitor various water and air pollution

control measures including AOX level.

MARCHING AHEAD

CPP has embarked on a prestigious green field expansion programme to implement a

modern technology paper manufacturing unit of 250 TPD based on Secondary Fiber

including de-inking plant.

FINANCIAL HIGHLIGHTS

Value in INR (Crores) Value in US$ (million)Year (2002 – 03)Turnover 463.78 103.06Profit 4.43 0.98Year (2003 – 04)Turnover 497.66 110.59Profit 30.53 6.78Year (2004 – 05)Turnover 556.35 123.63Profit 30.41 6.75

94

PRODUCT

PRODUCT 1

CPP’s range of products includes some of the finest varieties of writing and printing

paper which has carved a niche in the market.

CPP also manufacturers raw material for viscose filament yarn/staple fiber and also paper

grade pulp.

A. Writing and Printing Papers (45 to 210 gsm)

(Wood based)

Azurelaid

Maplitho White/NS

Maplitho Deluxe CG

SS Maplitho

Dye line base

Offset printing paper

Maplitho NS (ARSR)

Century Parchment

Super Printing

Century Bond

Railway Bond

Copier

Continuous Stationery (HB)

Base Paper for coating

Plain Paper

Opaline Base Paper

Overlay tissue

Century Maplitho

95

NCR Base Paper

MICR Cheque Paper

Color Ptg Paper

Century Excel Ptg

Century Index Paper

Broke cover MF – Sticker Base

(BAGASSE PLANT)

Copier

Super Maplitho white

Super shine Printing

B. Rayon Grade Pulp

C. Bleached Hardwood Pulp (Paper Grade)

PRODUCT 2

PACKING DETAILS

Pulp Sheets of Size 80+ 60 cms. Packed in Bales with strong wropper & tied with steel

wires by Automatic Tying Machine. Bale Wt : 175 Kgs.

CPP is following IS specification for its entire range of product. However, various

properties can be custom made to meet the customer requirement.

MESSAGE TO THE INTERNATIONAL AUDIENCE

At Century Pulp & Paper, we do not confine ourselves to manufacturing

superior quality products. Besides catering to the society, we also take deep

interest in maintaining the ecological balance i.e. restoring natural resources. We

have explored the natural world and have associated it with the main streamline of

96

our business. Since our main thrust is on export, we have chosen the net as the

best medium to connect to our international friends. We wholeheartedly welcome

business enquiries from your end and look forward to a long-lasting relationship.

Century Pulp & Paper, is headed by dynamic and experienced people from

different fields. Their rich experience and expertise has enabled the organization

to operate successfully over the years and deliver to the society the best of

products. Maintaining a perfect balance between the society and nature has been

the key word in Century since its inception and retaining it over the years goes to

the credit of the excellent management skills of the people managing the

company.

QUALITY CONTROL

Century Pulp and Paper, Lalkua has well organized laboratory equipped with modern

pulp and paper testing equipments including Autoline from L&W Sweden, Qualified and

experienced staff manage the quality control department.

For all inputs fibrous/non fibrous, in-process material (digester section, bleaching section,

stock preparation); finished material (Paper/Pulp) at paper machine rewinders/cutters,

finishing house and Godowns, standards/ specifications are followed as per guidelines of

ISO-9001:2000) quality system (quality Inspection Plant).

Inputs and Finished product is allowed only after conforming to standards.

Testing/analysis is carried out as per TAPPI/ISO standard.

A separate customer cell has been formulated to redress customer grievances and

recourse to quick solutions. This cell understands changing needs of customers, caries out

periodical market research to improve customer-choice process and also monitors

competitor moves

97

PRODUCTION PROCESS

PROCESS

CPP is the first large pulp and paper mill in India, who had not only floated the idea of

consuming bagasse for manufacturing Quality paper but also gave concrete base to its

idea in the form of Bagasse Unit. The Bagasse Unit of CPP was commissioned in early

1995 with a capacity of 211 TPD for manufacturing quality paper. The salient features of

bagasse unit are latest bagasse handling, pulping and paper making technologies.

Bagasse handling, moist depithing, pile

building reclaiming and washing

Beloit UK.

Bagasse cooking continuous digester, cold

blow to avoid Emissions and to retain fiber

strength

Sunds

Brown Stock Washing. HDO

Screening and cleaning Ahlstrom,Finland

Bleaching system based on C/D, E/O D

sequence to attain final pulp brightness of

+88 without affecting the strength of pulp.

Sunds, Sweden

BAGASSE

Bagasse is received from the Sugar Mills either in bale form or in loose form as per the

requirement. Whole bagasse from the sugar mill is available only in the sugar cane

crushing season which is stretched over a period of maximum six to seven months only,

whereas the process of production of paper is continuous throughout the year.

98

Therefore, it is essential to store bagasse in a proper way so as to make it available for

paper making through out the year i.e. during off season without affecting the quality

Hence, the total amount of bagasse required for the production throughout the year is

carefully stored so that the production is not affected due to the shortage of bagasse

WRITING AND PRINTING PAPER PLANT PROCESS (WPP)

This integrated plant is based on Eucalyptus and Bamboo furnish to produce paper

ranging between 45 to 210 gsm.

The best selected species of Eucalyptus and other hard wood/bamboo which are locally

available from nearby forest is used for pulping. Pulping process is conventional kraft

process. For high brightness and good strength pulp output latest technology of bleaching

sequences consisting of Hydrogen peroxide, chlorine dioxide & sulphur dioxide is used.

Pulp is further processed in highly sophisticated continuous stock preparation plant.

To cater to market requirement of reels and sheets facilities of winding, sheeting and

packing is available. The packing of reels & sheets is conforming to seaworthy standards

suitable for export

TECHNOLOGY

WRITING & PRINTING PAPER PLANT (WPP)

Capacity - 37250 TPA

Integrated Pulp & Paper Unit based on Eucalyptus & Bamboo Furnish.

Two Paper Machines equipped with size press.

99

Paper Grammage Range 45-210

Machine deckle 2.69 Meters

Rewinders Jagenberg

R/W speed 1000 m/min

Cutters 1.45 m width with 200 m/min. speed

BAGASSE PAPER PLANT

CPP has recently commissioned Bagasse Paper Plant to manufacture 211 TPD quality

paper based on Bagasse furnish. The salient features of the project are the latest pulping

technology involving oxygen bleaching and a comprehensive computer-aided control

system.

Bagasse handling,depithing, pile building

Reclaiming & Washing.

Beloit Corporation, U.K.

Bagasse cooking: continuous digester cold

Blows to avoid emissions and to retain

Fiber strength.

Sunds Defibrator, Sweden

Brown stock washing & deckering. Hindustan Door-oliver

Screening & Cleaning AhlstromCorpn.Finland

Bleaching System based on D/C-E/O–D

Sequence to attain final pulp brightness of

88(+).

Sunds Defibrator, Sweden

Paper Machine Equipped with Film-Press for on-line

coating Voith-Sulzer, Germany

Capacity 84600 TPA

Deckle 5.2 MTR

Qualities Fine varieties of writing & printing paper

53-130 GSM including light weight coated

varieties copier.

Slitters & Cutters Jagenberg, Germany

100

RAYON GRADE PAPER PLANT/PAPER GRADE PULP

Based on Eucalyptus furnish

Bleaching sequence includes Chlorine-Di-

Oxide treatment

Sheeting Machine with 105 TPD capacity

(Carmano, Italy)

Deckle 2.4 Meters with on-machine cutters

and Bailing Press

POWER BLOCK

3 Nos. AFBC Coal Fired Boilers 23T/Hr (47 ata, 420° C)

1 No. Spreader Stroker Coal Fired 25T/Hr (47 ata, 420° C)

2 Nos. AFBC Coal Fired Boilers 50T/Hr each (53 ata, 480° C)

BHEL Recovery Boiler 325 Tons/day dry solids (47 ata, 420° C)

ABL Recovery Boiler 350 Tons/day dry solids (63 ata, 480° C)

6.8 MW BHEL TG Set Extraction Back Pressure

21 MW TDK TG Set Double Extraction, Condensing

DG Sets 3 x 1450 KVA

Grid Power available 132 KVA 10 MVA at (Maximum demand)

Producer Gas Plant An innovation and pioneering project

implemented to substitute RFO in Lime

Kiln.

CPP has also undertaken a project to generate green power by installation of a Boiler

dedicated on Bio-fuels.

101

COMPANY POLICY

We at Century Pulp and Paper are committed to strengthen our position as market leader

in manufacturing of writing and printing paper and rayon grade pulp by developing a

company wide culture that promotes :

Customer delight

Quality, Environment, Safety and Information Security initiatives

Environment friendly, Safe and Energy efficient operation

Protecting Information of all Stakeholders

We will continuously pursue for :

Continual improvement in our products, processes & services in all areas.

Protecting information assets and customer information from all threats through

the implementation of suitable information security management systems.

Remain incompliance with applicable legislations.

Communicate and reinforce this policy through out the company.

This policy is made available to employees and on request to interested parties.

EXPORT FIGURES

MAJOR COUNTRIES EXPORTED

Major countries to which Century has exported during the year 99-00 are UAE,

Singapore, Sri Lanka, Egypt, Bangladesh, Nepal & Myanmar.

COUNTRIES EXPORTING CURRENTLY

CPP is currently exporting to UAE, Singapore, Sri Lanka, Egypt, Bangladesh & Nepal,

Myanmar, Malaysia, South Africa, Malta, Tanzania and Austria.

SEEKING EXPORT ENQUIRIES

CPP is currently seeking export enquiries from all over. The company wholeheartedly

welcomes innovative ideas and productive schemes.

102

JK PAPER LIMITED

JK Paper Ltd. is among India’s foremost paper manufacturers. It is part of one of

India’s leading Business Houses – JK Organisation, which has a significant presence in

Automotive Tyres, Cement, V-Belts, Oil-Seals, Agri-seeds and Pulp & Paper.

JK Paper Ltd., India’s largest producer of Branded papers is a leading player in the

Printing and Writing segment. It operates two plants in India, one in the East – JK Paper

Mills (JKPM) in Rayagada, Orissa with a capacity of 125,000 tonnes per year and the

other in the West – Central Pulp Mills (CPM), located in Songadh, Gujarat with a

production capacity of 55,000 tonnes per year. Both plants are ISO 9001 – 2000 and

ISO 14001 certified and operate at around 120% capacity utilization. The aggregate

annual output is over 180,000 tonnes per year of Paper and Pulp, using contemporary

technology. The Company has commissioned a 46,000 TPA state-of-the-art Coating

Plant at its JKPM unit in July 2005. This facility employs superior blade coating

technology to produce international quality coated art paper and boards, being marketed

in the brand name of JK Cote. About 40% of paper produced by the Company is sold

under various brand names, JK Copier, JK Excel Bond, JK Bond, JK Savannah, JK

Copier Plus and JK Easy Copier. Being the largest selling branded copier paper in

India, JK Copier is the Company’s flagship brand. The other major product is JK

Maplitho, a superior uncoated Writing and Printing paper. The Company sells through a

nationwide distribution network of over 120 distributors and 2500 dealers.

JK Paper enjoys highest Operating Margins and Highest Net Sales Realization (NSR) in

over 90% of the products it sells, amongst the paper mills across India. It is the only

Company in the industry with such a large share of branded products in its portfolio.

The Company passionately believes in Environment and Safety and has been

introducing cleaner and environment-friendly technologies. JK Paper Mills at Rayagada

has been adjudged as the Greenest Paper Mill in India.

103

The Company’s plantations, driven by in-house research programme, have covered more

than 45,000 hectares of land over the years. By providing farmers high quality plant

species through the Company’s plantation research centre, it is helping the farmers to

improve their economic well being. Very large number of farmers in the states of Orissa,

Chhattisgarh, West Bengal, Andhra Pradesh, Gujarat and Maharashtra are benefiting

from this programme. The plantation with its superior quality plants contribute towards a

strong base for high quality raw materials. The Company is also implementing TPM with

the help of Japan Institute of Plant Maintenance. The Company has an export footprint

for high value branded products in the Middle East, South East Asia, SAARC and various

African countries.

MANUFACTURING FACILITIES

JK Paper has two large integrated paper manufacturing plants - Paper Mills in the Eastern

part in the State of Orissa with 1,25,000 tons coated, uncoated and market pulp

manufacturing capacity; and Central Pulp Mills in the Western part in the State of Gujarat

with 55,000 tons paper and market pulp manufacturing capacity. Both the mills

manufacture premium grade writing and printing papers largely branded.

JK Paper Mills

JK Paper Mills, a Unit of JK Paper Ltd. is a premier integrated Pulp and Paper Mill

located at Jaykaypur, Dist. Rayagada, Orissa. Since its inception, JK Paper Mills has

strived for excellence and consistently set high standards in quality, productivity,

conservation of energy and water, industrial safety as well as pollution control and

environment protection which are indicated by achievements like:

Manufacture of surface sized Maplitho for the first time in the country with

indigenous raw material.

Capacity utilization of 120%.

First Paper Mill in India to get ISO 9001 and ISO 14001.

104

Adjudged First Greenest Paper Mill in India in 1999.

Most modern and largest pulp mill in the country.

JKPM was commissioned in the year 1962 with an integrated pulp and paper plant

with 15000 TPA installed capacity for manufacturing high quality writing and

printing papers. Over the years, the production capacity has been enhanced to a level

of 127,000 TPA with the addition of 4 more paper machines manufacturing

diversified product range from 29 GSM to 300 GSM of different grades of paper. In

2005, an offline coating machine has also been set up to manufacture premium grades

of coated papers.The secret of success of the mill is attributed to its policy for

sustained efforts for quality, new product development and continuous offering of

value added products to customers.

The company was a pioneer to introduce in market a surface sized finished paper - JK

Maplitho - equivalent to uncoated woodfree printing paper in international parlance.

Since then JKPM has further consolidated its position in the market and has

established itself as a brand leader in different varieties of writing and printing papers

like JK Copier, JK Copier Plus, JK Bond, JK Excel Bond, Super Hibrite (SHB)

Maplitho and JK Cote premium coated paper and board. All these brands are

extremely popular papers in the market place throughout the country and are

invariably the first choice of the consumer.

OUR PHILOSOPHY

At JK Paper, we believe that leadership is not merely a matter of size. With leadership,

comes theresponsibility to drive growth in all its possible dimensions. Leadership

demands transformation. The ability to constantly move up the value chain from what is

to what can be. And to that extent, leadership shapes the very quality of growth.

105

Growth needs to be viewed in a holistic manner. At JK Paper, it is this ceaseless quest for

holistic growth that has shaped our operations in the present as well as influenced our

investments in the future - in world-class technologies for enhancing our customer

experience, besides enabling us to fulfill our social responsibilities.

At JK Paper, technology up-gradation has meant more than just better business sense. We

have moved beyond enhanced productivity, wider product range and better value, to

investing in and nurturing a future ready organization that is driven by its two core

growth engines Customers and Environment.We firmly believe that much more than the

technology, it’s how well equipped we are to harness it, that determines the road to

transformation. And therefore, our investments are focused on continuous and consistent

up-gradation of processes, people and nature. Be it converting wastelands into productive

plantations to produce world-class pulp, or scouting for and mentoring professionals who

can drive the technology movement at JK Paper.

JK PAPER & TECHNOLOGY

Over the last decade the constant endeavour of JK Paper has been to upgrade its

manufacturing processes at grass-root levels to help create customer value. Be it the most

modern Pulp Mill or an automatic cut-size line for branded products, it has been a saga of

continuous process development with an eye on the customer.

JK Paper Ltd. has always leveraged technology for constant product upgradation and has

been a pioneer in many arenas, of the paper industry. Some of the landmarks which JK

Paper achieved much before the rest of the Indian paper companies are:-

• First to introduce Surface Sized Woodfree Paper

• First Paper Mill to get ISO 9001 certification.

• First Paper Mill to get ISO 14001 certification.

106

These pioneering moves have given JK Paper pride of place as the change leader,

ushering in a phase of complete makeover in the Indian paper market. On the pathway of

moving focus from commodity to branded and high value categories, JK Paper Ltd. has

undergone major technical upgradation in the machines and processes for manufacturing

paper.

The Company has taken a major initiative to deliver world-class service through

implementation of an Enterprise Resource Planning system. This transformational

technology will bring in best practices across all functions of the organization to deliver

highest value to all external and internal customers.

Continuing the chain of constant technological development our operational state-of-the-

art Coated Paper manufacturing facility at Jaykaypur, Orissa, is driving the next big

revolution in the Indian paper industry. The project to manufacture high quality coated

paper was completed in a record time of just 15 months from Concept to Commissioning.

The plant manufacturing coated paper owes the excellence achieved in manufacturing

coated paper to its fully automated coating colour kitchen that ensures world-class

quality. Besides the advantage of using the high quality base paper made in-house at JK

Paper Mills, it derives its strength from the well controlled, feature- laden coating plant

with features like three-stage online controls for GSM, coat weight, moisture etc. It is

also equipped with electronic controls for cross profile and gloss. On the other hand, due

attention has been given to the finishing and packaging end by installing state-of-the-art

synchro fly sheet cutters, ensuring perfect cutting and finishing.

Apart from commissioning the Coating Plant, this has been a watershed year, considering

the path- breaking initiative from JK Paper in setting up a state-of-the-art Packaging

Board Plant at its Central Pulp Mills Unit, Songadh, Gujarat at a substantial Rs.235 crore

investment. This plant of 60,000 TPA capacity will be equipped with the most

107

contemporary technology sourced from global leaders like Voith of Germany and several

other leading names in the paper board machinery sector. Once again, technology will be

the key driver to revolutionize packaging in India.

JK PAPER & QUALITY

We at JK Paper have always believed that it is our customer, who is our best teacher as

he indeed, is our best critic. It is with this belief which we have always listened to him

with an open mind that has kept us constantly ahead. Clearly, it is this philosophy that has

led to the creation of the ‘Quality Culture’ placing the customer at the core of all our

business plans and strategies. Be it investments in the area of technological excellence,

continuous improvement, development of the human resource, building of brands and

customer relationships, our constant endeavour has driven us to a state of Customer

Obsession across the organization. No wonder, JK Paper Mills was the first Paper Mill in

India to attain ISO 9001 certification in 1995. Central Pulp Mills followed in 2003.

Establishing international quality benchmarks and creating customised products to meet

the unique needs of the different consumers has been the essence of our product

development activities. It is this philosophy that has led us to develop and enlarge the

range of our products and brands to meet the consumers’ needs across all quality and

price points.

In the Printing & Writing segment, our journey which began with SS Maplitho for the

specific customer needs of quality has moved on to customers of SS Maplitho SHB in the

High Bright category and subsequently to SHB Evervite for top end customers.

Over the last four decades, this journey covered several milestones, starting with products

like SS Maplitho. Ranging from the top end segment ‘JK Evervite’ to the middle segment

Maplitho SHB, it has continuously enriched its product portfolio, meeting the wider

customer requirements. Brands like ‘JK Copier Plus’, a multi purpose premium business

108

paper, ‘JK Copier’ for the mid segment high speed Copier Machines to ‘JK Easy Copier’

for the economy range, reflects the company’s diversity of product portfolio and

dominant leadership in the Branded Segment.

In the Branded water-marked segment, ‘JK Bond’, a name synonymous with the House

of JK over the years, has led to the development of premium products like ‘JK Excel

Bond’, available in international consumer friendly packs. ‘JK Savannah’ is yet another

offering of an exclusive grade of office stationery paper just introduced in select markets.

In all its product segments, JK commands an undisputed Quality leadership position in

the Industry. No wonder, with quality being a way of life at JK Paper, we do not attempt

to restrict quality to a mere definition.

JK PAPER & ENVIRONMENT

Any improvement in technology has an impact on the environment. At JK Paper, we have

always been indebted to Mother Nature and have worked ceaselessly towards employing

processes that are in sync with ecology. This passion and sense of responsibility is

evident in the various initiatives that the Company has undertaken.

Our technology based plantation movement with in-house R&D along with the

involvement of thousands of farmers across several states, has aided our plans to enhance

raw material availability, greening of surroundings and livelihood for a large number of

local population. It has been part of JK Paper’s corporate philosophy to protect the

environment through process innovations rather than end-of-the-gate treatment. The

results of our investments in environment have been widely recognized in various fora

winning us numerous awards over the years.

Rated as the Greenest Paper Mill of India (JK Paper Mills) by Centre for

Science and Environment (CSE) in their first study on paper industry (1999)

109

Again won the prestigious 3 Leaves award in 2004-05 from CSE in their second

study

ISO 14001 Environment Management System since 1998 (JK Paper Mills) –

first in India; in 2003 (Central Pulp Mills)

Beyond Plantations, the Company’s thrust on environment is also visible in various

ecofriendly processes that it employs at its Plants like the most modern Fibreline based

on latest technology (Oxygen delignification)

Today, the Company sources nearly 60% of its raw material requirement from man-made

plantations. Side by side, it also promotes social/farm forestry within a radius of 200

KMs from its plants. Till date, in excess of 48,000 Ha of land has been planted with high

yielding pulpwood species by the farmers in the adjoining areas of mill locations with the

assistance of the Company. Every year it adds another 4500/5000 Ha by distributing 30

million saplings to the farmers. Through its dedicated R&D wing, the Company has been

able to develop 6 JK Superclones for Eucalyptus, which gives 2-3 times higher yield to

the farmer.

JK Paper & People

Customer obsession is at the core of JK Paper’s mission statement. Passion to deliver

highest value to all our external and internal customers has led the Company to take

major initiatives in the direction of implementing Enterprise Resource Planning (ERP)

system in the organisation. This ERP System will tie-up the total supply chain, enabling

seamless flow of information in ‘Real time’. It will open a transparent dialogue between

the supplier and the customer, bringing in greater of efficiency, responsibility and

effectiveness to the entire system at JK Paper.

At JK Paper, we recognize the power of knowledge. Hence, extensive investments are

made toward people and people practices. Fostering the spirit of entrepreneurship among

110

these professionals has enabled JK Paper to establish the role of true leadership guiding

the future growth and development of the industry. The talent pool at JK Paper would

rank among the very best in the Indian Paper Industry today.

Today, these world-class people practices have galvanized TPM (Total Productive

Maintenance) into a Truly People’s Movement at JK Paper. A practice that is best

exemplified by JK Paper’s much acclaimed ‘Quality Circle’ practice that started way

back in 80s and actually paved way for the successful implementation of TPM. Today

JKPM Orissa alone has over 66 such quality circles that constitute of over 40%

employees, ensuring active involvement in implementation and decision making at all

employee level. At JK, you can see in practice, people of grass-root level involved

emotionally and physically to bringing up new ideas of improvement.

But, like any other movements the real momentum was fuelled from the top management,

who actually got down to the shop floor to lead by example. So whether it was about

getting involved in cleaning and maintenance of machines and equipment every morning

or helping workmen find and plug daily problems on the shop floor, the top leaders

demonstrated and practiced what they were preaching. Finally, this TPM movement has

not only helped further the cause of quality commitment but also brought about a total

transparency, Spirit of sharing and caring and willingness to continuously improve and

take on new challenges in the Organisation.

PRODUCT

OFFICE DOCUMENTATION

We offer a range of Office Documentation Papers from Economy to Premium grades.

They include Photocopy and Multi Purpose Papers for use in Desktop, Inkjet and

Laser Printers, Fax Machines, Photocopiers and Multi-functional Devices.

111

Premium Watermarked and Laidmarked Business Stationery Papers are also being

marketed to satisfy the varied needs of Corporates and Individuals.

Jk Copier Plus

Ideal for Quality Photocopying, Project Reports, Resumes, Inkjet & Laserjet printers,

Presentation copies or any aesthetic job

JK Copier

Suitable for any job on Office printers - Inkjet and Laserjet, Photocopiers and Multi-

functional Devices

Sparkle Copier

Ideal for photocopying & desktop printing

JK Copier Easy

Ideal for Photocopying

JK Excel Bond

Ideal for Letterheads, Brochures, Certificate, Presentations, Project Reports,

Envelopes, Pamphlets, Manuscript writing, Corporate Stationery

JK Savannah

Suitable for Corporate Stationery, Reports, Certificates, Presentations, Resumes,

Invitation Cards, Hotel/Airline Menu Cards, Personal Letterheads

112

UNCOATED PAPER & BOARD

Our Maplitho paper has been acknowledged in the market for its superior

performance and we offer a range of such uncoated writing & printing paper for

varied needs including the super bright JK Evervite. Apart from this, we also produce

MICR cheque paper as well as High-end Pulp Boards, Ledger Papers and Parchment

grades

JK Evervite

Features

Superior brightness (brightness value 93 plus)

Higher strength

Excellent printability

Long lasting colour and shade

End Uses

Printing of Quality Books, Calendars, Maps

Making Premium Diaries, Hi end Exercise Book, Notepads, Scribble Pad

Sizes

Available in standard folio sizes as well as special sizes on order, Also

available in Reels

GSM-60 to 100

113

JK Maplitho Paper

Features

Long lasting shade

Superior strength

Excellent dimensional stability

Trouble free Printing

Excellent Smoothness

End Uses

Printing of Books, Calendars, Maps

Making Diaries, Notepads, Scribble Pad, Exercise Book

Also used in Food grade applications

Sizes

Available in standard folio sizes as well as special sizes on order, Also available

in Reels

GSM-60 to 150

JK MICR Cheque Paper

Features

Hi Quality Paper For Cheques

Lost Lasting & Strong Paper

End Uses

Used For Making Cheques

114

Sizes

Standard Sizes in Reels & Sheets

GSM-95

Packaging Board

Range of High-end Coated Packaging Boards to service the varied needs of the

packaging industry:

JK TuffCote

JK Ultima

JK PureFil base

JK TuffPac

JK IV Board

Corporate Vision

To be a dynamic benchmark and leader in the Indian paper industry

Corporate Mission

To achieve growth and leadership through the JK brand equity, customer obsession,

technological innovation and cost leadership, with a clear focus on environment, while

continuously enhancing shareholder value

Quality Policy

To provide 'customer delight' - both internal and external - through our products and

services at lowest cost by continuous improvement in processes, productivity, quality

and management systems

115

RAMA PAPER MILLS LIMITED

Rama Paper Mills Limited was incorporated as a Public Limited Company in the year

1985 to manufacture Newsprint, Duplex Board and Writing and Printing paper by

recycling waste paper.

RMPL commissioned its duplex manufacturing unit with an installed capacity of 3300

TPA in the year 1988. It then diversified into writing and printing/newsprint paper in

1992-93. Today the total installed capacity of 3 units is 44000 TPA, located at Kiratpur,

Distt Bijnor in Uttar Pradesh. The company has further undertaken the installation of one

more unit for manufacturing Tissue & Poster Paper having capacity of 16320 TPA, thus

increasing the total capacity to 60320 TPA. The site of unit is well located; excellent

connectivity by road and rail transport makes availability of raw materials and inputs

easy and also brings finished products markets in close proximity.

The company is professionally managed by a well-qualified, highly motivated and

experienced personnel. It employs around 500 people including skilled, semi skilled and

unskilled workforce.

INFRASTRUCTURE

The site of unit is well located having all infrastructure facilities like road and rail

connections easy availability of raw material and inputs locally or from nearby areas and

close proximity to potential finished product markets

Rama Paper Mills Limited has 12 acres of land which is fully developed and in actual use

of company for its industrial activities. All the essential facilities like internal roads ,

water supply , electricity , pollution control equipments etc. are fully installed and

functional at the factory site.The company has build a residential colony for its

employees which has 36 livable units for its executive and 100 units for workers.

116

PRODUCTS

Unit-I:- A multi-cylinder mould plant to manufacture coated/uncoated varieties of

Duplex board of medium quality. This is used t make small packaging / small cartoons

used by pharmaceuticals, soaps, paste, apparels, tea and other similar industries.

PRODUCTS GSM

LWC DUPLEX BOARD 230-410

LWC PREMIUM DUPLEX

BOARD230-410

UNIT-II:- A Fourdinier wire part M.F machine to manufacture Writing/Printing ,

Newsprint and Kraft grades of paper.

PRODUCTS GSM BRIGHTNESS

DELUXE CREAM

WOVE50-80 60+

SUPER DELUXE

CREAM WOVE54-80 66+

PRIME CREAM WOVE 54-80 72+

SUPER DELUXE

NEWSPRINT48+ 60+

UNIT-III:- A high speed M.F machine to manufacture Newsprint and also capable of

making other varieties of paper such as writing / printing paper.The plant has been

117

imported from Germany through Bon Engineering-Sweden.It is a second hand

refurnished machine.

PRODUCTS GSM BRIGHTNESS

STANDARD NEWSPRINT 48 45+

DELUX NEWSPRINT 48 52+

BUSINESS ENQUIRIES

For business, product, supplies and other enquires, please contact Vice President -

Marketing at our Delhi corporate office, or mail us.

FINANCIAL REPORT

Operating Performance Rs in Lacs (2007)

Capacity Utilisation 94%

Sales 8390.00

Gross Profit 1227.00

Interest 176.00

Depreciation 239.00

Net Operating Profit/ (Loss) 812.00

Prov. For Taxation 434.00

Net Profit / (Loss) after tax 378.00

118

Financial Position Rs in Lacs (2007)

Net Fixed Assets 5606.32

Net Current Assets 2455.30

Bank Borrowing for W/c 1512.93

Long term Liabilities 2223.19

Unsecured Loan 121.03

Equity Share Capital 966.47

Pref. Capital 500.00

Reserves 1987.02

Net Worth 3453.49

Social Activities

SOCIAL RESPONSIBILITY & ENVIRONMENTAL RESPONSIBILITY

While discharging commercial functions, the company had not forgotten its

responsibilities towards society and environment. The company is virtually a zero

discharge unit. All effluent is FULLY treated and entire water is recycled and re-

consumed. A waste in the shape of sludge having left out fibres is converted into

millboard and sold in market that yields a good price for waste. Millboard manufacturing

equipments have been installed for this conversion.

The company’s endeavor is to make wealth from waste and proud to be associated with

the national cause of conserving its forest reserve and making environment green and

clean by consuming waste paper.

119

Investors Information

Stock Exchange

Stock Exchange Mumbai Stock Exchange

BSE Scrip Code BSE – 500 357

DEMAT Details

CENTERAL DEPOSITORY SERVICES LIMITED (CDSL)

DP ID: 12026000 INDUS PORTFOLIO PVT LIMITED, NEW DELHI

ISIN NO INE 425E 01013

SHARE TRANSFER

In House SECRETARIAL DEPTT.

12/22, 2 nd Floor EAST PATEL NAGAR, NEW DELHI –110 008

PH.NO. 011-25851185, 25850503

E-MAIL : delhi@ramapaper.com

Registrar INDUS PORTFOLIO PVT LTD

G-65, BALI NAGAR

NEW DELHI -110 015.

PH.NO 25422805/25422801

(SEBI REGISTRATION NO: INR000003845)

120

WEST COAST PAPER MILLS LIMITED

The West Coast Paper Mills Ltd. is the flagship company of SK Bangur Group, based at

Kolkata. The mill location was opted as the most suitable and advantageous, Dandeli

being situated in the heart of thick forests on the bank of river Kali.

The prospects of continued supply of forest-based raw materials on the assurance of the

then State Government of Karnataka, perennial availability of water, assured power

supply, vicinity of rail and road linkages were the major factors that weighed in favour of

Dandeli.

CORPORATE PROFILE

The West Coast Paper Mills Ltd., is the flagship company of SK Bangur Group, based at

Kolkata. The SKB Group is a growing conglomerate with diverse interests across Paper,

Power Cables, Telecommunication Cables, Chemicals, Tea, Coffee, Rubber and Wind

Mills. Approximately 60% of the group’s revenue is contributed by West Coast.

Established in the year 1955 at Dandeli, Karnataka, over the past five decades the

Company has exemplified all the qualities of leadership in the Industry, with a vision to

make the nation self reliant in paper production. Today Paper, Paperboard and Coated

Duplex Board from the The West Coast Paper Mills Ltd. address the writing, printing and

packaging demands of millions of customers across the globe. West Coast is an ISO

9001:2000 accredited by the DNV, the Netherlands.

The mill location was opted as the most suitable and advantageous, Dandeli being

situated in the heart of thick forests on the bank of river Kali. The prospects of continued

supply of forest-based raw materials on the assurance of the then State Government of

Karnataka, perennial availability of water, assured power supply, vicinity of rail and road

linkages were the major factors that weighed in favour of Dandeli.

121

Not one to rest on its laurels, the Company is looking ahead and is sensitive to meet the

emerging challenges and trends. Actively engaged in Research and Development to

design and develop the products for tomorrow’s needs, the Company has a progressive

outlook that will take it through a second innings, with goals, plans and a vision to take it

forward through the next 50 years.

At the same time, the West Coast is consciously engaged in giving back to nature through

forestation drives, looking after its employees through community development

initiatives and ensuring prosperity to its shareholders through sustainable growth policies.

SHEER LONGEVITY:

West Coast has grown from strength to strength across five decades (established

1955)

This has established the Company as a key player in the industry.

The wealth accumulated over the decades comprises rich goodwill, process and

product knowledge, trend reading capability and distribution depth.

Its competitive strengths are based on low historical costs in what is otherwise a

capital-intensive business.

CAPACITY:

Originally the plant was designed to manufacture 18,000 MT per year of writing,

printing and packaging paper.

The commercial production from May 1959.

The company was granted a license in December 1964 for 45,000 TPA capacities

and the balancing equipments program was completed in 1972 to increase the

production to 45,000 TPA.

122

The company also implemented the Crash program in 1974 to increase production

capacity to 60,000 TPA against the license issued in July 1972 for 60,000 TPA.

The license capacity was re-endorsed for 69,000 TPA in November 1991 on the

basis of actual production.

The paper industry has been de-licensed from July 1997.

The production capacity has increased to 119750 TPA after successful completion

of modernization / expansion program in 1999.

After commissioning of 100 TPD duplex machines (PM-IV) and rebuilding of

PM – II production capacity has further increased to 163750 TPA in 2001-02.

PRODUCTIVITY & RECOGNITION

Recognized as an efficient paper mill with utilization of 106% of its installed

Capacity in 2004-2005.

Consumption of 1,169 units of energy per tonne of production (paper, paperboard

and duplex), lower than the industry average.

Thirteen awards conferred by the National Productivity Council (Government of

India) and other organizations including Chemical & Allied Products, Export

Promotion Council.

The performance of the company during the last 5 years period was as under:

Year Ended

31st March

Production (Paper &

Board) [in M.T.]

Net Sales

with Excise Duty

Gross Profit

[Rs. in Crores]

2004 1,63,714 491.84 60.57

2005 1,73,070 533.35 56.48

2006 1,76,221 606.84 69.22

2007 1,78,871 619.44 95.52

2008 1,69,891 652.66 114.38

123

The Company has an excellent track record of timely repayment of loans/ lease rentals to

financial institutions and leasing companies and has maintained such record even in the

recession period to which this industry has been subjected many a times. This has been

highly appreciated by the financial institutions & lessors.

INFRASTRUCTURE & FACILITIES

RAW MATERIAL:

The main source of raw material is wood i.e., Eucalyptus, Casuarina, Subabul & other

Hardwood to the extent of 100% of the furnish. Bamboo, which was earlier, the main

source of the raw material has now become scarce and is not used. Small quantity of Pine

wood pulp is also imported for specialty papers. The company's raw material

procurement is basically from private cultivators within the state and from Andhra

Pradesh, Tamilnadu & Pondicherry. Total requirement of raw material is about 3,50,000

MT per annum. The company is dependent on private cultivators for its raw materials i.e.

hard woods and no problem is faced in procurement of wood. Eco-friendly environment

norms are strictly observed in this regard.

WATER:

The water is drawn from Kali river - a perennial river. The water is soft and of very low

iron contents, pure and potable. The water requirement is of the order of 75,000 to 80,000

KL/day.

POWER:

Though the company has a dual system of drawing purchased and self generated power,

it has achieved total self-sufficiency on power front – having 4 turbines with capacity

totaling to 40.30 MW, 3 multi-fuel based power plants of 11.84 MW - aggregate captive

power generating capacity being 52.14 MW. It has contracted demand of 8,500 KVA

from the Karnataka Power Transmission Corporation Ltd.

124

Steam:

The Company has 4 coal fired boilers (two FBC & two chain grate) and one chemical

recovery boiler to meet the steam demand for process as well as power generation. The

major boilers are FBC boilers [capacity 60 MT/hour & 65 MT/hour] and recovery boiler

[capacity 79.5 MT/hour]. Three Waste Heat Recovery Boilers of 2 TPH each have been

installed to recover waste heat from Multi fuel based power plants. One more coal fired

Boiler (FBC Boiler III) is under installation.

Enterprise Resource Planning System (ERP)

The company successfully implemented the ERP system, connecting mills with

corproate offices and branch offices.

West Coast has embarked on an ERP solution to enhance informed decision

making.

Solution to connect all branches, dealers & suppliers across the country

To enable the company to know what inventory is lying where for timely

allocation

To enable volume to be scaled without increasing people

Rs. 4.50 crore ERP solution was commissioned by Tata Consultancy Services Ltd.

DEVELOPMENT

Expansions going ahead

The Company, with a vision to intensify the development activities towards fibre

resource management, quality improvement, upgradation of technology to achieve energy

efficiency, to be environmental friendly and ergonomic coupled with effective utilization

of human resources have embarked on an ambitious expansion cum modernisation plan

125

for increased production facility in the existing mill at Dandeli. This programme includes

the replacement of existing Pulp Mill with new fibre line, a new paper machine for

writing/printing grade papers, additional equipments in Chemical Recovery and utility

section.

PROJECTS UNDER CONSIDERATION - RS. 1100 CRORE:

Complete fibre line of 725 TPD bleached pulp capacity comprising of wood

chipper, chip screen, chip silo,modified batch cooking system, brown stock

washing & screening, oxygen delignification of pulp, ECF bleaching and chlorine

dioxide generation plant.

New paper machine comprising continuous stock preparation, head box to pope

reel rewinder QCS & DCS systems,converting equipments, mechanised handling

of paper in converting, finishing and godown stages.

Rotary lime kiln of 230 TPD lime production capacity.

Black liquor evaporators of 230 m3/hr. water evaporation capacity.

Chemical recovery boiler of 1100 TPD black liquor solids firing capacity.

Causticizing section comprising liquor clarification equipments,mud washing and

thicknering etc.

Power plant comprising boilers and turbine to meet additional requirement of

steam and power.

Additional equipment for effluent treatment plant, environmental protection and

to improve basic infrastructure.

The production capacity will go upto 3,20,000 TPA after completion of the said

investment programme as against 1,63,750 TPA at present.

Research & Development

The company has set up a separate R&D department with the modern research

center at Dandeli to carry out the research on:

126

1. Suitability of pulping various types of hard wood available

2. Improving process efficiency

3. Developing/Optimisation of process for improving productivity and energy

conversation

4. Substituting Imports

QUALITY CONTROL / CENTRAL LABORATORY

The company has a fully equipped laboratory for quality control and to conduct research

on raw material. Detailed analysis of process material, intermediate product, water,

effluent stack gasses etc are carried out in the central laboratory. Customer service,

quality complaints, product development apart from normal work of inspection, testing

and monitoring is carried out by the quality control laboratory.

INDUSTRIAL SAFETY

The company has facilities for industrial safety, which are more than required by the law.

The safety department has qualified and trained personals and is fully equipped with

safety equipments. The company also has a separate fire-brigade division and extensive

network of hydrants spread over in the entire mill area.

POLLUTION CONTROL

The company is meeting the standards laid down by the pollution control board for air

and water. Company is also making conscious efforts to reduce water consumption. The

consents granted by pollution control board are valid.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

West Coast supports the community of its presence through initiatives that go beyond

direct indirect employment and has invested significantly in Dandeli’s upkeep through

various initiatives.

127

The Company maintains a self-sufficient colony with facilities of Shopping Complex,

Temple, Hospital, Theatre, Club and Cable TV Network. The Company has also been

rendering financial support since 1963 to Dandeli Education Society, Dandeli, the

premier educational network of Dandeli, which runs several institutions including two

Pre-University Colleges and a Degree College as well as a Post Graduate Course in Pulp

& Paper Technology.

Stabilized fly-ash dumps through biological means, developed better drainage system,

supported educational institutions (including pulp and paper technology courses),

Commissioned educational facilities for needy children and organized various social

awareness programs.

GREEN INFO

The West Coast Paper Mills Ltd., although dependent heavily on trees for supply of raw

materials, remains one of the foremost ecology conscious concern in the country. With

the threats of ozone depletion and global warming, the company has taken a number of

steps to protect ecology as well as to ensure steady supply of raw material.

The natural forests in India being under tremendous pressure, the Company has started a

programme of distributing quality seedlings of fast growing species like Eucalyptus,

Casurina, Acacia and Subabul (which are the raw materials of the plant).

The beneficiaries are owners of low yielding local agricultural lands in the vicinity of the

plant, i.e Uttar Kannada, part of Shimoga, Belgaum and Dharwar districts. The target is

to distribute to the tune of 4 million quality seedlings.

128

The Company has implemented Clonal Technology to achieve the following:

Supply genetically high quality planting stock.

Improve land productivity and yields from pulpwood plantation

Provide fuelwood etc. for local use

Improve the economic conditions of the growers through

clonal plantation

Encourage overall tree forming practices.

The company has been playing a very active role in developing the backward district of

Uttara Kannada. Stabilising fly-ash dumps by biological means, developing better

drainage systems, organising education from primary to graduate, including pulp and

paper technology course, facilities for needy children, organising various social

awareness programmes etc. are some of the steps it has taken to manifest its

commitments to social and environmental causes.

CAPTIVE PLANTATION

TREE IMPROVEMENT THROUGH CLONAL FORESTRY

THE WEST COAST PAPER MILLS EXPERIENCE

The productivity of the plantation can be increased sustainably by promoting technology

based plantations. Of late in India, clonal forestry is gaining acceptance among the

progressive Foresters and Plantation Managers. Clonal technology is a strategy adopted

in tree improvement programme to capture and exploit the best recombinations in a

shortest possible time. The ultimate objective of tree improvement is to produce quality

seeds. Seeds are the carriers of entire improvement made in one generation to the next

generation. Keeping in view the improved superior seeds are the major source for

129

propagation. Seeds from known sources mainly half sib seeds or full sib seeds are

collected and propagated.

The principles and practices of plant breeding of trees are well established and they apply

equally to industrial plantations and small holder agroforestry and community plantations

also. The goal of tree improvement for agroforestry is to increase the effectiveness of

land for productivity, suitability and sustainability of land use for rural communities. It

consists of:

• Germination of the species or geographic sources within a species in a given area.

• Kind and causes of variability within a species.

• Packaging the desired qualities into improved individuals.

• Mass production of improved individuals for planting purposes.

• Developing and maintaining a genetic base population for advanced generation.

Success in the establishment and productivity of forestry plantations is determined

largely by species used and the source of seed within species. The higher gain in most of

the forestry improvement programmes can be made by assuring the use of the proper

species.

130

PLANTS PLANTED IN CAPTIVE PLANTATION & FARM FORESTRY (No.In

Lacs)

YearFor Captive

Plantations

Farm

Forestry

Karnataka

TamilnaduTotal

Actual

2004 4.59 41.67 70.32 116.58

2005 1.84 42.57 95.12 139.53

2006 6.08 50.00 121.23 177.31

2007 25.35 41.56 97.92 164.83

2008 48.43 9.05 59.74 117.22

ACTUAL PLANTED AREA FOR THE LAST FIVE YEARS (Area in Acres)

YearFor Captive

Plantations

Farm

Forestry

Karnataka

TamilnaduTotal

Actual

2004 510.00 2083.50 1598.18 4191.68

2005 204.00 2128.50 2161.82 4494.32

2006 650.00 2500.00 2755.23 5905.23

2007 2341.00 2078.00 2225.45 6644.45

2008 6095.00 452.50 1357.72 7905.22

131

PRODUCT

RAW MATERIAL REQUIREMENTS

PRINTING & WRITING:

We require Bleached Soft Wood/Hard Wood Pulp around 7800 ADMT p.a.

COATED DUPLEX BOARD:

For our Multi-Layer Duplex board manufacturing facility on Paper Machine IV and V

we require the following raw materials:

Sl Description Specification Quantity P/A (M.T.)

1. Box Board Cuttings As per PS-01, Item 4 20000 M.Tons

2.Supermix waste as per

specificationAs per PS-01, Item 2 15000 M.Tons

3. Old News Paper As per PS-01, Item 8 15000 M.Tons

4. Light Colour cuttings - 3000 M.Tons

5. White Cuttings As per PS-01, Item 31&35 3000 M.Tons

PREMIUM PRODUCTS

WCPM manufacturers the following products also in premium range:

Sud. MICR Cheque Paper

SS Maplitho Classic

Ultrashine Maplitho

SS Pulp Board UHB

132

Legend Copier

B2B Copier

Budget Copier

Parchment

EXPORTS

DISTRIBUTION NETWORK IN WORLD MAP:

133

Africa

- South Africa

- Botswana

- Uganda

- Ghana

- Sudan

- Nigeria

- Kenya

- Tanzania

- Benin

- Togo

Asia - Pacific

- Bangladesh

- Nepal

- Myanmar

- Sri Lanka

- Mauritius

- Fiji

- Malaysia

- Indonesia

Europe

-Greece

Middle East

- UAE

- Sultanate of Oman

- KSA

- Egypt

134

- Yemen

- Jordan

- Iran

- Iraq

WCPM CODE OF CONDUCT

As per the revised Clause 49 of the Listing Agreement pertaining to Corporate

Governance, the Company has to evolve and implement a ‘Code of Conduct’ for all

members of the Board and Senior Management (hereinafter collectively referred as

‘Officers’). All the Board members and Senior Management personnel shall abide by and

affirm the compliance of the Code of Conduct on an annual basis. The Annual Report of

the Company shall contain a declaration to this effect signed by the Chief Executive

Officer of the Company.

Contravention of the SEBI Code would lead to serious consequences for the Company

and its directors and such Senior Management personnel who would be liable for of fines,

penalties and also for prosecution under SEBI Act.

Explanation: For this purpose, the term “senior management” shall mean personnel of the

company who are members of its core management team excluding Board of Directors.

Normally, this would comprise all members of management one level below the

executive directors, including all functional heads.

This Code of Conduct of the Company shall be known as “WCPM - Code of Conduct”

(hereinafter referred as “The Code”). This Code has been evolved pursuant the SEBI

directives and Stock Exchange Listing Agreement. Wherever there is any variation

between the provisions of the Code and the provisions of Listing Agreement, the latter

would prevail over the provisions of the code.

135

The objective of the Code is to ensure compliance with legal requirements and set

standards for business conduct so that concerned officers act in accordance with the

highest standards of personal and professional integrity, honesty and ethical conduct,

while working for and on behalf of the Company.

This Code of Conduct helps ensure compliance with legal requirements and sets

standards for business conduct. All the concerned are expected to read and understand

this Code, to uphold these standards in day-to-day activities and comply with all

applicable policies and procedures.

Please sign the acknowledgment form at the end of this Code of Conduct and return the

form to the Finance/Secretarial Department indicating that you have received, read,

understand and agree to comply with the Code.

DUTIES AND RESPONSIBILITIES

All Directors and officers shall observe and implement following code of conduct in their

official day to day activities;

SINCERE, HONEST AND ETHICAL CONDUCT

All Directors and all officers shall observe high standard of personal, professional

integrity, honesty and ethical conduct which is free from fraud and deception, while

in employment with the organization. They should act in good faith, responsibly, with

due care, competence and diligence, without allowing their independent judgment to

be subordinated. Directors will act in the best of interest of the Company and fulfill

the fiduciary obligations. All concerned are expected to devote full attention and are

committed to optimizing the growth of the Organization by adopting best of the

corporate governance practices and ethos.

136

STATUTORY COMPLIANCE

All Directors and Officers shall take utmost care and pay attention to comply with all

applicable laws, regulations, rules and regulatory orders in letter and in spirit. They

are also expected to acquire appropriate knowledge of the requirements relating to

their duties sufficient to enable them to recognize potential dangers and to report to

the Board or management the possible violation of laws and regulations or code of

conduct.

CONFLICTS OF INTEREST

Directors shall avoid situations where a conflict of interest might occur or appear to

occur on account of personal transactions and investments which conflict with

interest of the Company. A Conflict of interest exists when any personal or

professional interest is adverse to or may appear adverse to the interest of the

Company. Conflict of interest may also arise when a director/officer, or member of

his or her family or firm, an organization with which the director/officer is directly or

through relatives or otherwise is affiliated receives improper personal benefits as a

result of his or her position as Director/officer of the Company. Such conflict of

interest impairs ability to exercise good judgment on behalf of the Company and is

not in the best interest of the Company. Following engagement/activities shall be

treated as conflicting with interest of the Company;

(i) Employment/ Outside Employment. Directors/Officers should avoid engaging

themselves in any activity/employment that interferes with performance or

responsibilities to the Company or is otherwise in conflict with or prejudicial to the

Company.

(ii) Outside Directorships. It is a conflict of interest to serve as a director of any

company that competes with the Company. Directors should ensure to report such

directorship to the Board.

137

(iii) Related Party Transactions. Directors should avoid conducting business with

relatives or with firm/company in which a relative/related party is associated in any

significant role.

If such related party transactions are unavoidable it must be fully disclosed to the

Board or the Head of Finance of the Company and such transactions shall be referred

to Audit Committee for its review and comments. Any dealings with a related party

must be conducted in such a way that no preferential treatment is given.

CORPORATE OPPORTUNITIES

Directors and Officers should not exploit for their own personal gain opportunities

that are discovered through the use of corporate property, information or position

unless the opportunity is disclosed fully in writing to the Company’s Board of

Directors and the Board of Directors declines to pursue such opportunity.

PROTECTION OF ASSETS

Protecting the Company's assets is a key responsibility of every employee. Care

should be taken to ensure that assets are not misused, misappropriated, loaned to

others, or sold or donated, without appropriate authorization.

CONFIDENTIALITY OF INFORMATION

Any information concerning the Company’s business, its customers, suppliers etc, which

is not in the public domain and to which the director or officer has access or possesses

such information must be considered confidential and held in confidence, unless

authorized to do so and when disclosure is required as a matter of law. The Company’s

confidential information includes product architectures; source codes; product plans and

road maps; names and lists of customers, dealers, and employees; and financial

information. All confidential information must be used for Company business purposes

only.

138

INSIDER TRADING

Directors and Officer of the Company shall not derive benefit or assist others to

derive benefit by giving investment advice from the access to and possession of

information about the Company not in public domain and therefore constitutes insider

information. All concerned shall ensure to comply with the Insider Trading Code of

the Company and Insiders Trading Regulations of the SEBI since failure to do so

attracts serious consequences in terms of penalties and prosecutions.

DISCIPLINARY ACTIONS

The matters covered in this Code of Business Conduct and Ethics are of the utmost

importance to the Company, its stockholders and its business partners, and are essential

to the Company's ability to conduct its business in accordance with its stated values. It is

expected that all will adhere to these rules in carrying out their duties for the Company.

The Board shall determine appropriate actions to be taken in the event of violations of the

Code.

139

ORIENT PAPER & INDUSTRIES LIMITED (OPIL)

Orient Paper & Industries Limited (OPIL) believes that resources must be dynamically

matched with a strong commitment to excellence in products and processes though a

team of dedicated people, while ensuring a clean environment for our planet, the earth.

All to server the customer better. Today and tomorrow. Across the country and beyond its

borders, graced with service from the heart which says, "you mean the world to us".

Orient Paper Mills is one of India's major players in Paper with a wide range of writing,

printing, industrial and specialty papers. Fully integrated with facilities for production of

high strength pulp combined with reafforestation.

Incorporated in 1939 with a single paper machine and now a multi-product, multi-

location Company, that's much more than paper. That's Orient Paper and Industries

Limited, a proud member of one of the premier and most dynamic business houses of

India, the G P Birla/C K Birla Group.

The G P Birla / C K Birla Group has promoted and established a large number of

industrial undertakings manufacturing a diverse range of products such as Automobiles,

Earthmoving Equipment, Engineering Products, Ball Bearings, Building Materials,

Chemical Plants and Software Development etc.

In keeping with the Birla philosophy, giving shape to customers' aspirations is Orient

Paper and Industries Limited's pivotal strength. Keeping abreast of new technology, its

credo. Preserving the hues and shades of nature, its obsession.

No wonder then, that in the Paper Industry Orient Paper and Industries Limited

commands the status of a leader with a vision. In cement, it has earned a solid reputation.

140

In appliances, Orient, has become a household name.And, all combined Orient Paper and

Industries Limited in seen as a company with a cutting edge. A hi-tech, customer

friendly, eco-responsive corporate citizen, that is Shaping a Better Tomorrow for

everyone.

PRODUCT

Orient Paper Mills is one of India's major players in Paper with a wide range of writing,

printing, industrial and speciality papers.

Fully integrated with facilities for production of high strength pulp combined with

reafforestation, high speed paper machines and independent power generation, Orient

Paper Mills is in total control right from raw materials to the production of a variety of

superior papers and boards.

The Orient Paper Mills plants at AMLAI, Madhya Pradesh have manufacturing facilities

to produce a variety of grades and types of papers. Judicious deployment of new

technology, abiding commitment to total quality management systems and ingenuity in

research and product development have enabled Orient Paper Mills to carve out an

important niche not only in the Indian market but in several other countries as well.

The Company has recently set up state-of-the-art facilities to produce a spectrum of Soft

Tissue Paper of world class quality.

On the global plane, Orient Paper Mills has blazed a trail by promoting and successfully

managing Pan African Paper Mills Limited, Kenya, in partnership with the Government

of Kenya and International Finance Corporation.

141

To perpetuate progress, the Paper Division of Orient Paper Mills continually improving

its people, products and processes as it marches ahead in its quest for even higher

standards of excellence.

MAKING IMPRESSIONS THE WORLD

As an integral part of its growth oriented strategy Orient Paper Mills has always

identified exports as a priority area. That Orient Paper Mills has been in the forefront in

this field is a reflection of this attitude, as more and more countries express satisfaction

with Orient Paper Mills quality, its papers and paper boards are in wide demand in

several countries. Orient Paper products are being regularly shipped to Africa, Middle

East, Bangladesh, Sri Lanka and Nepal.

RESEARCH & DEVELOPMENT

ENSURING EXCELLENCE IN QUALITY

At Orient Paper and Industries Limited, Quality is of prime importance. It has been

integrated into everything the Company does and stands for. Continuous value addition

from raw material to finished products, regular investments in better resource-

management and a vision to anticipate the changing needs of the market are the obvious

outcome of this philosophy. Each operation-centre of the Group adheres to the same

values, offering Quality that's backed by rigorous and multi-dimensional Quality

Assurance Systems and Programmes.

All these lean to the most vital aspect treasured by the Company-Customer care and

Customer relationship. After all, a happy customer is the best proof of Quality!

142

EXCELLING IN RESEARCH & DEVELOPMENT

The success story of Orient Paper and Industries Limited greatly hinges upon its

commitment to continuous Research and Development. At all its locations and in all its

Divisions, the Orient Paper and Industries Limited scientists are always exploring new

ideas and technologies for optimum results.

Orient Paper and Industries Limited's Research & Development Centers are some of the

most well-equipped in the country and are duly recognized by the Government of India.

143

CHAPTER 5

YASH PAPERS LIMITED

Yash Papers (located in Faizabad, India) is synonymous with machine-glazed varieties of

paper. Our brand revolves around the manufacture of the best wrapping grades of papers

in India. The Company manufactures wrapping tissues in both brown and white varieties.

If Yash Papers has grown over more than two decades – the Company was commissioned

by entrepreneur-promoter KK Jhunjhunwala - from an installed capacity of 1940 MT per

annum in 1983, it is because of a singular discipline, focus on specialty products and

quality and plough back surpluses into additional capacity.

As a result, we have grown significantly to an installed capacity of 39,100 MT per annum

that makes us the largest producers of wrapping grades in the country

Year Effective capacity Initiatives

1983 1,940 MTPAOriginal capacity in 1983 when the project went on

stream

1989 4,000 MTPA First expansion phase

1991 10,000 MTPA Addition of PM II with 6000 MTPA capacity

1993 12,000 MTPA PM I capacity enhanced by 2,000 MTPA

1994-95 16,000 MTPA PM II capacity increased by 4,000 MTPA

2007 39,100 MTPA PM III has been started from June 2007

144

The consistent feature of our business strategy has been value-addition. We invested

periodically in the manufacture of specialised grades – a distinctive preference for the

value approach over a volume one.

This preference for the value-approach is reflected in the Company’s product mix - hard

tissue, wrapping grade and packaging/stationery grades. These varieties are used in

specialised downstream applications like soap wrapping, food wrapping, pharmaceutical

covers, interleaving sheets, laminating sheets, paper bag, bidi wrapping, gum tape,

notebook covering paper, PE coating in mattress, tube light packaging among others.

So even as we are based in India, our products find loyal customers in countries across

the globe.

VISION

To create the largest speciality paper manufacturing company in the world by 2025.

MISSION

Ensure higher profitability than the industry average year-on-year for continuous

growth.

Provide a working environment with freedom of thought and innovation; hire and

cultivate the best people and provide work conditions that energies.

Find solutions for customers and add value to their processes. Create a dedicated

customer base.

Work as partners with vendors; ensure integrity and create processes that provide

them with ease in dealing with us.

Provide the optimum ROI to our stakeholders, ensuring their continuous support.

145

Invest time, effort and resources to continuously improve the environment; ensure

‘clean and green’ surroundings for future generations.

Develop the community around us by encouraging entrepreneurship.

Spread the goodwill of our nation around the world.

WHAT WE BELIEVE IN

Yash Papers represents a small soul in a growing body. We are a customer-facing

organisation. Which means that all initiatives are taken with the customer in mind.

The management structure is flat. Decision-making decentralised. Doors open.

Communication direct. Trust complete.

Such a management philosophy helps us cater to the stated and unstated needs of our

customers in the shortest possible time.

SELF-MANAGEMENT TEAMS

At Yash Papers, we are proud to have created a unique management structure,

adapted to our local culture. Resulting in maximised employee ownership and

enhanced organisational effectiveness.

Each employee works in a self-managing team called a sangh

Each sangh is classified on the basis of its function – the raw material department

is known as Kachha Maal Vyapaar Sangh, the pulping department as Pulp Mill

Vyapaar Sangh and the finished goods department as Kaagaz Vyapaar Sangh,

among others.

146

These sanghs serve as a knowledge-sharing platform; they discuss relevant issues

with corresponding action plans with each worker involved in active decision-

making.

Each sangh is headed by a representative called Pradhan and he escalates issues at

a higher level called Pradhan Sangh comprising team heads. The senior

management team is called the Sangrakshak Sangh which discusses broad

organisational issues and is attended by a Pradhan Sangh representative (selected

by rotation).

TRAINING AND DEVELOPMENT

At Yash Papers factory we manufacture paper; at Yash Papers Company, we develop

people.

This people development is driven by a training agenda that is conducted at various

levels.

Trainers, both within the Company and outside, train our people regularly.

Equipment suppliers are actively engaged in employee training.

Handpicked workers engage in quality and cost management training

The training extends to behavioural aspects as well.

THE GURU-SHISHYA PROGRAMME

At Yash Papers, we have blended our training initiatives with the age-old Indian

guru-shishya (teacher-protégé) tradition to promote multi-skilling for a whole new

world of customer satisfaction. This is what makes us special:

Any employee can voluntarily choose any individual from another department as

his Guru (teacher).

147

It is the Guru’s responsibility to share as much as he knows, as it is the Shishya’s

(student) responsibility to learn.

This cross-functional training is incentivised with employee remuneration.

EMPLOYEE APPRAISAL

At Yash Papers, we believe that it is not only important to be fair, it is critical to appear

so as well. As a result, the progress of each employee is monitored through a

comprehensive appraisal system based around self-appraisal. Each worker sets his or her

own annual target, monitored quarter wise.

This performance is then appraised at two levels: First by the Pradhan of the respective

sangh and a member of the senior management. In addition to the unambiguous

numerical target against which the performance is judged, the other appraisal parameters

comprise cross-functional learning, attitude orientation and motivation.

CODE OF CONDUCT

PREAMBLE

This Code of Conduct (“Code” hereinafter) has been adopted by the Board of Directors

of the Company as a set of standards, values and guidelines for Directors and senior

management personnel of the Company so as to promote ethical behaviour and provide

guidance to help them recognise and deal with ethical issues in pursuit of Company’s

goals and objectives from time to time.The Code is not exhaustive and does not cover

every issue that may arise or every situation where ethical decisions must be made.

Rather, it has set forth broad guiding principles in dealing with them.

148

APPLICABILITY

This Code of conduct is applicable to all

Directors,

Functional heads,

Senior executives,

Any other employee or officer of the Company who has the opportunity to

materially influence the integrity, strategy and operation of the business and

financial performance of the Company.

The Code came into effect from 1st day of January 2006 and each and every person to

whom the provisions of this Code extends or applies shall sign the acknowledgement

form at the end of this Code and return the same as a token of having received, read and

understood and having agreed to comply with and adhere to the provisions of this Code.

As required under the Listing Agreement, each year as part of annual review, all

employees, officers to whom the code applies and Directors would be required to sign an

acknowledgement indicating their continued adherence to the provisions of this Code.

CONFLICT OF INTEREST

All Directors and employees to whom this Code applies shall conduct themselves in an

honest and ethical manner and act in the best interests of the Company and shall

endeavour to avoid actual or apparent conflicts of interest with that of the Company in

personal and professional relationships. Generally, a conflict of interest occurs when a

Director’s / employee’s personal interest interferes or has the potential to interfere or

appears to interfere materially with the interests or business of the Company; or the

ability of the Director/employee to carry out his or her duties and responsibilities

objectively.

149

Although it would not be possible to visualise and enumerate here each and every

situation in which a conflict of interest may arise, the following situations illustrate where

conflict of interest arises:

Working in any capacity for a competitor, customer, supplier or other third party

while employed by the Company.

Accepting gifts of more than modest value or receiving personal and exclusive

discounts (if such discounts are not generally offered to the public) or other

benefits as a result of the position in the Company from a competitor, customer or

supplier.

Having an interest in a transaction involving the Company, a competitor,

customer or supplier (other than as an employee, officer or Director of the Bank

and not including routine investments in publicly traded companies).

Receiving a loan or guarantee of an obligation as a result of the position.

Directing business to a supplier owned or managed by, or which employs, a

relative or friend.

In the event that an actual or apparent conflict of interest arises between the personal and

professional relationship and activities of an employee, officer or Director, the employee,

officer or Director involved is required to handle such conflict of interest in an ethical

manner in accordance with the provisions of this Code.

CORPORATE OPPORTUNITIES

In carrying out their duties and responsibilities, Directors and employees to whom this

Code applies should endeavour to advance the legitimate interests of the Company when

the opportunity to do so arises. Accordingly they should avoid:

150

using for themselves personal opportunities that are discovered in carrying out

their duties and responsibilities to the Company;

using Company property or information, or their position for personal gain; and

competing with the Company, in each of the foregoing cases, to the material

detriment of the Company.

FAIR DEALING

Each person to whom this Code applies shall deal fairly with customers, suppliers,

competitors, the public and each other at all times and in accordance with ethical business

practices. No one should take unfair advantage of anyone through manipulation,

concealment, abuse of privileged information, misrepresentation of material facts or any

other unfair dealing. No payment in any form shall be made directly or indirectly to or for

anyone for the purpose of obtaining or retaining business or obtaining any other

favourable action.

Occasional business gifts to and entertainment of non-employees in connection with

business discussions or the development of business relationships are generally deemed

appropriate in the conduct of the Company’s business. However, extending such gifts

should be infrequent and their value should be modest. Gifts or entertainment in any form

that is likely to result in a feeling or expectation of personal obligation should not be

extended or accepted.

PROTECTION AND PROPER USE OF COMPANY’S ASSETS

It is the duty and responsibility of each person to whom the provisions of this Code

extend to protect Company’s assets and resources from any loss, theft or misuse. Any

suspected loss, misuse or theft should be promptly brought to the notice of the higher

151

management for taking appropriate action. The Company’s assets and resources shall be

applied and used only for the legitimate business purposes of the Company.

LEGAL COMPLIANCES

The Company is committed to conduct its business operations with integrity and in full

compliances of all legal and regulatory requirements. Accordingly, no employee, officer

or Director of the Company shall commit an illegal or unethical act or instruct others to

do so for any reason.

TRADING ON INSIDE INFORMATION

Using non-public information to trade in securities of the Company, or providing a family

member, friend or any other person with a “tip” is illegal. All non-public information

should be considered inside information and should never be used for personal gain.

The Board of Directors of the Company has already put in place a Code of Conduct for

Prevention of Insider Trading, copies of which have been circulated / distributed to all

applicable employees, officers and Directors. Accordingly all the officers, employees and

Directors shall continue to adhere and follow the provisions of the said Code as amended

by the Board from time to time.

CONFIDENTIALITY

All persons to whom this Code applies should observe the confidentiality of information

that they acquire in carrying out their duties and responsibilities, except where disclosure

is approved by the Company or legally mandated. Confidential information includes, but

is not limited to, all non-public information that might be of use to competitors, or

harmful to the Company or its customers, if disclosed. Of special sensitivity is financial

information, which should, under all circumstances, be considered confidential.

152

Compliance with this Code and reporting of any illegal or unethical behaviour.

It is the responsibility of each employee, officers and Directors to whom this Code

applies to strictly adhere and comply with the guiding principles and provisions contained

herein and to report to appropriate higher authorities, Audit Committee or Board of

Directors as the case may be, as and when any instance of violations or unethical conduct

is noticed.

WAIVER AND AMENDMENTS

Any waiver of, or amendment to, the requirements of this Code may only be authorised

by the Board of Directors, and will be subject to public disclosure to the extent required

by law or the listing standards / requirement.

CODE OF CONDUCT FOR PROVISION OF INSIDER TRADING

This Code of Conduct will be known as "Yash Papers Limited Code of Conduct

for prohibition of Insider Trading" hereinafter referred to as “Code”.

This Code of Conduct has been made pursuant to Regulation 12 of the SEBI

(Prohibition of Insider Trading) Regulations, 1992, as amended, hereinafter

referred to as the "Regulations ".

Applicability

The Code on Insider Trading is formulated with a view to abide by the spirit of

the SEBI regulations on the insider trading. The Code will govern the framework

for acquisitions, purchases and sale of the securities of the Company and will be

applicable to Directors/ Officers/ Designated Employees of Yash Papers Limited

and their dependent family members as defined therein.

The definitions as framed in Regulation 2 of Chapter I of the Regulations, shall

apply and form part of this Code.

153

a) "Act" means the Securities and Exchange Board of India Act, 1992.

b) "Body Corporate" means a body corporate as defined under Section 2 of the

Companies Act.

c) "Board of Directors" means the Board of Directors of the Company.

d) "Committee" means the Committee, if any, constituted by the Company for the

implementation of these Regulations.

e) "Companies Act" means The Companies Act, 1956.

f) "Company" means Yash Papers Limited.

g) "Compliance Officer" means the existing Company Secretary of the Company or

the Officer appointed by the Board of Directors of the Company for the purpose of

this Code and the Regulations.

h) "Dealing in securities" means an act of subscribing, buying, selling or agreeing to

subscribe, buy, sell or deal in any securities by any person either as principal or agent.

i) "Dependent Family Members" shall include dependent spouse and dependent

children.

j) "Designated Employees" shall mean all employees comprising the top tier of the

Company’s Management, all employees in the finance, accounts and secretarial

departments and such other employees who may be so designated from time to time

by the Company for the purpose of this Code and who may be able to have access to

any ‘price sensitive information’ as defined in this Code or the Regulations.

k) "Insider" means any person who is or was connected with the Company or is

deemed to have been connected with the Company, and who is reasonably expected

154

to have access to unpublished price sensitive information in respect of securities of

the Company or who has received or has had access to such unpublished price

sensitive information.

l) "Officer of the Company" means any person as defined in Clause (30) of

Section 2 of the Companies Act, including the Auditors of the Company.

m) "Price Sensitive Information" means any information, which relates, directly or

indirectly, to the Company and which, if published, is likely to materially affect the

price of securities of the Company.

EXPLANATION

The following shall be deemed to be price sensitive information:

Periodical financial results of the Company;

Intended declaration of dividends (Interim and / or Final);

Issue of Securities or Buy-back of Securities;

Any major expansion plans or execution of new projects;

Amalgamation, merger or takeover;

Disposal of the whole or substantially the whole of the undertaking;

Any significant changes in policies, plans or operations of the Company

having material impact on the financials of the Company.

n) "Regulations" mean the SEBI (Prohibition of Insider Trading) Regulations,

1992, as amended.

o) "Securities" means Equity (Ordinary) Shares and all other securities of the

Company issued and / or to be issued from time to time and listed / to be listed on

the stock exchange(s).

155

p) "Stock Exchange" means any stock exchange, which is recognised by the

Central Government or SEBI under Section 4 of Securities Contracts (Regulation)

Act, 1956.

q) "Threshold Limit" means the minimum number of securities as decided by the

Board of Directors of the Company from time to time. Until otherwise resolved

by the Board, 5,000 equity shares for members of the Board and 2,500 equity

shares for officers and other designated employees shall be the Threshold Limit.

r) "Trading Window" - means a trading period for trading in the Company's

Securities as specified by the Company from time to time. All days shall be the

Trading Period except those days specified in Clause 8 hereunder.

s) "Unpublished Information" means information, which is not published by the

Company or its Agents and is not specific in nature.

EXPLANATION

Speculative Reports in print or electronic media shall not be considered as

Published Information.

t) Words and phrases not specifically defined herein shall have the same meaning

as defined under the Act, Companies Act, and the Regulations as amended from

time to time.

CONFIDENTIALITY OF PRICE SENSITIVE INFORMATION

a) Directors / Officers / Designated Employees shall maintain the confidentiality of

all price sensitive information. They shall, while in possession of any price sensitive

information, neither deal in the securities of the Company on the basis of price

sensitive information nor pass on such information to any person directly or indirectly

156

by way of making a recommendation for the purchase or sale of securities of the

Company.

b) Price Sensitive Information is to be handled on a "need to know" basis. It should

be disclosed only to those within the Company who need the information to discharge

their duty.

c) Files containing confidential information shall be kept secured. Computer files

must have adequate security of login and password, etc.

d) Directors/officers/designated employees shall not acquire/purchase/sell the

Company’s securities either on behalf of themselves or others, when in possession of

unpublished price sensitive information.

e) Directors/officers/designated employees shall not communicate, counsel or

procure, directly or indirectly, any unpublished information to any person by way of

making recommendation for acquisition/purchase/sale of the Company’s securities.

FUNCTIONS, DUTIES AND RESPONSIBILITIES OF THE

COMPLIANCE OFFICER

The Compliance Officer shall be subject to the supervision of the Board of Directors of

the Company.

The Compliance Officer shall be responsible for-

Setting forth policies, procedures and monitoring adherence to the Rules for

the preservation of Price Sensitive Information, Pre-clearance of trades of

Directors, officers and designated employees and their dependent family

members and monitoring of trades and implementation of this Code.

Maintaining record of Directors, officers and designated employees and

incorporate changes from time to time.

157

Assisting all employees in addressing any clarifications in the Regulations or

this Code.

Ensuring that all Directors, officers and designated employees of the

Company shall conduct their dealings only when the Trading Window is open.

Ensuring that all Directors, officers and designated employees furnish the

details of transactions in the securities of the Company as stated in Clause 7 in

the prescribed form and maintain a record of all the intimation received for a

period of at least three years.

Maintaining records of all declarations as stated in Clause 7 in the prescribed

form and to place the same before the Managing Director, on a quarterly

basis.

Obtaining initial and continual disclosures from Directors, officers and

designated employees, major shareholders and to give information in respect

of the disclosures made to all the stock exchanges where the securities are

listed, within five working days of receipt.

REPORTING REQUIREMENT FOR TRANSACTIONS IN SECURITIES

A. By Directors, officers and designated employees

Initial Disclosures

All Directors, officers and designated employees shall forward the following

details of their securities, including that of their dependant family members, to the

Compliance Officer in Form A annexed hereto:

Details of securities of the Company held:

at the time of joining of the Company and

by new Directors, officers and designated employees within four working

days of becoming Directors, officers and designated employees.

158

Monthly / Annual disclosures

In addition to the above, they shall also furnish to the Compliance Officer

the following:

Monthly statement of transactions in securities of the Company in

Form B annexed hereto. If there is no transaction in a particular

month, nil statement need not be submitted.

Annual statement of all their holdings in securities of the Company

to be submitted within 30 days of the closure of each Financial

Year in Form C annexed hereto.

Continual Disclosures

Any change in shareholding or voting rights: If there is a change in such holdings from

the last disclosure made and the said change exceeds Rs.5,00,000/- in market value or

5,000 shares or 1% of the total share holding or voting rights, whichever is lower. Such

changes in shareholding or voting rights, to be disclosed to the Company within four

working days or such other time limit as may be specified in Form D

B. By other major shareholders

Initial disclosure

Any person holding more than 5% shares / voting rights in the Company shall disclose

the number of shares or voting rights held within four working days of receipt of

intimation of allotment of shares or the acquisition of shares in Form A annexed hereto.

Continual disclosure

Any person who holds more than 5% shares or voting rights in the Company shall

disclose to the Company the number of shares or voting rights held and change in the

shareholding or voting rights held, even if such change results in shareholding falling

159

below 5%, if there has been change in such holdings from the last disclosure and such

change exceeds 2% of total shareholding or voting rights in the Company.

PREVENTION OF MISUSE OF PRICE SENSITIVE INFORMATION

All Directors, officers and designated employees of the Company shall be subject to

trading restrictions in the following manner -

TRADING WINDOW

(i) All Directors, officers and designated employees of the Company shall trade in the

Company's securities only during the period specified by the Company from time to time.

The ‘Trading Window’ shall be closed during the time the information referred to

hereunder is unpublished. When the ‘Trading Window’ is closed, the Directors, officers

and designated employees shall not trade in the securities of the Company during that

period.

(ii) The ‘Trading Window’ shall, inter-alia, be closed-

From the date of the notice to the stock exchange of the meetings

of the Directors or committee of Directors until one day after the

date of declaration /publication of the annual /half yearly /quarterly

results as the case may be;

From the date of the notice to the stock exchange of the meetings

of the Board of Directors where the decision on any of the

following matters is taken/ intended to be taken until one day after

the decision is made public:

a) Intended declaration of dividends (interim and / or final);

b) Issue of securities or buy-back of securities;

160

c) Any major expansion plans or execution of new projects;

d) Amalgamation, merger or takeover;

e) Disposal of the whole or substantially the whole of the

undertaking;

f) Any significant changes in policies, plans or operations of the

Company having material impact on the financials of the

Company.

‘Trading Window’ may be closed by the Company during such

time in addition to the above period, as it may deem fit from time

to time.

The date of Board Meeting and/or closure of ‘Trading Window’

during such time as specified above are informed to the

Directors/departmental heads. Any Director/officer/designated

employee who proposes to acquire/ purchase/ sell the Company’s

securities has an obligation to verify the Board Meeting date and/or

date of closure of ‘Trading Window’ with the Company Secretary

and refrain from acquiring/ purchasing/ selling the Company’s

securities during the closure of ‘Trading Window’ and also abide

by the pre-clearance procedure.

iii) The ‘Trading Window’ shall be opened 24 hours after the information is made public.

iv) No Director, Officer or designated employee shall conduct any dealing in the

securities of the Company during the closure of the ‘Trading Window’. In case of ESOPs

(Employee Stock Option Plan), exercise of option may be allowed during the period

when the ‘Trading Window’ is closed. However, sale of shares allotted on exercise of

ESOPs shall not be allowed when ‘Trading Window’ is closed.

161

PRE-CLEARANCE OF TRADES

All Directors, officers and designated employees of the Company intending to deal in the

securities of the Company up to the Threshold Limit fixed, as defined and provided

herein before, may do so without any pre-clearance from the Compliance Officer.

In all other cases, they should pre-clear the transactions as per the pre-dealing procedure

as provided hereunder:

a) Make an application in the prescribed format enclosed along with Form E annexed

hereto, to the Compliance Officer indicating the estimated number of securities that

he/she intends to deal in, the details as to the depository(ies) with which he/she maintains

a security account, the details as to the securities in such depository mode and such other

details as may be required by any rule made by the Company in this behalf.

b) He / she shall execute an undertaking in favour of the Company incorporating, therein,

inter alia, the following clauses, as may be applicable:

i) that he / she does not have any access or has not received Price Sensitive

Information upto the time of signing the undertaking ;

ii) that in case he/she has access to or receives Price Sensitive Information after the

signing of the undertaking but before the execution of the transaction he/she shall inform

the Compliance Officer of the change in his/her position and that he/she would

completely refrain from dealing in the securities of the Company till the time such

information becomes public ;

iii) that he/she has not contravened any provisions of this Code, as may be notified by the

Company from time to time ;

iv) that he/she has made a full and true disclosure in the said matter.

162

c) The Directors/officers/designated employees shall execute their transactions in respect

of securities of the Company within one week after the approval of pre-clearance is given

failing which the transaction has to be pre-cleared again. They shall hold their

investments in securities for a minimum period of 30 days from the date of

purchase/actual allotment. In case of a personal emergency the 30 days holding period

may be waived by the Compliance Officer (application to be made in Form F) after

recording in writing the reasons in this regard.

In case of the Compliance Officer intending to deal in the securities of the Company

beyond the threshold limit the pre-clearance of the Managing Director will have to be

obtained. Similarly in case of personal emergency Compliance Officer may obtain the

waiver from the Managing Director with regard to complying with the minimum period

of holding investments for 30 days.

RESTRICTIONS ON THE COMPANY

The Company shall not deal in the securities of another Company or associate of that

other Company, while in possession of any unpublished Price Sensitive Information

of that other Company.

PENALTY

a) Any Director, officer or designated employee, who trades in securities or

communicates any information for trading in securities in contravention of this Code,

shall be penalised and appropriate action shall be taken against him/them by the

Company after giving reasonable opportunity for ‘show cause’. He/she shall also be

subject to disciplinary action, as deemed appropriate, including wage freeze, suspension,

in-eligibility for future participation in ESOPs etc.

163

b) In addition to the action, which may be taken by the Company, the persons violating

the Regulations or this Code shall also be subject to action by SEBI as per SEBI Act. In

case of any violation, the Company shall inform SEBI accordingly.

GENERAL

The decision of the Board of Directors of the Company with regard to any or all matters

relating to this Code shall be final and binding on all concerned. The Board of Directors

of the Company shall have the power to modify, amend or replace this Code in part or

full as may be thought fit from time to time in their absolute discretion.

This Code has been duly approved by the Board of Directors at their meeting held on and

this Code shall be deemed to have come into force with effect from the said date.

EQUIPMENT

Facilities Include:

System Capacity

PM1 Capacity 6000 TPY

PM2 Capacity 10000 TPY

PM3 Capacity 23000 TPY

Bagasse Pulp Mill Capacity 43000 TPY

Jute Pulp Mill Capacity 3500 TPY

Waste Paper Pulp Mill Capacity 1300 TPY

Bamboo Pulp Mill (under

implementation)Capacity 10000 TPY

Power Plant 1 2.5 MW

164

Power Plant 2 6 MW

Chemical recovery plant 145 BD MT solids per day

RAW MATERIALS

The profitable manufacture of paper will be increasingly influenced by the availability of

raw material. In this raw material-sensitive business, Yash Papers is attractively placed

for the following reasons:

We do not use wood but bagasse as our principal raw material. This will protect it

from the raw material under-supply and price increase affecting wood-based

paper manufacturers.

We are located in the Faizabad district of Uttar Pradesh, which proximate to a

number of sugar mills, creating an easy access to bagasse (Uttar Pradesh is the

largest producer of sugarcane in the country with an estimated production of over

112 million tons per annum).

We possess the potential to source nearly 550,000 tons of bagasse from within

250 kms of its plant, nearly three times its post-expansion bagasse requirement.

The raw material used at Yash Papers :

Bagasse

Old gunny/ jute mesta goods

Imported waste paper

Softwood Pulp

165

ENVIRONMENTAL CONCERNS

At Yash Papers, we believe that we must conduct business not only with a respect for

economic viability but also environmental responsibility.

This responsibility has been woven into the business in a fundamental way. For instance,

bagasse, a cane by-product and the principal raw material, is more environment-friendly

than wood.

At Yash Papers, respect for environment management is not just a senior management

agenda; it is an across-the-board commitment. Over the years, it has sensitised all

employees towards the need for environment protection, resulting in a clean and green

factory comprising effective waste segregation and disposable with compost pits for

biodegradable waste.

Environmental concern are reflected in the following measures:

CHEMICAL RECOVERY PLANT

Yash Papers is one of the few agro based units in the world to have its own chemical

recovery system. Over 90% of Caustic Soda (NaOH) used in the pulp cooking system

is recovered and recycled.

EFFLUENT TREATMENT PLANT

The anaerobic effluent treatment system has a primary, a secondary and a tertiary

clarifier along with large lagoons for microorganism growth and aeration tanks for

oxidation that purifies water to the extent of it being usable for agricultural purposes.

166

SOLID WASTE

Most of the solid waste generated during manufacture is either reused or sold for use

in downstream products. The solid waste or sludge generated is used to produce sun-

dried boards while the rest is disposed as landfill.

AIR POLLUTION

All operational boilers in the Company are accompanied by an Electro Static

Precipitation that enables additional collection of any ash particles before flue gases

are let into the atmosphere.

NOISE POLLUTION

The principal source of noise pollution inside a paper mill is derived from the

vacuum pumps. We commissioned special silencers to reduce the noise.

WATER CONSUMPTION

The Company is focusing upon reduction in water consumption by reusage of as

much water as possible. The target taken at present is 90 cubic meters / PMT of paper

which is far lower than prescribed norms.

PRODUCT

At Yash Papers, our principal objective is to be a dependable one-stop shop for the

growing requirements of our customers. Over the years, this translated into product

development and the following product range:

Hard tissues (18 – 30 GSM)

Wrapping grades (30 – 60 GSM)

Packaging/ stationery grades (60 – 80 GSM) with average GSM range of 49 – 64.

167

Manufacture of speciality paper, out-performing the domestic paper industry

growth by a factor of two.

Product range comprising the manufacture of unbleached kraft paper including

hard tissues (28–30 GSM), wrapping grades (30–60 GSM) and

packaging/stationery grades (60–80 GSM) with average GSM range of 49–64.

Commenced the production of MG poster paper (26–70 GSM), extensively used

in FMCG (soaps, detergents,packaged food and health drinks, among others) and

pharmaceutical (band-aid and medicine packaging) applications.

Alternative paper varieties catering to the growing downstream demand for

matchboxes, bidi covers,cigarette recliners, gum tape, plywood, coated papers and

tea pouches, among others.

The full product list:

Variety code Variety description

DEP Deluxe plain

DER Deluxe ribbed

SDP Super deluxe plain

SDR Super deluxe ribbed

GDP Golden deluxe plain

GDR Golden deluxe ribbed

GSP Golden super deluxe plain

GSR Golden super deluxe ribbed

168

The full product list of poster/ hard tissue

Variety code Variety description

ASP Alkaline Sized Poster

TDP Titanium Dioxide Loaded Poster

REP Regular White Poster

NSP Natural Shade Poster

PAPER GRADES CODE

Code Disrciption

1: DEP - Deluxe Plain

2: DER - Deluxe Ribbed

3: DOR - Deluxe Orange Ribbed

4: GDP - Golden Deluxe Plain

5: GSR - Golden Super Deluxe Ribbed

6: GSP - Golden Super Deluxe Plain

7: GDR - Golden Deluxe Ribbed

8: KGT - Kraft Gum Tape Base

9: KEP - Kraft Envelop Plain

10: KFR - Kraft Fire Work Ribbed

11: LSR - Light Shade Ribbed

12: MSP - Malpani Super Deluxe Plain

13: SDP - Super Deluxe Plain

14: SDR - Super Deluxe Ribbed

169

15: ASP - Alkali Resistence Soap Resistence

16: DPR - Deluxe Pink Ribbed

17: DPP - Deluxe Pink Plain

18: NSP - Natural Shade Poster

19: NSR - Natural Shade Ribbed

20: PCB - Poster Chromo Base

21: PFB - Poster Foil Base

22: PTB- Poster Thermal Base

23: PRB - Poster Release Base

24: PGT - Poster Gum Tape Base

25: REP - Regular Poster Plain

26: RER - Regular Paper Ribbed

27: SWB - Soap Wrapper Base

28: ODD - B Quality

29: OSD - Super Deluxe- B Quality

30: RCP - Regular Side Cut Poster

31: SCP - Side Cut Plane

32: SSP - Super Deluxe Side Cut Plain

BUSINESS

The largest manufacturer of low-grammage unbleached kraft paper through the

‘green’ route (bagasse raw material) in India.

Commenced the production of white paper (various grades of MG poster paper)

through the installation of paper machine III in 2007-08.With this, we possess the

largest installed capacity of poster paper in the country, producing up to 23,100

MT per year.

170

Commissioned an integrated infrastructure comprising a state-of-the-art 130-tpd

pulping stream, chemical soda recovery plant and a 6-MW cogeneration facility.

Realigned the Company’s operating period from the calendar year to a financial

year, resulting in a 15-month working period in 2007-08.

Focused on the development of customerspecific speciality paper grades.

Listed on the Uttar Pradesh Stock Exchange, Kanpur and Bombay Stock

Exchange, Mumbai.

POST-BALANCE SHEET DEVELOPMENTS

Fully commercialized PM III with an average capacity utilization of 70 percent

(first quarter of 2008-09).

Secured PM III paper supplies to Hindalco, Hindustan Unilever and McDonald’s

converters, among others.

Completely switched production on PM III from unbleached paper to bleached

varieties in April 2008, enhancing realizations.

Stabilized the cogeneration of power with an average plant load factor of 79

percent in the first quarter of 2008-09; caustic recovery stabilized at 88–90

percent during the period under review.

Commenced sales of excess pulp from June 2008,helping enhance revenues while

efficiently utilizing idle plant capacity.

Increased income by 118.36 percent to Rs 1855.42 lacs in Q1 FY’09 compared

with Rs 870.48 lacs in the corresponding quarter of the previous year.

Increased EBIDTA by 390 percent to Rs 457.83 lacs in Q1 FY’09 compared with

Rs 93.42 lacs reported in the corresponding quarter of the previous year.

Strengthened cash profit by 627.96 percent to Rs 125.50 lacs in Q1 FY’09

compared with Rs 17.24 lacs in the corresponding quarter of the previous year.

Reinforced post-tax profit to Rs 13.45 lacs in Q1 FY’09 compared with a loss of

Rs 84.68 lacs reported in the corresponding quarter of the previous year.

171

LOCATION

Mills located in the Faizabad district of Uttar Pradesh, India’s largest sugarcane

belt, facilitating the easy procurement of bagasse, our primary raw material.

Products distributed through a network comprising 37 dealers in India; exports to

more than 15 countries.

MANAGING RISKS AT YASH PAPERS

Risks are integral to business. At Yash Papers, risk management encompasses an

organised and coherent process of identifying, assessing,prioritising and managing the

existing and potential risks in a planned manner. The management strives hard to balance

business risks and opportunities and analyse potentially negative or positive outcomes.

BUSINESS ENVIRONMENT RISKS

Competition as well as supply-demand imbalances in the paper, packaging and wood

product industries – which are mature, capital-intensive and highly competitive – impact

profitability. Yash Papers’ principal competitors include a number of large domestic

companies and numerous regional organisations.

Economic cycles and changes in consumer preferences may reduce product demand and

affect profitability. The ability to respond to evolving customer tastes and develop new

products on a competitive basis entails continuous market and end-use monitoring.

Increased input costs comprising energy, fibre, other raw materials, transportation and

labour might dent profits. Securing access to low-cost supplies and proactive

management of costs and productivity are of fundamental importance.

172

Changes in legislation, especially environmental regulations, may affect Yash Papers’

operations. However, the Company’s adherence to environment norms acts as an

effective hedge against official censure.

BUSINESS DEVELOPMENT RISKS

Business development risks are mainly related to the Company’s strategy and also

include risks related to the supply and availability of natural resources, raw materials and

energy. Yash Papers intends to reduce business volatility by preparing a less cyclical

portfolio. It aims to enhance profits through greenfield, inorganic growth options and

operational improvements in the existing production base. Besides,the export value in the

growth markets may be affected by political,economic and legal developments in those

countries. Yash Papers manages these risks through export guidelines to ensure strategic

and financial targets, in addition to considering the environmental and social-

responsibility risks.

RAW MATERIAL RISKS

Non-availability of fibre may disrupt the supply chain, forcing the Company to pay

higher prices or alter manufacturing operations.Yash Papers is adequately derisked in

this regard. The primary raw materials consumed by the Company are bagasse (a by-

product of sugarcane), wheat straw and other long-fibres like softwood, old gunny

and kraft carrier board. Yash Papers, located in the Faizabad district of Uttar Pradesh,

is proximate to the country’s two largest sugar mills and other smaller ones, ensuring

adequate resource availability. The apparent threat of bagasse unavailability

following an increase in its captive use for power generation is inaccurate, as power

generation becomes unviable below a certain capacity level.Single-location capacity

enhancement becomes a constraint because of high capital expenditure and well

defined cane procurement areas.The Company signed long-term contracts with

suppliers, creating sustainable supplies. It also marketed clonal eucalyptus trees to

173

farmers and landowners of the region, ensuring a regular supply of wood fibre with

the possibility of setting up a wood-based paper manufacturing line in 2008-09.

HUMAN RESOURCE RISK

A talented and hardworking human pool is the key to the success at Yash Papers. The

Company evaluates the competence of its personnel through surveys and other

assessments. Structured programmes are conducted to train employees and an annual

succession planning process hedges against attrition.

CLIMATE CHANGE RISKS

To mitigate the effects of climate change, Yash Papers seeks opportunities to reduce its

carbon footprint. The Company implements clean, affordable and safe energy practices

required for the production, transportation and reduction of energy

consumption.Additional measures include energy-efficiency initiatives, use of carbon-

neutral biomass, utilisation of combined heat and power and sequestration of carbon

dioxide in forests and forest products.Moreover, wood products are an attractive

alternative to carbonintensive products. The company’s environment focus through the

clean development mechanism (CDM) earned it 23,500 CERs,translating into an

attractive income of Rs 2.10 cr in 2007-08. The income, thus accrued, increased due to a

change in the monitoring period dates and extension of the working period by three

months,up to 30 June 2008; the monitoring report is expected to be posted on the

UNFCCC site soon.

MARKET RISKS

Risks related to demand, price, competition, customers, suppliers and raw materials are

regularly monitored and evaluated to get a perspective of the Company’s profit-making

potential. Cyclical product prices are affected by changes in capacity and production in

the industry. Customer demand for products, which also determine prices, is influenced

by economic conditions and inventory levels.While prices differ across products and

174

geographic regions, changes in raw material and energy costs can also upset profits, as

raw material resources accounts for 23.17 percent and power and fuel 18.57 percent of

the Company’s production costs (including depreciation).

OCCUPATIONAL HEALTH AND SAFETY (OHS) RISKS

Yash Papers aims at creating workplaces free from accidents and work-related illnesses.

Workplace accidents cause human suffering and temporary disruption in operations. The

Company faced minimal safety hazards, resulting in low lost-time injury frequency rate

(LTIFR).

FINANCIAL RISKS

Financial risk management insulates against fiscal volatility. The objectives and

principles are defined in the Company’s financial risk policy, which is regularly reviewed

and approved by the Board of Directors. Besides, compliance is monitored by internal

controls and audits. Yash Papers is also exposed to different kinds of market risks,such as

currency risk, funding risk and interest rate risk, among others.

INFORMATION TECHNOLOGY RISK

Yash Papers operates in a business environment where information is necessary to

support business processes. The Company’s ERP systems,aided by its IT functions and

standardised business applications,support the development of new IT infrastructure and

monitor IT processes continually. These activities reduce risks related to internal control

and financial reporting, besides promoting informed decisionmaking.

175

COMPANY POLICY

We at Yash Paper are committed to strengthen our position as market leader in

manufacturing of writing and printing paper and rayon grade pulp by developing a

company wide culture that promotes :

Customer delight

Quality, Environment, Safety and Information Security initiatives

Environment friendly, Safe and Energy efficient operation

Protecting Information of all Stakeholders

We will continuously pursue for :

Continual improvement in our products, processes & services in all areas.

Protecting information assets and customer information from all threats through

the implementation of suitable information security management systems.

Remain incompliance with applicable legislations.

Communicate and reinforce this policy through out the company.

This policy is made available to employees and on request to interested parties.

CORPORATE MISSION

To achieve growth and leadership through the JK brand equity, customer obsession,

technological innovation and cost leadership, with a clear focus on environment, while

continuously enhancing shareholder value

QUALITY POLICY

To provide 'customer delight' - both internal and external - through our products and

services at lowest cost by continuous improvement in processes, productivity, quality

and management systems

176

CORPORATE VISION

To be a dynamic benchmark and leader in the Indian paper industry

THE FALAFEL MAY BE QUINTESSENTIALLY TURKISH.

THE PAPER INTEGRALLY INDIAN FROM YASH PAPERS.

Few consumers may know of us; few industries don’t.

Because at Yash Papers, we have created a range of papers to help our customers make

better products. So that their consumers, in turn, can benefit from enhanced convenience.

The result is that Yash’s products address the growing needs of diverse downstream

sectors like food, pharmaceuticals, stationery, personal care, household products and

industrial applications.

THE LOCATION MAY BE INTERNATIONAL. THE PAPER

USED IN PRODUCT PACKAGING COMPLETELY INDIAN

FROM YASH PAPERS.

The bottom line is a customer’s smile.

The bottom line is a repeat product offtake using our products.

The bottom line is enhancing the brand of our customer.

At Yash Papers, we have integrated sales, marketing, technology and manufacturing

competencies. Unleashing the potential of these resources. To keep packaged foods

safe, fresh and hygienic.

Working closely with newer technologies. But actually getting closer to people.

177

APPLICATIONS ACROSS SECTORS AND INDUSTRIES

SOLUTIONS FROM YASH.

At Yash Papers, we are committed to converge all our resources to understand customer

problems and provide relevant solutions.This ability has been institutionalised through

the recruitment of specialists. Specialists who understand industry

requirements.Specialists who can stand in the customer’s shoes. Specialists with in-depth

knowledge and application knowhow.Providing a superior price-value proposition.

ENDURING APPLICATIONS FROM YASH PAPERS

Textbook covers would require to be changed twice a year. Before Yash Papers came in.

We researched. We customised. We manufactured. We tested. We improved. We

delighted. Our consistent focus on technology and service is the driving force leading to

superior performance.

THE BRAND MAY BE MULTINATIONAL. THE PACKAGING

PAPER YASH.

At Yash Papers, we combine the principles of teamwork, innovation and marketing.

The result is a loyal customer relationship with personal healthcare companies.

Addressing product safety, convenience and sophistication.Creating the best possible

products at home, work or on-the-go.

178

MANAGERIAL HIERARCHY

Name Position

Mr. G Narayana Chairman

Mr. Ved Krishna Managing Director

Ms. Manjula Jhunjhunwala Director

Mr. R.N. Chakraborty Executive Director

Mr. G.N. Gupta Director

Dr. P Banerjee Director

Ms. Sheetal Jhunjhunwala Director

Mr. Basantt Khaitan Director

Mr. Ramesh Narayan Director

Mr. Yash Krishna Director

Mr. K.D. Pudumjee Director

Mr. Nirupam Mishra Vice-President Marketing

Mr. Sachin K. Srivastava Assistant Manager Secretarial

Mr. Brijesh Maliwal Manager - HR

Mr. Atiq Ur Rahman Asst. Manager - Export

Mr. Shailesh Singh Asst. Marketing Manager

179

PAPER MANUFACTURING

TECHNOLOGY/PROCESS DESCRIPTION:

Yash Paper Limited manufactures paper of various qualities using Bagasse as raw

material. The production process is as follows:

Paper Manufacturing Process

Wood Chipping Digester Washing Screening

BleachingCausticing

RecoveryBoilers Evaporator

Bagasse FiberPreparation

Digester Washing Bleaching,Screeing &Cleaning

Waste Paper Waste Paper Processing

Stock PreparationExternal Pulp Slushing

Paper Machine &Finishing

180

BALANCE SHEET OF COMPANY

QUARTERLY RESULTS 2008-09

Rupees in lacs

3 monthsended

Corresponding3 months

ended in thepreviousperiod

Year to Datefigures for

CurrentPeriodended

Year to Datefiguresfor theprevious 15month period

endedParticulars

31/03/2009 31/03/2008 31/03/2009 31/03/2008Unaudited Unaudited Unaudited Audited

1. (a) Net Sales/Income from Operations 2315.77 1418.28 8358.14 5141.24(b) Other Operat ing Inco me 85.05 110.31 402.99 295.10

2400.82 1528.59 8761.13 5436.342. Expenditurea. Increase/decrease in stock in trade and work inprogress 53.66 65.89 35.50 (260.08 )b. Consumpt ion of raw materials 877.08 333.37 2745.87 1462.37c. Manufacturing expenses 340.34 218.42 1321.55 1016.36d. Power and fuel 379.28 181.02 1641.92 1158.52e. Employees cost 147.51 128.17 481.55 467.45f. Depreciation 159.13 174.97 633.90 548.70g.Other expenditure 293.97 196.11 1056.34 794.35h. Total 2250.97 1297.95 7916.63 5187.673. Profit from Operations before Other Income,Interest and 149.85 230.64 844.5 248.674. Other Income - - - -5. Profit before Interes t and Exceptional Items (3+4) 149.85 230.64 844.50 248.676. Inte rest 295.91 305.55 1136.53 787.707. Profit after Interest but before Exceptiona l Items(5-6) (146.06 ) (74.91) (292.03 ) (539.03 )8. Exceptional items9. Profit (+)/ Loss (-) from Ordinary Activit iesbefore tax (146.06 ) (74.91) (292.03 ) (539.03 )10. Tax expense (67.90) (353.58 ) (44.50) (214.80 )11. Net Profit (+)/ Loss (-) from (78.16) 278.67 (247.53 ) (324.23 )Ordinary Activit ies afte r tax (9-10)

12. Extr aordinary Item (net of tax expense Rs. ) - - - -13. Net Profit(+)/ Loss (-) for the per iod (11-12) (78.16) 278.67 (247.53 ) (324.23 )14. Paid-up equity share capital

181

(Face Value of the Share shal l be indicated) 2400.00 2256.55 2400.00 2256.5515. Reserve excluding Revaluation Rese rves as perbalance shee t of previous accounting year 1408.6316. Earnings Per Share (EPS) (0.33) 1.23 (1.03) (1.51)a) Basic and diluted EPS before Extraordinary itemsfor theperiod, for the year to date and for the previous year(not tob) Basic and diluted EPS afte r Extraordinary itemsfor theperiod, for the year to date and for the previous year(not to

(0.33) 1.23 (1.03) (1.51)

- No. of shares 15796989 15796989 15796989 15796989- Percentage of shareholding 65.82 70.01 65.82 70.0118. Promoters and promoter groupShareholding **a) Pledged/Encumbered- Number of shares 3168600 3168600 3168600 3168600- Percentage of shares (as a % of the totalshareholding of 38.63 46.81 38.63 46.81- Percentage of shares (as a% of the total sharecapital of 13.20 14.04 13.20 14.04b) Non-encumbered- Number of Shares 5034411 3599911 5034411 3599911- Percentage of shares (as a% of the to talshareholding of 61.37 53.19 61.37 53.19- Percentage of shares (as a % of the total sharecapital of 20.98 15.95 20.98 15.95

Particulars Quarter endedNine months

Ended

Twelvemonthsended

Period ended31 .03.2008

31.12.2008 31.12.2007 31.12.2008 31.12.2007 Audited1. Net Salesa)Gross sales/income from operation 2358.90 1207.06 6309.44 4088.30 5649.35

Less: Excise Duty 138.59 123.29 345.65 363.74 508.112220.31 1083.77 5963.79 3724.56 5141.24

b)Other Operating Income 128.10 108.78 396.52 141.37 295.102. Total Operating Income 2348.41 1192.55 6360.31 3865.93 5436.343. Total Expenditure 2127.65 1139.43 5665.66 3845.83 5187.67a. (Increase)/decrease in stock in trade 56.93 (254.62) (18.16) (329.56) (260.08)b.Consumptions of raw materials 655.62 366.20 1792.19 1110.65 1445.00c. Manufacturing expenses 345.67 281.63 1057.81 806.27 1033.73d.Power and fuel 525.17 324.85 1262.64 971.83 1158.52e.Employees cost 123.83 85.62 334.04 294.61 467.45f. Depreciation 157.42 125.08 474.77 391.88 548.70g.Other expenses 263.01 210.67 762.37 600.15 794.354.Profit from Operations before Other Income,Interest 220.76 53.12 694.65 20.10 248.675. Other Income 0.00 0.00 0.00 0.00 0.006. Profit before Interest and Exceptional Items 220.76 53.12 694.65 20.10 248.677.Interest 289.67 218.01 840.62 532.43 787.708.Profit/(Loss) after Interest but beforeExceptional (68.91) (164.89) (145.97) (512.33) (539.03)9. Exceptional Items 0.00 0.00 0.00 0.00 0.0010.Profit/ (Loss) from Ordinary Activities before (68.91) (164.89) (145.97) (512.33) (539.03)11. Tax Expense (0.60) 0.00 23.40 22.03 (214.80)12. Net Profit/(Loss) from ordinary Activities after (68.31) (164.89) (169.37) (534.36) (324.23)13. Extra Ordinary Items 0.00 0.00 0.00 0.00 0.0014. Net Profit/(Loss) for the period (68.31) (164.89) (169.37) (534.36) (324.23)15.Paid-Up equity share capital 2400.00 2166.55 2400.00 2166.55 2256.55

(Face value Rs.10/- each)16.Reserves excluding revaluation

reserves (as per balance sheet) 1408.6317.Earning per share (0.03) (0.08) (0.07) (0.25) (0.14)18. Public ShareholdingNumber of shares 15796989 15796989 15796989 15796989 15796989Percentage of shareholding 65.82% 72.91% 65.82% 72.91% 70.01%

183

(Rs. In Lacs)

Quarter ended Six monthsended

NinemonthsParticulars

30.09.2008 30.09.2007 30.09.2008 30.09.2007

Year ended31.03.2008Audited

Gross sales/income from operation 2198.17 1016.57 3995.56 2881.24 5649.35Less: Excise Duty 158.75 100.83 207.06 240.45 508.11Net sales 2039.42 915.74 3788.50 2640.79 5141.24Other Income 117.06 18.22 223.40 32.59 295.10Total Income 2156.48 933.96 4011.90 2673.38 5436.34Total Expenditure 1762.17 905.13 3220.66 2439.60 4638.97a. (Increase)/decrease in stock in trade (9.82) (130.08) (75.09) (74.94) (260.08)b. i. Consumptions of raw materials 644.09 261.47 1136.57 744.45 1445.00

ii. Manufacturing expenses 384.30 248.66 712.14 524.64 1033.73iii. Power and fuel 383.12 299.15 737.47 646.98 1158.52c. Staff cost 104.21 80.68 210.21 208.99 467.45d. Other expenses 256.27 145.25 499.36 389.48 794.35Interest 279.52 212.57 550.95 314.42 787.70Depreciat ion 161.40 122.95 317.35 266.80 548.70Profit before Tax (46.61) (306.69) (77.06) (347.44) (539.03)Provision for taxation- Current Tax including FBT 1.50 3.75 3.00 11.25 9.50- Deferred Tax 66.40 - 21.00 10.78 (224.30)Net Profit after Tax (114.51) (310.44) (101.06) (369.47) (324.23)Paid-Up equity share capital 2400.00 2166.55 2400.00 2166.55 2256.55

(Face value Rs.10/- each)Reserves excluding revaluationreserves (as per balance sheet) 1408.63Earning per share (0.05) (0.14) (0.04) (0.17) (0.14)Aggregate of Non Promoter ShareholdingNumber of shares 15796989 15796989 15796989 15796989 1,57,96,989Percentage of shareholding 65.82% 72.91% 65.82% 72.91% 70.01%

184

(Rs. In Lacs)

Year endedQuarter ended Threemonths

Six monthsended 31.03.2008Particulars

30.06.2008 30.06.2007 30.06.2008 30.06.2007 AuditedGross sales/income from operat ion 1792.04 941.34 1792.04 1864.67 5649.35Less: Excise Duty 48.31 58.91 48.31 139.62 508.11Net sale s 1743.73 882.43 1743.73 1725.05 5141.24Other Income 111.69 8.05 111.69 14.37 295.10Total Income 1855.42 890.48 1855.42 1739.42 5436.34Total Expenditure 1458.49 797.06 1458.49 1534.47 4638.97a. (Increase) /decrease in stock in trade (65.27) 9.08 (65.27) 55.14 (260.08 )b. i. Consumpt ions of raw materia ls 492.48 239.87 492.48 482.98 1445.00

ii. Manufactur ing expenses 327.84 158.60 327.84 275.98 1033.73iii. Power and fuel 354.35 196.98 354.35 347.83 1158.52c. Staff cost 106.00 67.33 106.00 128.31 467.45d. Other expenses 243.09 125.20 243.09 244.23 794.35Interes t 271.43 76.18 271.43 101.85 787.70Depreciation 155.95 100.67 155.95 143.85 548.70Profit before Tax (30.45) (83.43) (30.45) (40.75) (539.03 )Provision for taxa tion- Current Tax including FBT 1.50 1.25 1.50 7.50 9.50- Deferred Tax (45.40) - (45.40) 10. 78 (224.30 )Net Profit 13.45 (84.68) 13.45 (59.03) (324.23 )Paid-Up equity share capital 2256.55 2166.55 2256.55 2166.55 2256.55

(Face value Rs.10/- each)Reserves excluding revalua tion

reserves (as per balance shee t) 1408.63Earning per share 0.00 0.00 0.00 0.00 0.00Aggregate of Non Promoter ShareholdingNumber of shares 1,57,96,989 1,54,21,756 1,57,96,989 1,54,21,756 1,57,96,989Percentage of shareholding 70.01% 71.18% 70.01% 71.18% 70.01%

185

QUARTERLY RESULTS 2007-08

Quarter ended Particular s Twelvemonths

Fifteenmonths Year ended

31.03.2008 31.03.200731.12.2007Unaudited

31.03.2008Unaudited

31.12.2006Audited

1564.64 923.33 Gross sales/ income from operat ions 4088.30 5652.94 3412.92146.36 80.71 Less: Excise duty 363.74 510.10 319.701418.28 842.62 Net sale s 3724.56 5142.84 3093.22

110.31 6.32 Other income 141.37 251.68 36.201528.59 848.94 Total income 3865.93 5394.52 3129.421122.98 737.41 Total expenditure 3453.95 4576.93 2738.66

65.89 46.06 a. (Increase) / decrease of stock -in -trade (329.56 ) (263.67 ) 35.90321.03 243.11 b. (i) Consumption of raw materia ls 1110.65 1431.68 858.34230.76 117.38 (ii) Manufacturing expenses 806.27 1037.03 584.40181.02 150.85 (ii i) Power and 971.83 1152.85 462.30128.17 60.98 c. Staff cost 294.61 422.78 239.61

196.11 119.03 d. Other expenses 600.15 796.26 558.11

305.55 25.67 Interes t 532.43 837.98 51.16174.97 43.18 Depreciation 391.88 566.85 160.30(74.91) 42.68 Profit / (Loss) before tax

Provision for taxa tion(512.33 ) (587.24 ) 179.30

0.00 6.25 - Current tax including FBT 11.25 11.25 56.90(353.58 ) 10.78 - Deferred tax 10.78 (342.80 ) 12.31278.67 25.65 Net profit / (Loss) (534.36) (255.69 ) 110.092256.55 2166.55 Paid-up equity share capital

(Face value Rs.10/ - each)Reserves excluding revalua tion

2166.55 2256.55 2066.55

reserves (as per balance shee t) 1717.501.23 0.12 Earnings per share - basic and diluted

(Rs.) [Not annuali sed]Aggregate of non-promoter shareholding

0.00 0.00 0.53

1,57,96,989 1,54,21,75 Number of shares 1,57,96,989 1,57,96,989 1,54,21,7570.01% 71.18% Percentage of shareholding 72.91% 70.01% 74.63%

Rs. in lacsQuarter ended Nine months

endedTwelve

months endedYear ended

31.12.2007 31.12.2006

Particulars

30.09.2007Unaudited

31.12.2007Unaudited

31.12.2006Audited

1207.06 866.23 Gross sales/ income from operations 2881.24 4088.30 3412.92123.29 84.70 Less: Excise duty 240.45 363.74 319.701083.77 781.53 Net sales 2640.79 3724.56 3093.22108.78 20.40 Other income 32.59 141.37 36.201192.55 801.93 Total income 2673.38 3865.93 3129.421014.35 765.65 Total expenditure 2439.60 3453.95 2738.66(254.62) (24.16) a. (Increase)/ decrease of stock-in-trade (74.94) (329.56) 35.90366.20 245.39 b. (i) Consumption of raw materials 744.45 1110.65 858.34281.63 154.86 (ii) Manufacturing expenses 524.64 806.27 584.40324.85 160.09 (iii) Power and fuel 646.98 971.83 462.3085.62 48.50 c. Staff cost 208.99 294.61 239.61

210.67 180.97 d. Other expenses 389.48 600.15 558.11

218.01 13.31 Interest 314.42 532.43 51.16125.08 40.70 Depreciation 266.80 391.88 160.30

(164.89) (17.73) Profit / (Loss) before taxProvision for taxation

(347.44) (512.33) 179.30

0.00 8.78 - Current tax including FBT 11.25 11.25 56.900.00 34.90 - Deferred tax 10.78 10.78 12.31

(164.89) (61.41) Net profit / (Loss) (369.47) (534.36) 110.092166.55 2066.55 Paid-up equity share capital

(Face value Rs.10/- each)Reserves excluding revaluation

2066.55 2166.55 2066.55

reserves (as per balance sheet) 1717.500.00 0.00 Earnings per share - basic and diluted

(Rs.) [Not annualised]Aggregate of non-promoter shareholding

0.00 0.00 0.53

1,57,96,989 1,54,21,756 Number of shares 1,57,96,989 1,57,96,989 1,54,21,75672.91% 74.63% Percentage of shareholding 72.91% 72.91% 74.63%

187

Quarter ended Nine months ended Year endedParticulars 31.12.2006

30.09.2007 30.09.2006 30.09.2007 30.09.2006 Audited1016.57 922.00 Gross sales/income from operation 2881.24 2623.23 3412.92100.83 92.04 Less: Excise Duty 240.45 235.00 319.70915.74 829.96 Net sales 2640.79 2388.23 3093.2218.22 3.92 Other Income 32.59 15.80 36.20933.96 833.88 Total Income 2673.38 2404.03 3129.42905.13 743.93 Total Expenditure 2439.60 2049.55 2738.66

(130.08) 15.89a. (Increase)/decrease in

stock in trade (74.94) 60.06 35.90261.47 211.20 b. i. Consumptions of raw materials 744.45 612.95 858.34248.66 149.95 ii. Manufacturing expenses 524.64 429.54 584.40299.15 119.83 iii. Power and fuel 646.98 302.21 462.3080.68 81.93 c. Staff cost 208.99 191.11 239.61145.25 165.13 d. Other expenses 389.48 453.68 558.11

212.57 9.99 Interest 314.42 37.85 51.16122.95 40.20 Depreciation 266.80 119.60 160.30

(306.69) 39.76 Profit / (Loss) before Tax (347.44) 197.03 179.30

3.75 4.32Provision for taxation- Current Tax including FBT 11.25 48.12 56.90

0.00 (7.92) - Deferred Tax 10.78 (22.59) 12.31(310.44) 43.36 Net Profit / (Loss) (369.47) 171.50 110.092166.55 2066.55 Paid-Up equity share capital 2166.55 2066.55 2066.55

(Face value Rs.10/- each)Reserves excluding revaluation

reserves (as per balance sheet) 1717.50

0.00 0.20Earning per share - basic and diluted(Rs.) [Not annualised] 0.00 0.83 0.53

1,57,96,989 1,54,21,756Aggregate of Non Promoter ShareholdingNumber of shares 1,57,96,989 1,54,21,756 1,54,21,756

72.91% 74.63% Percentage of shareholding 72.91% 74.63% 74.63%

Rs. In lacsQuarter ended

ended

Six months ended

30.06.2007 30.06.2006Particulars

30.06.2007 30.06.2006Year ended31.12.2006

Audited941.34 844.89 Gross sales/income from operation 1864.67 1701.23 3412.9258.91 59.79 Less: Excise Duty 139.62 142.96 319.70882.43 785.10 Net sales 1725.05 1558.27 3093.22

8.05 1.25 Other Income 14.37 11.88 36.20890.48 786.35 Total Income 1739.42 1570.15 3129.42797.06 661.47 Total Expenditure 1534.47 1305.62 2738.66

9.08 11.26 a. (Increase)/decrease in stock in trade 55.14 44.17 35.90239.87 207.64 b. i. Consumptions of raw materials 482.98 401.75 858.34158.60 143.00 ii. Manufacturing expenses 275.98 279.59 584.40196.98 97.78 iii. Power and fuel 347.83 182.38 462.3067.33 55.23 c. Staff cost 128.31 109.18 239.61125.20 146.56 d. Other expenses 244.23 288.55 558.1176.18 14.78 Interest 101.85 27.86 51.16100.67 40.21 Depreciation 143.85 79.40 160.30(83.43) 69.89 Profit before Tax

Provision for taxation(40.75) 157.27 179.30

1.25 6.80 - Current Tax including FBT 7.50 43.80 56.90- (7.83) - Deferred Tax 10.78 (14.67) 12.31

(84.68) 70.92 Net Profit (59.03) 128.14 110.092166.55 2066.55 Paid-Up equity share capital

(Face value Rs.10/- each)Reserves excluding revaluation

2166.55 2066.55 2066.55

Reserves (as per balance sheet) 1717.50(0.39) 0.34 Earning per share

Aggregate of Non Promoter Shareholding(0.27) 0.62 0.53

1,54,21,756 1,57,20,189 Number of shares 1,54,21,756 1,57,20,189 1,54,21,75671.18% 76.07% Percentage of shareholding 71.18% 76.07% 74.63%

189

Particular s Quarter ended Year ended31.03.2007Unaudited

31.03.2006Unaudited

31.12.2006Audited

Gross sales/ income from operat ions 923.33 836.31 3412.92Less: excise duty 80.71 83.17 319.70Net sale s 842.62 753.14 3093.22Other income 6.32 10.63 36.20Total income 848.94 763.77 3129.42Total expenditure (a+b+c+d) 737.41 624.11 2738.66a. (Increase) / decrease of stock-in-trade 46.06 32.91 35.90b. (i) Consumption of raw materia ls 243.11 194.11 858.34

(ii) Manufactu ring expenses 117.38 136.60 584.40(ii i) Power and fuel 150.85 84.60 462.30

c. Staff cost 60.98 53.96 239.61d. Other expenses 119.03 121.93 558.11

Interes t 25.67 13.09 51.16Depreciation 43.18 39.19 160.30Profit before taxProvision for taxa tion

42.68 87.38 179.30

- Current tax including FBT 6.25 37.00 56.90- Deferred tax 10.78 (6.84) 12.31Net profit 25.65 57.22 110.09Paid-up equity share capital

(Face value Rs.10/ - each)Reserves excluding revalua tion

2166.55 2066.55 2066.55

reserves (as pe r balance shee t) 1717.50Earnings per share - basic and diluted(Rs.) [Not annuali sed]Aggregate of non-promoter shareholding

0.12 0.28 0.53

Number of shares 1,54,21,756 1,57,97,189 1,54,21,756Percentage of shareholding 71.18% 76.44% 74.63%

190

10-YEAR FINANCIAL SUMMARYRs. in lacs

OPERATING RESULTS

Mar-99 Mar-00 Mar-01 Mar-02 Dec-02(Nine Month)

Operating Results

Sales And OtherIncome

1729.72 1905.16 2246.45 2195.19 1918.23

Raw Material 407.905 449.01 432.60 413.14 376.33

ManufacturingExpenses

288.38 339.59 432.06 435.24 266.66

Power And Fuel 276.87 227.84 259.92 242.44 222.62

Stores AndRepairs

110.92 102.23 120.26 113.67 98.41

Salaries AndWages

122.10 148.70 161.22 158.25 140.32

AdministrativeAnd SellingExpenditure

237.10 296.52 448.13 415.48 389.94

Interest 147.69 149.52 133.87 141.64 80.57

Earning BeforeTax And

Depreciation

138.71 191.75 258.39 275.33 343.34

Depreciation 103.93 107.42 115.44 131.86 104.10

Provision ForTaxation

Current Tax 3.70 9.75 12.50 11.00 18.84

Deferred Tax - - 55.29 85.24

Net Profit 31.08 74.58 130.45 77.18 135.16

Earnings PerShare (Rs.)

0.81 1.93 3.37 2.00 3.50

Dividend % - - 5.00 10.00

191

Dec-03 Dec-04 Dec-05 Dec-06 Dec-08(15 Month)

Operating Results

Sales And OtherIncome

2725.05 2932.42 2975.17 3413.21 6204.53

Raw Material 614.84 705.80 805.79 858.34 1445.00

ManufacturingExpenses

425.33 441.96 522.43 584.40 1033.73

Power And Fuel 488.72 353.98 393.61 462.30 1158.52

Stores AndRepairs

101.86 150.90 146.43 200.76 315.15

Salaries AndWages

180.41 187.80 222.14 239.61 467.45

AdministrativeAnd SellingExpenditure

564.58 609.99 583.27 677.03 987.30

Interest 87.90 73.09 59.71 51.16 787.71

Earning BeforeTax And

Depreciation

261.61 408.90 241.79 339.61 9.67

Depreciation 141.64 142.84 147.72 160.31 548.70

Provision ForTaxation

Current Tax 39.55 95.75 52.00 56.90 9.50

Deferred Tax (7.07) 11.81 (55.24) 12.31 (224.30)

Net Profit 87.49 158.50 97.31 110.09 (324.23)

Earnings PerShare (Rs.)

2.26 4.10 0.90 0.53 (1.51)

Dividend % 10.00 12.50 - - -

192

FINANCIAL SUMMARY ASSETS EMPLOYEDMar-99 Mar-00 Mar-01 Mar-02 Dec-02

(NineMonth)

Financial SummaryAssets Employed

Fixed Assets (AtCost)

2204.25 2353.59 2691.67 2845.29 2930.64

Fixed Assets (Net) 1600.63 1669.53 1906.28 1949.92 1944.46

Investments 5.25 5.31 5.31 1.81 1.76

Current Assets (Net) 446.10 520.48 540.56 499.98 379.99

Total Assets 2051.98 2195.32 2452.15 2451.71 2326.21

Financed By

Total Shareholders'Funds

1203.04 1284.89 1420.13 1537.24 1719.68

Share Capital 386.55 386.55 386.55 386.55 386.55

Reserve And Surplus(Net)

816.49 898.34 1033.58 787.47 884.67

Deferred TaxLiability

- - - 363.22 448.46

Borrowings 848.94 910.44 1032.02 914.47 606.53

Long Term 576.41 600.06 736.13 677.31 560.28

Short Term 272.53 310.38 295.89 237.16 46.25

Debt: Equity 0.70 0.71 0.73 0.59 0.35

Other Information

Production In MT 10980 12319 12757 12820 11188

193

Dec-03 Dec-04 Dec-05 Dec-06 Dec-08(15

Month)

Financial SummaryAssets Employed

Fixed Assets (AtCost)

2987.38 3122.33 4200.40 10631.22 13423.32

Fixed Assets (Net) 1898.21 1906.86 2855.71 9142.69 11431.64

Investments 0.26 0.06 410.67 0.06 0.06

Current Assets(Net)

510.12 569.24 1673.90 1273.13 1542.69

Total Assets 2408.59 2476.16 4940.28 10415.88 12974.39

Financed By

Total Shareholders'Funds

1753.04 1868.72 4096.91 4194.31 3874.24

Share Capital 386.55 386.55 2066.55 2066.55 2279.65

Reserve AndSurplus (Net)

925.11 1028.98 1632.41 1717.50 1408.63

Deferred TaxLiability

441.38 453.19 397.95 410.26 185.96

Borrowings 655.55 607.44 843.37 6221.57 9100.15

Long Term 452.14 329.67 595.50 5934.89 7838.46

Short Term 203.41 277.77 247.87 286.68 1261.69

Debt: Equity 0.37 0.33 0.21 1.48 2.35

Other Information

Production In MT 14795 14762 15063 16158 24929

194

CHAPTER 6

DEMAND AND SUPPLY

MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL PAPER AND BOARD INDUSTRY

Paper touches our lives every moment. Paper products are used in education, healthcare,

food, trade, communication and packaging. The global paper and board industry is

considered to be a key economic activity, accounting for over 2.5 percent of the world’s

industrial production (in value terms) and about two percent of its trade. The industry is

sensitive to macroeconomic trends and process cyclicality, influenced by economic

advancement, industrial output, global trade, consumption, promotion , population,

literacy and demand-supply. Worldwide, the industry remained relatively fragmented

with the top five paper manufacturers controlling between 20–40 percent of the regional

markets where they operated. The estimated consumption of paper and board in 2007

across key regions of the world is indicated in the table below:

The demand for printing and writing paper grew slowly in 2007 with the global demand

being one percent higher than in 2006. Growth in emerging markets such as Eastern

Europe and China was strong, while demand in North America declined by three percent

due to economic deceleration. In Western Europe, the demand for printing and writing

paper rose by over two percent and the demand for sub-grades increased coated magazine

paper demand (speciality paper) by nearly four percent. With rising internal consumption

in Europe, paper exports (especially the coated magazine varieties) to other regions

declined considerably in 2007.

195

The demand for carton board was stronger in 2007 vis-à-vis2006, especially in Europe

and North America. Besides, China and India witnessed a significant hike in demand for

this variety, driven by robust economic growth, high levels of onsumerism as well as

enhanced industrial and trade activities. The global demand for newsprint moderated by

one percent in 2007 as advertising spending and daily newspaper circulations declined,

especially in the USA, where demand dropped by a significant 10 percent. In Europe,

digital newspapers failed to make a dent over the traditional format, resulting in

unchanged demand for newsprint. However, Asian demand (excluding Japan) surged by

six percent with China contributing to a whopping two-thirds of this increase. Besides,

growing literacy and new technology resulted in India emerging as the second largest

newspaper market in the world (source: World Association of Newspapers). The study

shows that the four largest newspaper markets comprise China, India, Japan and the USA

with 107, 99, 68 and 51 million copies sold daily. Interestingly, 74 of the world’s 100

best-selling dailies are published in Asia. India, China and Japan together account for 62

of them. The demand for wood products was strong in the first half of 2007, but the

market became heavily oversupplied in the latter half. The situation deteriorated towards

the end of the year as a result of weaker seasonal demand in Europe and difficult market

conditions in Japan and North America.

Outlook: The demand for paper varied considerably from region-to-region. In USA the

demand for paper and paper products is likely to be modest over the short- to medium-

term. Similarly, the fast-maturing economies of Western Europe and Japan are expected

to witness a slowdown in the demand and consumption of paper and paper products.

However, this deceleration is expected to be more than compensated by robust growth

continuing out of Eastern Europe and Asia (China and India).The world demand for

paper and paperboard is forecast to grow by 2.1 percent annually in the long-

term,reaching a projected 402 million tonnes by 2010 and an estimated 490 million

tonnes by 2020. Consequently, the per capita paper consumption is also expected to rise

from 54 kg in 2003 to 65 kg by 2020 (Pöyry's World Paper Markets 2020).

196

INDIAN PAPER INDUSTRY

The Indian paper industry is among the fastest-growing regions in line with India’s GDP

growth (second fastest at 9 percent in 2007-08). Interestingly, though it took nearly 50

odd years to reach a demand level of around seven million tonnes of paper, the country

expects to add the next seven million tonnes over a mere seven years to reach 14 million

tonnes by 2015 (Indian Paper Manufacturers Association).The Indian paper market,

growing thrice as fast as the global average, is ranked 18th globally in production and

15th in consumption. The country accounts for 4.7 percent of the Asian and 1.5 percent

of the world’s paper consumption. It provides employment to more than 1.3 million

Indians and contributes around Rs 25 billion annually to the Indian exchequer by way of

taxes.

Structure: Low focus on technology, scale and resource availability fragmented the

Indian paper industry. There are nearly 568 operational mills in India, out of which most

are privatized , the rest government-owned. The country’s paper industry consumes a

large variety of raw materials comprising agro-residues, virgin fibre and recycled fibre,

among others, to produce a vast portfolio of paper products.

READING, WRITING AND ARITHMETIC

The global paper and paperboard products industry was about 350 million tonnes

per annum, recording an annual growth of two percent.

The USA was the leading global manufacturer of paper and paperboard (around

90 million tonnes per annum) and consumer (about 100 million tonnes per year).

Europe accounted for roughly 108 million tonnes per annum of paper and pulp

production, consuming 94 million tonnes per annum.

197

Asia accounted for around 37 per cent of the global demand, up from less than 20

percent in 1980. This was primarily due to higher economic growth in China and

India.

In an interesting trend, Asia intensified its production to meet the growing

demand for paper and paper board and reduce its dependence on imports.

Indian paper industry billionIndian paper industry

Rs. 211 billion

NewsprontRs. 33 Billion

Paper and paper boardsRs. 211 billion

Speciality PaperRs. 13 Billion

Writing And Printing PaperRs. 76 Billion

Industrial PaperRs. 89 Billion

DuplexRs. 25 Billion

India imports a bulk of itsspeciality paperrequirements

Gray And White / MGPoster Rs. 16 Billion

KraftRs. 48 Billion

198

DEMAND/ CONSUMPTION

India’s paper and paper board demand was estimated at around eight million tonnes in

2007, the market recording a near eight percent growth. Value-added coated paper/ paper

board recorded the fastest growth at around 20 per cent, driven by rising disposable

ncomes, higher spending propensity and rising sophistication. It is worth noting that India

imports the bulk of its Rs 13-billion worth of speciality paper requirements. Similarly, the

country also imports a large percentage of its MG poster paper requirements. This

provides attractive import substitution opportunities for players like Yash Papers, focused

on meeting the attractively growing niche industrial paper requirements. According to

fresh estimates by the Indian Paper Manufacturing Association (IPMA), the domestic

demand for paper is expected to touch 15 million tonnes by 2015 on account of an

emphasis on literacy, increased percapita income, increasing use of photocopiers and

printers, higher export growth and demand for quality packaging.

PRODUCT-WISE DEMAND (‘000 tonnes)

FY’06 INCREASE

%

FY’

07(E)

INCREASE

%

FY’

08(E)

INCREASE

%

Creamwove 1232 3.9 1281 3.9 1332 3.9

Maplitho 601 4.7 631 4.9 661 4.7

Copier 147 15.7 170 15.6 197 15.8

Coated paper 317 8.5 346 9.1 378 9.2

Industrial

paper

3600 6.6 3819 6.0 4051 6.1

Speciality

paper

258 7.9 277 7.4 297 7.2

199

CAPACITY/ PRODUCTION

The aggregate paper manufacturing capacity in India is estimated at around 7.5 million

tonnes per annum. The country’s incremental paper requirement (demand less

production) was met through increased capacity utilisation as opposed to greenfield asset

commissioning. Jaakko Poyry, a leading consultant on forestry and environment sectors,

estimated India’s installed papermanufacturing capacity at a comparatively slower

growth of 3.70 percent to 8.75 million tonnes per annum in 2008-09.Paper manufacturers

are increasingly looking at securing raw material reserves before committing fresh

investments. A strong case in point is Ballarpur’s (BILT) acquisition of Sabah Forest

Industries, the largest integrated pulp and paper mill in Malaysia, which holds the

concession for a massive 2.89 lakh hectares of forest land. Post this acquisition, BILT

announced capacity expansions at its paper mills in India.Together with this, the

country’s paper industry announced investments worth USD 2.5 billion over the next

two–three years to add two million tonnes of fresh capacity, improve competitiveness and

eat into imports. These new capacities are expected to be world-class not only in

technology but also environmental compliances, enabling investors to enhance

profitability.

Prices

Paper prices rose across the board over two years concurrent with a visible shift in paper

demand from low-quality to higher-end grades. Coupled with a strong ‘cost push’ (end-

paper prices increasing on account of higher input costs), there was a respectable growth

in realisations (indicated in the chart) for a number of speciality and high-end paper

varieties comprising poster paper, copier paper, coated paper, creamwove and maplitho,

among others. A near-doubling of paper demand to 15 million tonnes by 2015, combined

with a slower and non-commensurate capacity growth, is likely to bolster average end-

product realisations.

200

DEMAND DRIVERS

ECONOMIC BOOM AND LIFESTYLE CHANGES

With India’s economic growth rate more than doubling over the last decade and

recording an impressive 9.0 percent in 2007-08, paper demand is increasing rapidly.

Growing cell phone subscribers needing bills, credit-card statements ,increased print-

media advertisements, greater number of purchases and innovative packaging, etc, are

catalyzing paper demand .Growing literacy: Rising literacy (1.5 percent annual growth as

per National Sample Survey Organization ) is directly proportional to paper consumption

growth .India’s average literacy rate increased 200 basis points over the two years leading

to 2008, attributed to an augmented investment in education. Government spending

surged 12 times over the last 10-15 years in education, along with an 11-time increase in

private sector spending during the same period. According to the Department of

Education, the government is implementing policies to ensure a minimum eight years of

education to every Indian citizen by 2010. Print media: India’s print media is the most

significant economic and business category within the media sector. Almost 48 percent of

the total media buying goes to print. It touches a population of around 250 million with

an urban penetration of 45 percent. The country’s print media is fragmented with 2,094

registered newspapers,89 percent of which are Hindi and vernacular mastheads .The print

media enjoys a massive readership of 225.3 million. Besides, an increasing number of

new dailies in various vernaculars are launched annually, casting a wider readership base

and strengthening the demand for newsprint and other varieties (through advertising).

CORPORATE GROWTH:

Corporate growth drives paper demand due to the necessity to maintain records and

increase regulatory filings. The increasing integration of global corporates with

Indian counterparts strengthened documentation needs manifold, catalysing paper

201

requirement. Besides, the expanding operations of Indian businesses is creating fresh

avenues for external funding from banks and other institutions (domestic and

international), necessitating significant documentation.

INDUSTRIAL TRADE:

India emerged as a preferred global sourcing destination for a number of sectors,

fuelling paper demand. Consider this: exports grew from around US$ 115 billion in

2006-07 to approximately US$ 155 billion in 2007-08. Moreover, the Government set

an ambitious export target of US$ 200 billion in 2008-09, which will drive demand.

WHITE GOODS AND CONSUMER DURABLES:

The demand for electronic goods in India is expected to quadruple in five years with

rising disposable income levels. This is expected to create a significant opportunity

for packaging boards. Besides, over the next few years, the consumption of mobile

phones will grow at approximately 41 percent annually, televisions at 13 percent and

set-top boxes (STBs) at 43 percent. Eleven major listed FMCG companies averaged

20 percent sales growth in 2007-08, indicating a spurt in paper demand for packaging,

billing and advertisements.

COMMODITY EXPORTS:

The Agricultural and Processed Food Export Development Authority of India

(APEDA) envisions agricultural exports of the six major agro commodities to the

extent of Rs 100 billion a year. The consumption of corrugated boxes in India is

under 20 percent of all packaging material, a figure expected to improve

considerably, considering bright export prospects. Incidentally, the global average for

the consumption of corrugated cartons is over 35 percent of all packaging items.

202

OUTLOOK

The Indian paper sector is witnessing a massive USD-2.5 billion capital expenditure

programme, the largest in its existence, expected to enhance manufacturing capacity by 2

million tonnes per annum. Out of this, around 1.5 million tonnes will be for writing and

printing paper with the rest for industrial paper varieties. The demand for industrial paper

is expected to increase by around 7.5 percent on the back of a healthy growth in the

manufacturing sector, whereas writing and printing paper demand is projected to grow by

7 percent (source: CRISIL). Realisations and margins of industrial paper are expected to

remain robust with capacity additions matching the incremental demand over the next

two three years, resulting in a stable demand-supply situation.

GRADE-WISE DEMAND FORECAST IN INDIA

(‘000 tonnes)

VARIETY 2006-07 2007-08 2008-09 (E)

Writing And

Printing Paper

22419

2419

2555 2701

Uncoated Paper 32075 2182 2296

Coated Paper 344 373 405

Industrial Paper 3841 4100 4379

Kraft 2110 2263 2427

MG Poster 310 315 320

203

The domestic paper industry was significantly underpenetrated . Although India had the

second largest population in the world at around 1.1 billion, its per capita paper

consumption at around seven kg remains less than one-sixth the global average.

However, this scenario will change with the demand for paper and paperboards in India,

projected to grow at a CAGR of over 6.5 percent to an estimated eight million tonnes in

2008-09. Within Asia, which is growing faster than other large-scale paper-consuming

continents, India is expected to report the sharpest demand surge on account of an

increasing focus on literacy, corporate profitability, expanding population, higher

disposable incomes and larger spending. It is indicated that a mere one kg per capita

increase in consumption in the country can potentially spur incremental paper demand to

the extent of a million tonnes per annum.

Total demand for various grades of paper in India up to 2020 (tonnes)

Paper grade 2010 2015 2020

Newsprint 1400 2000 2400

Printing and

writing paper

3200 4000 5200

Carton boards 1400 1800 2400

Container boards 1900 2500 3800

Others 400 600 800

Total 8300 10900 14600

204

INTERNAL CONTROLS

Yash Papers is adequately equipped with an extensive network of internal control

procedures to safeguard assets against loss from illegal use or disposal. The

commissioning of the ERP software enables quick information dissemination for prompt

decision-making, enhancing integrated pan-organisation functionality. The internal

control systems are also devised to ensure the reliability, transparency and accuracy of all

financial records and statements. An internal audit team regularly liaises with all

management tiers and statutory auditors and forwards all significant issues to the Audit

Committee of the Board. All issues raised by the internal audit are being suitably

addressed and rectified.

CAUTIONARY STATEMENT

Statements in the Management Discussions and Analysis describing the Company's

objectives, projections, estimates , expectations may be ‘forward-looking statements’

within the meaning of the applicable securities laws and regulations. Actual results could

differ materially from those expressed or implied. Important factors that could make a

difference to the Company's operations include economic demand/supply and price

conditions in the domestic and overseas markets in which the Company operates, price of

non-coking coal in the overseas market, changes in the Government regulations, tax-laws,

other statutes and incidental factors.

The Company assumes no responsibility to publicly amend, modify or revise any

forward-looking statements on the basis of any subsequent development, information or

events.

205

THE DECEMBER 2008 CREP DEADLINE:

India’s paper manufacturers are required to comply with stringent CREP (Corporate

Responsibility for Environment Protection) requirements from December 2008,

eliminating chlorine use and graduating to oxygen as the bleaching agent. This

entails a revamp of the entire bleaching process. This key technology change will

necessitate an investment of about Rs 11,000 – 12,000 per tonne of paper.

BUDGET REVIEW, 2008-09:

The excise duty on paper, paper board and articles manufactured out of non-

conventional raw materials was reduced from 12 percent to 8 percent in Budget

2008-09. Further, the excise duty on clearances up to 3,500 MT was reduced from 8

percent to nil; excise duty was also cut from 12 percent to 8 percent for most paper

varieties.

TUF FOR THE PAPER INDUSTRY:

The Indian paper industry, reeling under the twin pressure of raw material crunch

and technology fatigue, demanded the creation of a Technology Upgradation Fund

(TUF). The FICCI survey, based on industry feedback, suggested a rationalization of

custom duties on the import of plant and machinery for the paper industry, creation

of TUF on the lines of the textile industry and providing interest and capital subsidy

to the paper industry for technology enhancement.

206

DETAILS FOR EACH CLASS OF GOODS MANUFACTURED,

SOLD AND STOCKS DURING THE PERIOD ENDED 31-03-2008 IN

YASH PAPER

CAPACITY

PRODUCTION, SALES AND STOCKS OF FINISHED GOODS

Opening StockClass ofGoods

UnitQuantity Value(Rs.)

ProductionQuantity

Kraft andPosterPaper

MT 301.6698(515.5440)

55,47,755(91,49,865)

24,928.5821(16,158.3152)

Product Unit LicensedCapacity

InstalledCapacity

Kraft, Writing Printing and

other uncoated paper

MT

MT

50,600

(50,600)

39,100

(16,000)

207

* Denotes Previous year Quantity/Value (Rs.)

RAW MATERIAL CONSUMED

Period ended 31-03-2008 Period ended 31-12-2006RawMaterial Quantity

(MT)Amount

(Rs.)Quantity

(MT)Amount

(Rs.)Bagasse 50,874.805 8,44,59,582 30,763.395 4,56,52,417

Old Gunny /Jute Goods

6,848.270 2,96,04,912 4,872.600 1,76,81,044

CorrugatedCartons

Nil Nil 62.547 3,95,759

ImportedWaste

Paper/ Pulp

1,671.220 3,04,35,093 1,794.800 2,21,05,162

Total 14,44,99,587 8,58,34,382

VALUE OF MATERIAL CONSUMED

RawMaterial

Imported Value Indigenous Value

(Rs.) % (Rs.) %Raw

Material3,03,58,899

(2,21,05,162)21.01

(25.75)11,41,40,688(6,37,29,220)

78.99(74.25)

Stores &Spares*

59,818(1,95,490)

0.05(0.28)

12,13,74,669(7,04,76,320)

99.95(99.72)

* Including chemicals grouped under manufacturing expenses.

Self Consumed Closing Stock SalesQuantity Value(Rs.) Quantity Value(Rs.) Quantity Value(Rs.)

4.4693

(4.4101)*

64,533

(44,277)*

1,297.9808

(301.6698)*

300,14,319

(55,47,755)*

23,927.8018

(16,367.7793)*

56,49,35,367

(34,12,91,781)*

208

CIF Value of Import

Capital Goods Rs. 33,717/- (Rs. 90,33,278/-)

Raw Materials andconsumables

Rs. 68,63,006/- (Rs. 88,48,801/-)

REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND

Nil Nil

EARNINGS IN FOREIGN EXCHANGE

FOB Value of Exports Rs. 4,06,703/- (Rs. 1,90,04,157/-)

EXPENDITURE IN FOREIGN CURRENCY

Travelling Rs. 93,176/- (Rs. 85,843/-)

Interest – Others Rs. 69,61,513/- (Rs. 16,29,909/-)

Others Rs. 18,242/- (Rs. 17,434/-)

209

OPERATIONS

Yash Company has achieved a production of 24,929 MT and sales of 23,928 MT during

the period ended 31st March 2008 against a production of 16,158 MT and sales of 16,368

MT in the previous year ended 31st December 2006. The Company achieved a gross

turnover of Rs.5649.35 lacs in the current period against Rs. 3412.92 lacs in the previous

year. The figures for the current period are for 15 months and therefore are not

comparable with the figures of the previous year. Reserves as on 31st March, 2008 stood

at Rs.1408.63 lacs, compared to Rs. 1717.50 lacs of the preceding year.

EXPORT

The Company exported 3526 MT of paper during the period ended 31st March 2008

against 1891 MT during the previous year ended 31st December 2006.

INSURANCE

The properties of Company comprising buildings, plant and machinery, other assets,

stocks, etc. were adequately insured against various risks. Utilisation of preferential issue

proceeds The Company has allotted 40,00,000 preferential warrants against 44,00,000

preferential warrants to M/s Sargam Exim Private Limited, an associate company of

promoters’ group, at Rs.11 each on March 23, 2007 after getting the approval of the

members of the Company in the Extraordinary General Meeting held on February 24,

2007,to part finance the value addition and cost escalation of the project cost and working

capital requirements out of the proceeds of the issue.

PROJECT

The power plant has become operational in March, 2007.The commercial production of

paper machine 3 was started in June, 2007. The soda recovery plant has become

operational in October, 2007.Project cost has again surged by Rs.485.42 lacs, from

210

Rs.10,900 lacs to Rs.11,385.42 lacs, excluding margin for working capital due to cost

overrun and value additions made in the project, which was financed by way of issue of

preferential warrants/shares, internal cash accruals and sundry creditors.

ISSUE OF SHARE WARRANTS AND CONVERSION INTO EQUITY

SHARES

Members at the Extraordinary General Meeting held on 24th February, 2007 approved

the allotment of 44,00,000 warrants of Rs.11 each to the associate company of the

promoters, to be converted in 44,00,000 equity shares of Rs.10 each at a premium of

Re.1. Accordingly, the Company issued 40,00,000 warrants (against 44,00,000 warrants)

to Sargam Exim Private Limited, an associate company of the promoters group. The

Company has converted 10,00,000 preferential warrants into 10,00,000 equity shares of

Rs.10 each at a premium of Re.1 on March 31, 2007. The Company has again converted

9,00,000 preferential warrants into 9,00,000 equity shares of Rs.10 each at a premium of

Re.1 on March 24, 2008. The said equity shares are listed on the Uttar Pradesh Stock

Exchange Association Limited, Kanpur and Bombay Stock Exchange Limited, Mumbai.

OUTLOOK

The Company has an encouraging way ahead because of a number of reasons that will

not only improve the realisations for us but also strengthen the ‘Yash Papers’ brand.

Firstly, it is shifting from white paper to colour paper, which will enhance our margins;

secondly, with the paper machine-3 (PM-3) coming fully on-stream in 2008- 09, our

capacities will increase facilitated by the improved paper quality; finally, our investment

in pulp making facility will help us minimise raw material cost as well as enhance

realisations through selling pulp in the open market. All these initiatives will start

fructifying from 2008-09 onwards. Accordingly, your Directors are reasonably confident

of achieving much better results in 2008-09.

211

HUMAN RESOURCE AND WELFARE

The Company considers its human resource to be its asset. The Company thus continues

to enhance its employees’ skills and keep them updated with industry dynamics. We

endeavour that our employees remain satisfied and have the best working environment.

We have the most cordial industrial relations. The Directors wish to place on record their

deep appreciation for dedication of the employees and their commitment to performance.

FIXED DEPOSITS

The Company was holding an aggregate sum of Rs.189.15 lacs on account of deposits

from the public, employees and shareholders as on March 31, 2008. Five depositors did

not claim their deposits amounting to Rs.1.88 lacs, which matured during the previous

years.

212

CHAPTER 7

TRADE PROFILE OF COMPANY

Yash paper is the global trading company, seeking for trade partners to start new business

deals and keep onwards the strong relationship. Our aim is to serve you the best as

holding on win-win solution. We are pleased to present you our products and services.

Your inquiry towards any information required is gladly appreciated.

Yash Papers specialize in low grammage unbleached Kraft Paper made by agricultural

residues such as Bagasse (sugar cane waste) and Jute bags.

BUSINESS

The largest manufacturer of low-grammage unbleached kraft paper through the

‘green’ route (bagasse raw material) in India.

Commenced the production of white paper (various grades of MG poster paper)

through the installation of paper machine III in 2007-08.With this, we possess the

largest installed capacity of poster paper in the country, producing up to 23,100

MT per year.

Commissioned an integrated infrastructure comprising a state-of-the-art 130-tpd

pulping stream, chemical soda recovery plant and a 6-MW cogeneration facility.

Realigned the Company’s operating period from the calendar year to a financial

year, resulting in a 15-month working period in 2007-08.

Focused on the development of customerspecific speciality paper grades.

213

Listed on the Uttar Pradesh Stock Exchange, Kanpur and Bombay Stock

Exchange, Mumbai.

PRODUCTS

Yash Paper Ltd. are Manufacturer & Exporters Of Yash Deluxe Plain Ribbed Kraft:-

Generic Products:- DEP - Deluxe Plain, DER - Deluxe Ribbed, SDP - Super Deluxe

Plain, SDR - Super Deluxe Ribbed. Yash Specialised Grades:- GYP - Golden Yellow

Plain, GYR - Golden Yellow Ribbed, WSK - Wet Strength Craft, LAM - Lamination

Grade, HIT - High Tear, KIT - Kite Grade, TIS - Unbleached Tissue, COL - Coloured

Grades.

Manufacture of speciality paper, out-performing the domestic paper industry

growth by a factor of two.

Product range comprising the manufacture of unbleached kraft paper including

hard tissues (28–30 GSM), wrapping grades (30–60 GSM) and

packaging/stationery grades (60–80 GSM) with average GSM range of 49–64.

Commenced the production of MG poster paper (26–70 GSM), extensively used

in FMCG (soaps, detergents,packaged food and health drinks, among others) and

pharmaceutical (band-aid and medicine packaging) applications.

Alternative paper varieties catering to the growing downstream demand for

matchboxes, bidi covers,cigarette recliners, gum tape, plywood, coated papers and

tea pouches, among others.

214

YEAR EVENTS

1981 - The company was incorporated on May and obtained the Certificate of

Commencement of business on 12th June. It was promoted by K.K. Jhunjhunwala. The

company's object is to manufacture of kraft paper.

The company set up a plant for manufacture of kraft paper with a capacity of 1940 TPA.

The capacity of the unit was increased to 4000 TPA with financial assistance from PKUP

and VPFC.

1991 - The company set up a Unit No.II with an installed capacity of 6000 TPA poster

paper.

1994 - 12 78 000 No. of equity shares of Rs.10 each issued subscribed and paid-up. 22 50

000 No. of equity shares of Rs.10 each were issued at a prem. of Rs.10 per share of which

67 500 shares were issued to the employees on preferential basis (only 29 200 shares

were taken up). Balance 12 82 500 No. of equity shares along with 38 300 shares not

taken up by employees were issued to the public. Additional 3 37 500 shares were

allotted to retain over-subscription (3 000 - 11% preference shares were redeemed on

10th September 1991 and 30 000 No. of equity shares of Rs.10 each were allotted in lieu

there of.

1996 - Performance was affected due to adverse market conditions and vagaries of power

supply.

- Co-generation unit started giving problems and developed technical snags. The

company has put an amount of Rs.31.07 lacs for additional balancing equipments to

overcome the aforesaid snags.

215

- The company entered into a tie up with M/s. Indace Ltd. U.K. for technology and design

and for executing the project. In India Indace Ltd. provided the consultancy to Nath Pulp

and Paper Mills Ltd. In return for the services rendered the company was to pay the

collaborators U.K. Pound Sterling 35 000.

1997 - Turnover declined marginally to Rs.16.78 crores due to sluggish market

conditions.

- The company undertook to set up facilities for manufacture of 30 TPD bagasse/hessian

based pulp and to increase the capacity of MG paper machine No.2 from 6000 TPD to 10

000 TPA with facilities to manufacture lower grammage kraft paper to facilitate lower

grammage (26 GSM to 33 GSM) kraft paper plant and machinery comprising bagasse

depther conveyors digesters washers etc. were to be installed.

- Company has allotted Equity Warrants of Rs.300 lakhs to promoters and their

associates.

2002-Mr A R Nighoskar resigns from Directorship of Yash Papers.

2005

-Delist equity shares from the Ahemedabad Stock Exchange (ASE) with effect from

January 28 2005.

-Yash Papers Ltd has informed that issue of 1 68 00 000 Equity Shares of Rs 10/- each

for cash at premium of Rs 4/- per equity share aggregating to Rs 2352 lacs by the

Company through prospectus will open on June 30 2005 & will close on July 08 2005.

2007

- Yash Papers Ltd has appointed Mr. Basant Kumar Khaitan and Mr. Ramesh Narayan as

Additional Director.

216

Report card of Company

Attribute Value Date

PE ratio -5.14 21/07/09

EPS (Rs) -1.03 Mar, 09

Sales (Rs crore) 24.01 Mar, 09

Face Value (Rs) 10

Net profit margin (%) -6.03 Mar, 08

Last dividend (%) 12.5 27/01/05

Return on average equity -8.94 Mar, 08

Yash Papers Ltd.

Quarter ending : March 2009

Details of Locked-in Shares

Sl.

No.Name of the Shareholder No. of Shares

Locked-in Shares as % of

Total No. of Shares

1 Ved Krishna 2,200,000 9.17

2 Megha Agro Products Ltd 773,100 3.22

3 Yash Krishna 700,000 2.92

4 Manjula Jhunjhunwala 460,000 1.92

5 Sargam Exim Pvt Ltd 3,334,500 13.89

Total 7,467,600 31.12

217

YASH PAPER LIMITEDQuarter March 2009

Date Begin 01 Jan 2009

Shareholding Pattern

Category of shareholder No. ofshareholders

Total no. ofshares

Total no. of shares held indematerialized form

Total shareholding as a% of total no. of shares

As a % of(A+B)

As a % of(A+B+C)

(A) Shareholding of Promoter andPromoter Group

(1) IndianIndividuals / Hindu Undivided

Family 5 3899871 3883871 16.25 16.25

Bodies Corporate 2 4303140 2868640 17.93 17.93Sub Total 7 8203011 6752511 34.18 34.18

(2) ForeignTotal shareholding of Promoter

and Promoter Group (A) 7 8203011 6752511 34.18 34.18

(B) Public Shareholding(1) Institutions

Mutual Funds / UTI 1 1000 - - -

Financial Institutions / Banks 1 100 100 - -Insurance Companies 1 211121 211121 0.88 0.88

Sub Total 3 212221 211221 0.88 0.88(2) Non-Institutions

Bodies Corporate 256 990386 984885 4.13 4.13Individuals

Individual shareholdersholding nominal share capital up to

Rs. 1 lakh17973 10393754 9769278 43.31 43.31

Individual shareholdersholding nominal share capital in

excess of Rs. 1 lakh118 4071702 4054802 16.97 16.97

Any Others (Specify) 51 128926 128326 0.54 0.54Any Other 50 126926 126326 0.53 0.53

Clearing Members & Trusts 1 2000 2000 0.01 0.01Sub Total 18398 15584768 14937291 64.94 64.94

Total Public shareholding (B) 18401 15796989 15148512 65.82 65.82Total (A)+(B) 18408 24000000 21901023 100 100

(C) Shares held by Custodians andagainst which Depository Receipts

have been issued - - - - -

Total (A)+(B)+(C) 18408 24000000 21901023 - 100

218

YASH PAPERS LIMITED

Distribution of Shareholding as on Quarter ending 31st March 2008 as per clause 35of Listing Agreement

Total shareholding as apercentage of totalnumber of shares

CategoryCode

Category ofshareholder

No. ofshareholders

Total no.of shares

No. ofshares held

in de-materialize

d form

Totalshareholding as a %of (A+B) 1

Totalshareholding as a %of(A+B+C)

(A)

Shareholdingof Promoterand PromoterGroup 2

(1) Indian

(a)Individuals/Hindu UndividedFamily

5 3899871 3883871 17.28 17.28

(b)

CentralGovernment/StateGovernment(s)

0 0 0 0 0

(c) BodiesCorporate 2 2868640 1968640 12.71 12.71

(d)FinancialInstitutions/Banks

0 0 0 0 0

(e) Any Other(specify) 0 0 0 0 0

Sub-Total(A)(1) 7 6768511 5852511 29.99 29.99

(2) Foreign

(a)

Individuals(Non-ResidentIndividuals /ForeignIndividuals)

0 0 0 0 0

(b) BodiesCorporate 0 0 0 0 0

219

(c) Institutions 0 0 0 0 0

(d) Any Other(specify) 0 0 0 0 0

Sub-Total(A)(2) 0 0 0 0 0

TotalShareholdingof Promoterand PromoterGroup(A)=(A)(1)+(A)(2)

7 6768511 5852511 29.99 29.99

(B)PublicShareholding3

(1) Institutions

(a) Mutual Funds /UTI 1 1000 0 0 0

(b)FinancialInstitutions /Banks

1 100 100 0 0

(c)

CentralGovernment /StateGovernment(s)

1 211121 211121 0.94 0.94

(d) VentureCapital Funds 0 0 0 0 0

(e) InsuranceCompanies 0 0 0 0 0

(f)ForeignInstitutionalInvestors

0 0 0 0 0

(g)

ForeignVentureCapitalInvestors

0 0 0 0 0

(h) Any Other(specify) 0 0 0 0 0

Sub-Total(B)(1) 3 212221 211221 0.94 0.94

220

(2) Non-institutions

(a) BodiesCorporate 277 1502693 1496492 6.66 6.66

(b) Individualsi. Individualshareholdersholdingnominal sharecapital up toRs. 1 Lakh.

17691 9755055 9120975 43.23 43.23

ii. Individualshareholdersholdingnominal sharecapital in excesof Rs. 1 Lakh.

89 3388473 3371573 15.02 15.02

(c) Any Other(specify) 400 938547 934761 4.16 4.16

Sub-Total(B)(2) 18457 15584768 14923801 69.06 69.06

Total PublicShareholding(B)=(B)(1)+(B)(2)

18460 15796989 15135022 70.01 70.01

(C)

Shares heldby Custodiansand againstwhichDepositoryReceipts havebeen issued

0 0 0 0 0

Grand Total(A)+(B)+(C) 18467 22565500 20987533 0 100

221

Yash Papers Ltd.

Quarter ending : March 2009

Shareholding belonging to the category :

"Promoter and Promoter Group"

Sl.

No.Name of the Shareholder

No. of

SharesShares as % of Total No. of Shares

1 Ved Krishna 2,337,240 9.74

2 Sargam Exim Pvt Ltd 3,334,500 13.89

3 Megha Agro Products Ltd 968,640 4.04

4 Yash Krishna 956,865 3.99

5 Manjula Jhunjhunwala 583,366 2.43

6 Shailja Krishna 6,400 0.03

7 K K Jhunjhunwala - HUF 16,000 0.07

Total 8,203,011 34.18

Yash Papers Ltd.

Quarter ending : March 2009

Holding of Depository Receipts (DRs),

where Underlying Shares are in Excess of 1% of the Total No. of Shares

Sl.

No.

Name of the DR

Holder

Type of

Outstanding

DR (ADRs,

GDRs,

SDRs, etc.)

No. of Shares

Underlying

Outstanding DRs

Shares Underlying

Outstanding DRs as a

% of Total No. of

Shares

1 Nil Nil 0 0.00

Total 0 0.00

222

Yash Papers Ltd.

Quarter ending : March 2009

Details of Depository Receipts (DRs)

Sl.

No.

Type of

Outstanding DR

(ADRs, GDRs,

SDRs, etc.)

No. of

Outstanding

DRs

No. of Shares

Underlying

Outstanding DRs

Shares Underlying

Outstanding DRs as

% of Total No. of

Shares

1 Nil 0 0 0.00

Total 0 0 0.00

Yash Papers Ltd.

Quarter ending : March 2009

Shareholding belonging to the category

"Public" and holding more than 1% of the Total No.of Shares

Sl.

No.Name of the Shareholder

No. of

SharesShares as % of Total No. of Shares

1 Sharon Gupta 286,175 1.19

2 Hemant Kumar Gupta 252,943 1.05

3 S Sathya 289,200 1.21

4 Sangeeta S 261,300 1.09

Total 1,089,618 4.54

223

Stock Data: Recent Stock Performance

1 Week 4.7% 13 Weeks -6.0%Current Price

(7/17/2009): 5.15

(Figures in Indian

Rupees)

4 Weeks 10.0% 52 Weeks -30.3%

Yash Papers Limited Key Data:

Ticker: 516030 Country: INDIA

Exchanges: BOM Major Industry: Paper

Sub Industry: Miscellaneous Paper

Currency: Indian Rupees Market Cap: 123,600,000

Fiscal Yr Ends: March Shares Outstanding: 24,000,000

Share Type: Ordinary Closely Held Shares: 6,768,511

RESEARCH AND DEVELOPEMENT

Used in a wide variety of forms, paper and paperboard are characterized by a wide range

of properties. In the thousands of paper varieties available, some properties differ only

slightly and others grossly. The identification and expression of these differences depend

upon the application of standard test methods, generally specified by industry and

engineering associations in the paper making countries of the world.

224

Expenditure on R&D

(Rs. in lacs)

Current Period Previous Year

(i) Capital 0.74 1.03

(ii) Recurring 3.33 1.52

(iii) Total 4.07 2.55

(iv) Total R&D expenditure as a

percentage of total turnover

0.07 0.08

PROPERTIES OF PAPER

Basis Weight (GSM)

Brightness, Whiteness and Colour

Bulk

Dimensional Stability

Folding Endurance (Double Folds)

Formation

Gloss

Machine and Cross Direction

Moisture

Opacity

Porosity

Sizing / Cobb

Smoothness

225

Stiffness

Stretch (Elongation)

Tearing Resistance

Temperature and Humidity: Conditioning of Paper

Thickness

Wax Pick No. (Surface Strength)

Wire side and Felt side

BASIS WEIGHT (GSM)

The weight or substance per unit area is obviously fundamental in paper and paper board

products. The Basis weight of paper is the weight per unit area. This can be expressed as

the weight in grams per square metre (GSM or g/M2), pounds per 1000 sq. ft. or weight

in kgs or pounds per ream (500 sheets) of a specific size. REAM WEIGHT is a common

term to signify the weight of a lot or batch of paper. Control of basis weight is important

as all other properties are affected. Variations in moisture content in paper affects the

grammage.

BRIGHTNESS, WHITENESS AND COLOUR

Brightness is defined as the percentage reflectance of blue light only at a wavelength of

457 nm. Whiteness refers to the extent that paper diffusely reflects light of all wave

lengths throughout the visible spectrum. Whiteness is an appearance term. Colour is an

aesthetic value. Colour may appear different when viewed under a different light source.

Brightness is an arbitrarily defined, but carefully standardised, blue reflectance that is

used throughout the pulp and paper industry for the control of mill processes and in

certain types of research and development programs. Brightness is not whiteness.

However, the brightness values of the pulps and pigments going into the paper provide an

excellent measure of the maximum whiteness that can be achieved with proper tinting.

226

The colour of paper, like of other materials, depends in a complicated way on the

characteristics of the observer and a number of physical factors such as the spectral

energy distribution of the illuminant, the geometry of illuminating and viewing, the

nature and extent of the surround and the optical characteristics of the paper itself.

BULK

Bulk is a term used to indicate volume or thickness in relation to weight. It is the

reciprocal of density (weight per unit volume). It is calculated from caliper and basis

weight. Sheet bulk relates to all other sheet properties. Decrease the bulk or in other

words increase the density, and the sheet gets smoother, glossier, less opaque, darker,

lower in strength etc.

DIMENSIONAL STABILITY

An important consequence of the absorption and de-absorption of moisture by paper is

the change in dimension that usually accompanies changes in moisture content. Such

changes in dimension may seriously affect register in printing processes and interfere

with the use of such items as tabulating cards. Uneven dimensional changes cause

undesirable cockling and curling. Dimensional changes in paper originate in the swelling

and contraction of the individual fibres. It has been observed that cellulosic fibres swell

in diameter from 15 to 20% in passing from the dry condition to the fibre saturation

point. It is impossible to be precise about the degree of this swelling because paper-

making fibres differ considerably in this property, and because the irregular cross-section

of fibres creates difficulty in defining diameter. Change that occurs in the dimensions of

paper with variation in the moisture content is an important consideration in the use of

paper. All papers expand with increased moisture content and contract with decreased

moisture content, but the rate and extent of changes vary with different papers.

227

FOLDING ENDURANCE (DOUBLE FOLDS)

Folding endurance is the paper's capability of withstanding multiple folds before it

breaks. It is defined as the number of double folds that a strip of 15 mm wide and 100

mm length can withstand under a specified load before it breaks. It is important for

printing grades where the paper is subjected to multiple folds like in books, maps, or

pamphlets. Fold test is also important for carton, box boards, ammonia print paper, and

cover paper etc. Folding endurance is a requirement in Bond, Ledger, Currency, Map,

Blue Print and Record Papers.

FORMATION

Formation is an indicator of how the fibres and fillers are distributed in the sheet.

Formation plays an important role as most of the paper properties depend on it. Paper that

is poorly formed will have weak, thin spots and thick spots. These will affect properties

like caliper, opacity, strength etc. Paper formation also affects the coating capabilities and

printing characteristics of the paper.

GLOSS

It is the specularly and diffusely reflected light component measurement against a known

standard. Gloss is important for printing such things as magazine advertisements. The

level of gloss desired is very dependent on the end use of the paper. Gloss and

smoothness are different properties and are not dependent on each other.

MACHINE AND CROSS DIRECTION

Paper has a definite grain direction due to greater orientation of fibres in the direction of

travel of the paper machine. This grain direction is known as machine direction. The

cross direction is the direction of paper at right angles to the machine direction. Some of

228

the properties vary with the MD and CD and hence the values are reported in both the

directions. While sheeting the paper, machine and cross direction are to be kept in mind

and the sheet cutting to be done to suit the end use requirements. Examples: 1. All

printing papers are to be cut in long grain (The biggest dimension in the grain direction).

2. Book papers fold better and the book stays open better if the sheets are out so that the

machine direction runs up and down the pages. 3. Wrap around labels for metal cans and

bottles are to be cut with the machine direction vertical to obtain greater flexibility about

the can. Long grain and Short grain : The sheet is in long grain if the larger dimension is

parallel to grain (MD) direction. The sheet is said to be in short grain if the larger

dimension is parallel to cross direction (CD).

MOISTURE

Most physical properties of paper undergo change as a result of variations in moisture

content. Water has the effect of plasticising the cellulose fibre and of relaxing and

weakening the interfibre bonding. The electrical resistance and the dielectric constant of

paper both vary with moisture content. The absorption and reflectance of certain bands of

infrared and microwave radiation by paper are affected by its moisture content. The

amount of water present in a sheet of paper is usually expressed as a percent. The amount

of water plays an important role in calendaring, printing and converting process. Moisture

control is also significant to the economic aspect of paper making. Poor moisture control

can adversely affect many paper properties.

OPACITY

Opacity is the measure of how much light is kept away from passing through a sheet. A

perfectly opaque paper is the one that is absolutely impervious to the passage of all

visible light. It is the ratio of diffused reflectance and the reflectance of single sheet

backed by a black body. Opacity is important in Printing Papers, Book Papers, etc.

229

POROSITY

Because paper is composed of a randomly felted layer of fibre, it follows that the

structure has a varying degree of porosity. Thus, the ability of fluids, both liquid and

gaseous, to penetrate the structure of paper becomes a property that is both highly

significant to the use of paper. Paper is a highly porous material and contains as such as

70% air. Porosity is a highly critical factor in Printing Papers Laminating Paper, Filter

Paper, Cigarette Paper. Bag Paper, Antitarnish Paper and Label Paper. Porosity is the

measurement of the total connecting air voids, both vertical and horizontal, that exists in

a sheet. Porosity of sheet is an indication of absorptivity or the ability of the sheets to

accept ink or water. Porosity can also be a factor in a vacuum feeding operation on a

printing press.

SIZING / COBB

Because paper is composed of a randomly felted layer of fibre, it's structure has a varying

degree of porosity. Thus, the ability of fluids, both liquid and gaseous, to penetrate the

structure of paper becomes a property that is both highly significant to the use of paper.

The need to limit the spreading of ink resulted in "sizing" the paper with gelatinous

vegetable materials which had the effect of sealing or filling the surface pores. Later, the

term "sizing" was applied to the treatment of paper stock prior to the formation of the

sheet, with water-repellent materials such as rosin or wax. Resistance towards the

penetration of aqueous solution / water is measured by Sizing or Cobb values.

SMOOTHNESS

Smoothness is concerned with the surface contour of paper. It is the flatness of the

surface under testing conditions which considers roughness, liveliness, and

compressibility. In most of the uses of paper, the character of the surface is of great

importance. It is common to say that paper has a "smooth" or a "rough" texture. The

terms "finish" and "pattern" are frequently used in describing the contour or appearance

230

of paper surfaces. Smoothness in important for writing, where it affects the ease of travel

of the pen over the paper surface. Finish is important in bag paper as it is related to the

tendency of the bag to slide when stacked. Smoothness of the paper will often determine

whether or not it can be successfully printed. Smoothness also gives eye appeal as a

rough paper is unattractive.

STIFFNESS

Stiffness is the measure of force required to bend a paper through a specified angle.

Stiffness is an important property for box boards, corrugating medium and to certain

extent for printing papers also. A limpy and flimsy paper can cause feeding and delivery

problems in larger sheet presses. A sheet that is too stiff will cause problems in copier

machines where it must traverse over, under, and around feed rollers. Bond papers also

require certain stiffness to be flat in typewriters etc.

STRETCH (ELONGATION)

Stretch is the amount of distortion which paper undergoes under tensile stress.

Stretchlelongation is usually expressed, as percent stretch to rupture. Stretch can be

related to the paper's ability to conform and maintain conformance to a particular contour,

e.g. Copier paper, multicolor offset printing papers, liquids packing cartons base papers

etc. It is an important property in sack kraft papers which are used for cement bags etc.

Stretch is higher in cross direction than machine direction.

TEARING RESISTANCE

Tearing resistance indicates the behaviour of paper in various end use situations; such as

evaluating web runnability, controlling the quality of newsprint and characterising the

toughness of packaging papers where the ability to absorb shocks is essential. fibre length

and interfibre bonding are both important factors in tearing strength. The fact that longer

fibres improve tear strength is well recognised. The explanation is straight forward;

231

longer fibres tend to distribute the stress over a greater area, over more fibres and more

bonds, while short fibres allow the stress to be concentrated in a smaller area.

TEMPERATURE AND HUMIDITY: CONDITIONING OF PAPER

Conditioning of paper is also of importance in many printing and converting operations.

In addition to the effect of moisture content on physical properties, it also determines the

build up of static of the paper sheet subjected to pressure and to friction. The tendency for

paper to develop static becomes greater with increasing dryness. Cellulosic fibres are

hygroscopic i.e. they are capable of absorbing water from the surrounding atmosphere.

The amount of absorbed water depends on the humidity and the temperature of the air in

contact with the paper. Hence, changes in temperature and humidity, even slight changes,

can often affect the test results. So, it is necessary to maintain standard conditions of

humidity and temperature for conditioning.

THICKNESS

Thickness or Caliper of paper is measured with a micrometer as the perpendicular

distance between two circular, plane, parallel surfaces under a pressure of 1 kg./ CM2 .

Caliper is a critical measurement of uniformity. Variations in caliper, can affect several

basic properties including strength, optical and roll quality. Thickness is important in

filling cards, printing papers, condenser paper, saturating papers etc.

WAX PICK NO. (SURFACE STRENGTH)

This indicates the surface strength of the paper. This test is important for all uncoated

printing papers.

232

WIRE SIDE AND FELT SIDE

Also referred as wire side and top side. The side which is in contact with the paper

machine wire during paper manufacture is called the wire side. The other side is top side.

Certain properties differ between wire and felt side and it is customary to measure these

properties on both the sides. In case of paper to be printed on one side only, best results

are obtained by printing on felt side. Postage stamps are printed on wire side and then

gummed on felt side, where the smoothness is helpful for attaining an even application.

PAPER TESTS

Important Parameters for Paper & Paperboard

Physical Properties

o Grammage

o Moisture Content

o Surface Strength (Wax Pick)

o Thickness (Calliper)

o Water Absorption (COBB)

o Water Absorption (WICK)

Strength Properties

o Bending Resistance (L&W)

o Bursting Strength

o Compressibility

o Elongation

o Hardness

o Ply Bond/ Scott Bond

o Resiliency

233

o Stiffness (Taber)

o Tearing Resistance

o Tensile Strength

Optical Properties

o Brightness

o Colour

o Gloss

o Opacity

o Whiteness

Printing Properties

o Printability

o Print Quality

IMPORTANT PARAMETERS FOR PAPER & PAPERBOARD

All tests are carried out at 23°C + 1°C and 50 + 2% relative humidity which is a TAPPI

standard.

GRAMMAGE

Weight per unit area expressed in g/m2. The standard procedure is laid out in ISO 536,

Tappi T 410.

MOISTURE CONTENT

The absolute moisture content, expressed as a % of the paper/paperboard weight. The

sample is generally not conditioned while doing this test. The standard procedures are

laid out in Tappi T 412 and ISO 287.

234

SURFACE STRENGTH (WAX PICK)

A measure of the surface strength of the sample or surface resistance to picking. Pick

occurs due to poor internal bonding strength, making it susceptible to adherance to grade

wax sticks (Dennison). This test is valid only for uncoated board or paper. For Coated

stock IGT pick test is applicable.

THICKNESS (CALLIPER)

The perpendicular distance between the two surface of the board / paper, expressed in

mm or µm, measured with a micrometer.

WATER ABSORPTION (COBB)

The surface water absorption over 60 seconds, expressed in g/m2, measured by Cobb

Test. The procedural Standards are explained in Tappi T 441.

WATER ABSORPTION (WICK)

Water absorption at the edge, expressed in kg/m2, using Wick Test. Board surface is

sealed with waterproof tape on both sides, weighed, placed in water @ 80°F for 20

minutes and weighed again to measure the water absorbed by wicking. It is an important

test for measuring the water absorption capacity of cupstock grade, which is used for the

manufacture of soft drink cups.

BENDING RESISTANCE/ STIFFNESS

It is a measure of the resistance offered to a bending force by a rectangular sample,

expressed in mN (milli newtons).

235

The instruments used are:

(i) Taber Stiffness tester

(ii) L & W tester

The standards are as per Tappi T 556.

BURSTING STRENGTH

The maximum hydrostatic pressure required to rupture the sample by constantly

increasing the pressure applied through a rubber diaphragm on 1.20 - inch diameter

sample. The standards are as per Tappi T 403

COMPRESSIBILITY

The reduction in thickness under compressive forces or pressure. It influences the ability

of paper to change its surface contour and to conform to and make contact with the

printing plate or blanket during printing impression. This is highly relevant in gravure

and letterpress printing. Compressibility is measured as a ratio of roughness under to

different standard pressures in a Parker Print Surf tester

ELONGATION

The tensile strain developed in a test sample at maximum tensile strength before rupture,

measure as the % increase in the length of the sample to the original length.

HARDNESS

The degree to which paper will resist indentation by some other material such as a stylus,

pen or printing plate. Hardness is measured with the help of bendtsen smoothness tester

with load on the measuring head.

236

PLY BOND/ SCOTT BOND

The interlayer strength of the paperboard, measured on Scott Bond Tester, expressed in

J/m2. The standard procedures are explained in Tappi T 403. In paper, it is a measure of

the internal strength of the sheet.

RESILIENCY

The ability of paper to recover its original thickness and surface contour after release of

the compressive forces of printing nips.

STIFFNESS (TABER)

A measure of flexural rigidity, Stiffness is the bending moment (g-cm or mNm) required

to deflect the free and of a 1.5 in wide vertically clamped sample 15° from its center line

when load is applied 50 mm away from the clamp; measured in MD & CD. The

procedural standards are explained in Tappi T 489 and ISO 2491.

TEARING RESISTANCE

Tearing resistance/ strengths is the ability of the paper to withstand any tearing force

when it is subjected to. It is measure in both MD & CD, expressed in mN (millinewtons).

The procedural standards are explained in Tappi T 414.

TENSILE STRENGTH

The tensile force required to produce a rupture in a strip of paperboard, measured in MD

& CD, expressed in kN/m. The procedural standards are explained in Tappi T 404.

237

BRIGHTNESS

It is the percentage of blue light reflected of a sample measured at an effective

wavelength of 457nm. Measured with to different standards - Tappi/GE and ISO. Though

there is no direct correlation, ISO brightness of a sample is usually lower by 1-1.5 units

over GE brightness. The standards are as per Tappi T 452.

COLOUR

Related to perception and therefore measured or specified in terms of colour space. A

commonly used system is the CIE L,a,b system. This is based on the idea of colour

opposites.

L - measure of illuminance and varies from 100 for perfect white to 0 for perfect black.

a - redness to greenness.

b - yellowness to blueness.

GLOSS

It is the specular reflection of light, which is reflected at an equal and opposite angle.

Normally measured at 75° or 20°. Generally, gloss of unprinted sheet/ board is measured

at 75° (except for cast coated papers). Printed and varnished surfaces are measured at 60°

angle. The standard procedures are laid out in Tappi T 480.

OPACITY

The property of a substrate to resist passage of light. It is measured as the percentage of

light absorbed by a sheet of paper. Important in book printing where both sides of paper

are printed. The procedural standards are explained in ISO 2471.

238

WHITENESS

The extent that paper diffusely reflects light of all wavelengths throughout the visible

spectrum i.e the magnitude & uniformity of spectral reflectance measured as the percent

light reflectance for the whole wavelength range. The procedural standards are explained

in ISO 11475.

PRINTABILITY

The extent to which properties of paper lends them to the true reproduction of the original

artwork. This is influenced by the printing process and can be evaluated in terms of - dot

reproduction, dot gain, print gloss, hue shift and print uniformity.

PRINT QUALITY

The degree to which the appearance and other properties of a print approach a desired

result. Lot of parameters in paper surface like roughness, gloss, ink absorption,

whiteness, brightness affect this.

SUBSTANCE AND QUANTITY MEASUREMENT

Weight or substance per unit area, called basis weight, is a fundamental property of paper

and paperboard products. From the first uses of paper in the printing trades, it has been

measured in reams, originally 480 sheets (20 quires) but now more commonly 500 sheets

(long reams). The term ream weight commonly signifies the weight of a lot or batch of

paper. Since the printing trades use a variety of sheet sizes, there can be numerous ream

weights for paper having the same basis weight.

To determine basis weight, the sample is brought to equilibrium under standard

conditions (24º C or 75º F; 50 percent relative humidity). The paper specimens must

consist of at least 10 sheets with a total area of not less than about 600 square centimeters

239

(100 square inches). Since the properties of paper change with moisture content, all tests

are conducted under standard conditions.

The caliper (thickness) of paper or paperboard in fractions of a millimeter or inch is

measured by placing a single sheet under a steady pressure of 0.49 to 0.63 kilogram per

square centimeter (seven to nine pounds per square inch) between two circular and

parallel plane surfaces, the smaller of which has an area of 1.6 square centimeters (0.25

square inch).

The density or specific gravity of paper is calculated from the basis weight and caliper

and may vary over wide limits. Glassine, for example, may be 1.4 grams per cubic

centimeter and creped wadding, used for packaging breakables, only 0.1 gram per cubic

centimeter. Most common papers are in the range of 0.5 to 0.7 gram per cubic centimeter.

Consumption per unit of production of paper

UOM Current Period Previous YarElectricity Units 879.22 1084

Furnace oil Litre Nil Nil

Coal MT Nil Nil

Paddy husk MT 1.50 1.50

Bagasse pith MT 3.00 3.00

240

Power and fuel consumption

Current Period Previous Year

(a) Electricity

(i) Purchased unit (lacs) Nil NilTotal amount (Rs.in lacs) Nil NilRate/unit (Rs.) Nil Nil(ii) Own generationThrough diesel generatorUnit (lacs) 3.53 1.32Unit per litre of diesel oil 3.35 3.65Cost/unit (Rs.) 8.35 7.97Through steam turbineUnit (lacs) 215.65 173.82Unit per MT of fuel (paddy husk) 8.43 906Cost/unit (Rs.) 2.01 1.11(b) Coal quantity (MT) Nil Nil

(c) Furnace oil quantity (kilo litre) Nil Nil

(d) Others

(i) Paddy husk quantity (MT) 58531.00 41065.00Total cost (Rs.in lacs) 991.28 412.75Average rate (Rs.) 1694.00 1005.00(ii) Bagasse/ pith quantity (MT) 8911.00 4703.00Total cost (Rs.in lacs) 52.41 19.99Average rate (Rs.) 588.00 425.00

241

Technology absorption

(A) Specific areas in which R&D carried out by the Company

R&D centre is doing research in non-wood fibers under guidance of consultants.

(B) Benefits derived as a result of the above R&D

Enhancement in quality and reduction in cost.

(C) Future plan of action

To strengthen and continue improvement in quality through improvement of process

control systems to reduce process time & wastage. To develop new grades of paper.

(D) Expenditure on R&D (Rs. in lacs)

Current Period Previous Year

(i) Capital0.74 1.03

(ii) Recurring3.33 1.52

(iii) Total4.07 2.55

(iv) Total R&D expenditure as apercentage of total turnover 0.07 0.08

242

Balance SheetAmount in Rupees

As at 31st March, 2008 Schedule Current Period ended31.03.2008

Previous Yearended31.12.2006

1-03-2008 ended 31-12-2006I. SOURCES OF FUNDS

1. Shareholders' Fundsa. Capital 1 225655000 206655000b. Preferential WarrantMoney

2310000

c. Reserves and Surplus 2 140863286 368828286 1717502042. Loan Funds

a. Secured Loans 3 887788388 601269841b. Unsecured Loans 4 22226545 910014933 20886800

3. Deferred Tax Liability 18596000 41026000Total 1297439219 1041587845II. APPLICATION OFFUNDS1. Fixed Assets 5a. Gross Block 1335217184 324703718b. Less: Depreciation 199167471 148852811c. Net Block 1136049713 175850907d. Capital Work in Progress 7114524 1143164237 738417985

9142688922. Investments 6 5935 59353. Current Assets, Loans and

Advancesa. Inventories 7 154923799 54488859

b. Sundry Debtors 8 49021518 23210085c. Cash and Bank Balances 9 8136354 60329646

d. Loans and Advances 10 78037205 67536125Total’A’ 290118876 205564715

Less: Current Liabilities andProvisionsa. Liabilities 11 135819091 77576263

b. Provisions 12 30738 675434Total 'B' 135849829 78251697Net Current Assets (A-B) 154269047 127313018

Total 1297439219 1041587845Significant AccountingPolicies and Notes onAccounts

17

243

Profit and Loss Account ( Amount in Rupees)

Foe the year ended 31st

March,2008Schedule Current Period ended

31.03.2008Previous Year

ended31.12.2006

1. INCOMEa. Sales 564935367 341291781Less: Excise Duty 50811217 514124150 31969966

309321815b. Other Income 13 29509763 3619750

c. Increase/(Decrease) in Stocks 14 26008480 (3590205Total 'A' 569642393 309351360

2. EXPENDITUREa. Raw Material Consumed 15 144499587 85834382

b. Manufacturing,Administrative, Selling andDistribution Expenses

16 424175028 189555895

c. Depreciation on Fixed Assets 54870552 16030892Total 'B' 623545167 2914211693. Profit Before Tax (A-B) (53902774) 17930191Provision for TaxationCurrent Tax (including FBT) 950000 5690000Deferred Tax (22430000) 12312924. Profit After Tax (32422774) 11008899Income Tax relating to earlieryear Credit/(Debit)

(364144) -

Balance of Profit (32786918) 11008899Balance brought forward fromPrevious Year

36675176 30666277

5. Profit Available ForAppropriation

3888258 41675176

AppropriationsTransfer to General Reserve - 5000000Balance carried to BalanceSheet

3888258 36675176

6. EARNING PER SHARE(EPS)Net Profit (A) (32422774) 11008899Weighted average no. of equityshares (B)

21486114 20665500

Basic and Diluted Earning pershare (A/B) (Nominal value ofRs. 10 per share)

(1.51) 0.53

244

Schedules forming part of the annual accountsAmount in Rupees

As at 31st March Current Period ended31.03.2008

Previous yearended 31.12.2006

Schedule 1 SHARE CAPITAL

Authorised

2,60,00,000 Equity Shares of Rs. 10/- each 260,000,000 260,000,000

4,00,000 Preference Shares of Rs.100/- each 40000000 40000000

Total 300,000,000 300,000,000

Issued, Subscribed and Paid up

2,25,65,500 (2,06,65,500) Equity Shares of Rs.10/- each fully paid up

225,655,000 206,655,000

Of the above

5,68,000 Equity Shares have been allotted as fullypaid up Bonus Shares by capitalisation of reserves

Total 225,655,000 225,655,000

Significant Accounting Policiesand Notes on Accounts

245

Schedule 22 RESERVES AND SURPLUS

A. Capital Reserve

Balance as per last Account 6087500 6087500

B. Securities Premium 73987528

Balance as per last Account 73987528 76487528

Add: Received during the year 1900000 -

75887528 76487528

Less: Share Issue Expenses 75887528 2500000

C. General Reserve 55000000

Balance as per last Account 55000000 55000000 50000000

Add: Transferred from Profit and Loss Account 55000000 5000000

D. Profit And Loss Account

As per Account annexed 3888258 36675176

Total 140863286 171750204

246

Schedules forming part of the accounts

Amount in Rupees

As at 31st March Current Period ended31.03.2008

Previous year ended31.12.2006

Schedule 33 SECURED LOANS

A. Term Loans

From Banks

a) United Bank of India 268797339 200000000

b) Oriental Bank of Commerce 201547986 149750588

c) Union Bank of India 157218066 116764818

d) UCO Bank 134056032 100085969

From Financial Institutions

e) Industrial Development Bank of IndiaLtd.

- 6000000

B. Working Capital Loans

a) State Bank of Indiab)

126168965 23163728

b) Canara Bank - 5504738

Total 887788388 601269841

247

Amount in Rupees

Amount in Rupees

As at 31st March Current Periodended 31.03.2008

Previous yearended 31.12.2006

Schedule 4 UNSECURED LOANS

A. Fixed Deposits [Repayable within one yearRs. 37,44,343/- (Rs. 74,19,378/-)]

18726545 17686800

B. Other Loans

From a Company - 3200000

From a Director 3500000 -

Total 22226545 20886800

As at 31st March Current Periodended 31.03.2008

Previous yearended 31.12.2006

Schedule 53 INVESTMENT (Non trade) - Quoted

Long Term Investments

Pudumjee Pulp & Paper Mills Ltd.100 Equity Shares of Rs.10/- each fully paid up

4400 4400

Rana Mohindra Papers Ltd.100 Equity Shares of Rs.10/- each fully paid up

380 380

Mukerian Papers Ltd.100 Equity Shares of Rs.10/- each fully paid up

600 600

Rama Newsprint & Papers Ltd.100 Equity Shares of Rs.10/- each fully paid up

555 555

Total 5935 5935

Total cost of quoted investments 5935 5935

Aggregate Market value of quoted investments 11387 15920

248

Schedule 63 INVENTORIES

A. Stores and Spares (at cost) 67739767 29124381

B. Loose Tools (at cost) 711575 196511

C. Finished Goods (At lower of cost or netrealisable value)

30014319 5547755

D. Raw Material (at cost) 53289784 18472684

E. Work in Process (at estimated cost) 2069375 527459

F. Scrap (At estimated realisable value) 1000000 400000

G. Import Entitlements/licence (DEPB) (Atestimated realisable value)

98979 220069

Total 154923799 54488859

As at 31st March Current Period ended31.03.2008

Previous year ended31.12.2006

Schedule 73 SUNDRY DEBTORS

Unsecured - considered good)

Over six months 686971.00 2698319

Other debts 48334547.00 20511766

Total 49021518.00 23210085

249

Schedule 83 CASH AND BANK BALANCES

A. Cash Balances 1679521

i. Cash in hand 2580655 1673026

ii. Stamps/Cheque in hand 36027 2616682 6495

B. Balance With Scheduled Bank on 58650125

i. Current Accounts 1062961 42943032

ii. Fixed Deposit Accounts 3,088,043 14271568

iii. Unpaid Dividend Accounts 1107820[Including amount kept in FixedDeposit account Rs. 1,49,545/-(Rs. 1,65,169/-)]

1050609

iv. Share Application Money 260848Refund Account

5519672 384916

Total 8136354 60329646

250

As at 31st March Current Periodended 31.03.2008

Previous yearended 31.12.2006

Schedule 93 LOANS AND ADVANCES

(Unsecured - considered good)

A. Advances recoverable in cash or in kind or for value tobe received

65482174

75936447

B. Security Deposits 117623 1287810

C. Advance Income Tax less provisions 766141

Advance Tax 13638135 19656141

Less: Provision for tax 11655000 1983135 18890000

Total 78037205 67536125

251

CHAPTER 8

BUSINESS STRATEGY

COMPANY POLICYWe at Yash Paper are committed to strengthen our position as market leader in

manufacturing of writing and printing paper and rayon grade pulp by developing a

company wide culture that promotes :

Customer delight

Quality, Environment, Safety and Information Security initiatives

Environment friendly, Safe and Energy efficient operation

Protecting Information of all Stakeholders

We will continuously pursue for :

Continual improvement in our products, processes & services in all areas.

Protecting information assets and customer information from all threats through

the implementation of suitable information security management systems.

Remain incompliance with applicable legislations.

Communicate and reinforce this policy through out the company.

This policy is made available to employees and on request to interested parties.

MARKETING POLICIES

CUSTOMER-DRIVEN

Our customers needs drive our business. We continuously seek to understand these

needs better, adapt our research, offer innovative products and emerge as integral to their

existence. At Yash Papers, this approach is driven by process discipline, robust

methodology, passionate customer service ,mindset flexibility, timely delivery and cost

effectiveness. Because the objective is not only to meet client expectations, but also to

252

exceed them. Because the focus is not the one-time transaction, but the ongoing

relationship.

PEOPLE-CENTRIC

Even as we made the most significant tangible investment in our production assets in

2007-08, we continued to make intangible business-critical investments in our people.

Through continuous training ,alignment with the best practices, knowledge sharing. With

the objective to create an invigorating workplace. Where people possess the freedom to

develop. Where people are empowered to achieve. Where people are encouraged to

excel.

INNOVATIVE

We recognise that customer interests can be consistently served only through a

continuous investment in process and product innovation. To make this a reality, we

invested in cutting-edge technology. Resulting in superior service of client needs,

evolving markets and consumer expectations.

A COMBINATION OF GLOBAL EXPERTISE AND LOCAL

KNOWLEDGE

We learn from everything we see. We learn from local business environments and

practices. We learn from the tightening standards of governance. We learn from

passionate, customer-driven companies. We learn from rising customer expectations. We

learn from local, regional and international trends.

ESSENTIALLY PROFITABILITY-ORIENTED

We recognise that we are in business to enhance value. This needs to be reflected in

excellent financials and market capitalisation. This superior profitability is derived from a

253

differentiated strategic direction and a number of differentiated decisions in everyday

working. We review and refine these decisions continually. We do so to provide investors

with a fair return on the financial resources entrusted to us.

EXPANSION PLAN

The company plans to embark on further growth in specialty grades of paper once it

consolidates its recent expansions.

The project team is currently exploring the following.:

Converting old bagasse line for bamboo pulping.

Searching paper machine to produce grease proof and parchment grades.

Searching for locations with raw material availability.

SALES NETWORK

Yash Papers is located proximately to its customers in the fast-growing states of North

India comprising Haryana, Punjab and Delhi, among others. Nearly 40 per cent of the

total output is sold in North India

The products are marketed through a pan-Indian network of 35 dealers. We also export to

the markets of Australia, Bangladesh, Sri Lanka, Egypt, Saudi Arabia, Iran, Ghana,

Lebanon, UAE, South Africa and Ecuador. We derive nearly 15 per cent of our revenues

from exports.

254

SALES NETWORK PARTNERS

OUR DEALER LIST

STD Off Phone Res Ph. Fax. No. Mobile No. Prop. Firm Address/E-mail

Ahmedabad

079 32917880,

32917947

25733688 "9377732830

9327004958

9824167594"

"Mahendra

Gupta Sunil

Goyal

Purnesh

Shah"

Fakirsons

Papchem Pvt

Ltd.

207,Vraj

Avenue, above

US Pizza

restaurent,

Swastik Char

Rasta,

Navrangpura

Allahabad

0532 2400479,

2400401

2405844 - 9415253911 Manish

Agarwal

Saraswati Paper

House.

46-

B,Chahchand,

Zero Road

Bangalore

080 25286805,

25215289

25286805

25215289

25214984 9845019766 Amit Jajodia. Amit Papers 423, Krishna

9th Main, 1st

Croos,

H.A.L.2nd

Stage Indira

Nagar.

Chennai

044 28471644 24959644 28471644

Me -

FDA81

9841192514 Sayeed Amit Papers 6/1, Petho

Street, Near P&

T Quarters,

255

Royapettah

Bareilly

0581 2578470 2540174 -- 9837038177 Dilip

Khandelwal

Lucky Traders Shop No. 05-06,

Ganpati Market,

Near Nandan

Musical, Bara

Bazar

Bhagalpur

0641 2421861,

2402897

"2422169

2402658"

2402658 "9334165268

9334233872"

"Ram Gopal,

Pawan

Agarwal"

Madhu Paper

Industries

D.N. Singh

Road,

Bhagalpur

Cuttack

0671 2619889,

2618539

2619518

2619360

2620127 Prakash

Babu.

Rameswar Lal

Shyam Sunder

Banka Bazar.

Delhi

011 23916652,

23963862

22301849 22844764 9871042393

9818202890

Shiv Kumar

Pradeep

Bansal

Bansal Trading

Company.

4034/ 5,

Haryana Paper

Market, Chawri

Bazar.

Faizabad

05278 221087 9415183054 Anil Rastogi Natraj Paper

Ag.

Kotha Parcha,

Chowk

Firozabad

05612 9837043235

9412265894

9219406954,

9219938968

Shyam

Gupta.

Shri Ram

Traders

Mr. Shyam

Gupta, 38

Gunjan Enclave,

256

Near Shiv

Mandir,

Mathura Nagar

Gorakhpur

0551 2293248 2337897 9415314081 Kamal

Masheshwari.

K.K.Trading

Company.

Khoonipur

Guwahati

0361 2544180,

2546314

2547641 D.K.Singh.

P.R.Mundhra

Shankar

Trading

Company

Seotia Market,

S.R.C.B. Road

Guwahati-781

001

Hyderabad

040 24611122,

24611133

"23298633

23298634 "

24741144 "9848015001

9347011144

9347011144"

"Monoj

Malpani.

Pawan

Sushiljii"

Sri Sant Kripa

Paper Pvt. Ltd.

15-09-238

/A,1st Floor,

Gowliguda

Indore

0731 2430680 2349392 2433491 9826389392 Pradeep

Pushpendra

Dhan

Quality Paper

Mart.

361(Old 284)

Jawahar Marg.

Jabalpur

0761 2623416,

5005899

2450858

5012052

5005899 9826122978 Pradeep

Biyani.

Allied

Agencies.

54, Methodist

Centre, Napier

Town

Jaipur

0141 2317062 2306370 565905 9314505340 Dwarika Motilal Dhamani Street,

257

2322747 2306912 9829067062 Prasad

Ashish Goyal

Nathmal &

Sons.

S.M.S.Highway.

Jalandhar

0181 2457996,

5007403

2293370 258858.P.P 9814079867 Om Prakash

Sharma.

Rama Krishna

Papers Agency.

Khanna

Market,Chowk,

Adda Tanda.

Jammu

0191 2573584 2461572 Vinod Gupta. Jay Kay Paper

Co.

Rajinder Bazar.

Jaysinghpur

02322 225473,

225683

225736

225473

0233-

2623373

9422581273 Sampat Bhai. Harikishan

B.Biyani.(Regd)

58/B, Aruna

Road, 3rd Lane,

Jaysingpur

(Distt.

Kolhapur)

Jhansi

0517 2452796 2320538 9415194265 Dinesh

Agarwal

Bhavna

Products

41, Jawahar

Chowk

Kanpur

0512 2361570 2361570 2311627 9415050804 Sanjeev

Maheshwari.

Maheswari

Papers House.

32/7,Chawal

Mandi, Chowk.

Kolkata

033 22597321,

22597429

24763816 22597397 9830012701 Saurabh Jalan B.D. Packaging

and Allied

Industries

Pvt.Ltd

12/2, Sovaram

Bysack Street,

Ist Floor

258

Lucknow

0522 2625542,

2620887

2626887 9335813879 Sanjay

Kabra. d

Abha

Enterprises

177/62, Pul

Jhaulal,

Gwynne Road,

Aminaba

Ludhiana

0161 3919006,

4615369,

2708314

2442520

2448671

2708606

2708314

9815000369

1612076085

Varun

Khemka

Anand

Khemka

Maman Chand

Syam Sunder

Lal Bazar

Kharadian

Mathura

0565 2520393 2520250

2520326

2403978 9412281212

9837293089

Pankaj Mittal

Ashok Mittal

S.S.Mittal &

Sons.

18, Shri Jamuna

Dham

Moradabad

0591 2494813 2490016

2496176

9837026401

9837064012

9359712895

Amit

Agarwal

Abhishek

K. K.

Agarwal

Amit Paper

Products.

H-53, Lajpat

Nagar.

Mumbai

022 28690327 28670204 022-

28690327

9820130489

9820184167

Jugal Kishor.

Raj Kumawat

Jyoti Papers. 13/1035, 4th

Floor, Old

M.H.B.Colony,

Gorai Road,

Borivli (W),

Mumbai

259

Mumbai

022 22065824,

22091964

9820557576 22091964 9881223303 Shrivardhan

Mohta

Abhijeet

Shah

Jainarain

Marketing Pvt

Ltd. "

"Kalyan

Bhawan, 2nd

Floor,

354, Kalkadevi

Road, Mumbai.

Mumbai

022 23441646,

23455020

25062351

25060790

9869340897 Ramnik Bhai

Devang

M/s Shriji Paper

Mart

T-10, Nutan

Sandesh, C-

Wing, Plot

19/20, V.B.E.L.,

Ghatkopar (E)

Nagpur

0712 5613472,

2584322

2545905

2550431

2584322 9822239590 Rajeev

Shukul

A.V.Marketing 3rd ,Mezanine

Floor, N.M.C.

Complex,

Mangalwari,

Sadar

Patna

0612 2672028,

2027392,

3957023

2671632 2670754 3114293 Budhmal Ji. New Bihar

Dealers

Naya Tola.

Pune

020 24472276,

24477079

26456610 24475224 9822032996 Tarak M.

Parikh

Jupiter Paper

Mart

387, Raviwar

Peth, Shroff

Bazar, Pune -

411002

260

Raipur

0771 2535947, 2234183

2535030

9827158686 Bal Krishna

Dani.

Muktesh Paper

Agencies.

R.S.Shukla

Road, Gole

Bazar.

Ranchi

0651 2201060,

2203038

2203279

2200166

9431101261 Arjun Jalan. Hiralal

Bhagwati

Prasad.

Upper Bazar.

Saharanpur

0132 2644159,

2660141

2711745

2727971

725556 9837492625

3107984

9412232562

Vijay

Chanana

Ajay

Chanana

Chanana Papers Pansari Bazar,

Purana Lalta

Bazar.

Varanasi

0542 2353166 "2413166

3091770"

353166 9415224260 K.K.Kabra

Achuyat

Kabra

Vedant Traders 16 Nagar

Mahapalika

Katra, Nichi

Bagh

261

SOCIAL COMMITMENT

At Yash Papers, we are responsible through our actions and intent to stakeholders at

various levels to employees, their families, the government, investors and society at large.

At the Company, this commitment is reflected in the following ways:

EMPLOYEES

We help build careers through long-term growth, ongoing training, appraisal

transparency, delegation and a no-bureaucracy management structure. We also

provide accommodation to workers and officers with recreational facilities.

GOVERNMENT

We paid Rs. 5.7 mn current tax and Rs.31.9 mn as excise duty.

INVESTORS

We have invested significantly in an expansion that will translate into enhanced

shareholder value across the foreseeable future.

COMMUNITY

We run two schools in the plant vicinity – Yash Technical Institute and Yash Vidya

Mandir (under the aegis of Jingle Bell Nursery School Society), which impart

education to 350 students from nursery to Class X. We also have two schools in

Faizabad City. As part of our community responsibility, we reinforced rural

infrastructure – roads, wells, lighting arrangements and medical camps.

262

We are now initiating large-scale plantation programmes to promote farm forestry, which

would result in a win-win situation for future pulp needs of the Company and income for

the local farmers.

INVESTORSYash Papers is a profit making Company. Yash Company has achieved a production of

24,929 MT and sales of 23,928 MT during the period ended 31st March 2008 against a

production of 16,158 MT and sales of 16,368 MT in the previous year ended 31st

December 2006. The Company achieved a gross turnover of Rs.5649.35 lacs in the

current period against Rs. 3412.92 lacs in the previous year. The figures for the current

period are for 15 months and therefore are not comparable with the figures of the

previous year. Reserves as on 31st March, 2008 stood at Rs.1408.63 lacs, compared to

Rs. 1717.50 lacs of the preceding year. We reported a turnover of Rs 258.4 million in

2004-05 and Rs 274.9 million in 2005-06. Our net worth grew from Rs 102.9 mn to Rs

369.9 mn while capital employed by the Company strengthened from Rs 247.6 mn to Rs

494.0 mn across this period.

R & D INITIATIVS

At Yash Papers, the objective is to manufacture specialized paper varieties and grades

customised around diverse buyer requirements. Since this requires varied manufacture,

we have invested attractively in product research and development through the following

initiatives:

We employ an efficient research team comprising professionals with adequate

qualifications and experience.

We possess a well-equipped laboratory capable of developing various paper

grades in-house.

263

The lab-scale plant is complemented with adequate equipment (digester, beater,

disc refiner, sheet pressing machine and sheet-making machine among others)

We focus not only on the development of newer paper grades based on their

required properties but also assists quality control through a regular analysis of

production samples.

Over the recent years, the key R&D achievements have comprised:

Development of new grades

Improvement in properties existing grades

Process optimization

Development of pulping systems with new libero

Reduction in water consumption

264

CHAPTER 9

JOB PROFILE/ ASSIGNMENT PROFILE

WORK ASSIGN

PAPER BAG MANUFACTURE OF NORTH INDIA

( How much beneficial for Yash Paper Limited )

Now a days paper bag’s are used in our daily life. Paper bags have always been around.

We get them at the grocery stores, we use them to pack our lunch , and we have

hundreds of them laying around your house. Paper bags are made to be strong so that

they can hold much heavier objects. Two of the best features of a paper bag are that they

are environmentally safe and they are reusable. Yash papers is a paper manufacturing

company so my guide assigned me to visit different paper bag manufacturers & dealers

for survey of the consumption in a month. What are their demands and how much order

of paper they place to Yash papers limited?

FINDINGS

This project given to me by my guide Mr. sailash singh I tried my best to get up with the

project. My work was to find how much paper bag manufacturers are benefited for yash

paper limited, Before starting my job I collect all information regarding paper industry

and paper bag. so I have to need to know about the various features of the paper like

GSM(gram per square meter)

Tear factor

Cobb factor

265

I found out that the services provided by yash paper limited are better and cheaper

to there competitors.

Demand of paper bag increases day by day. Paper bag’s use mostly in urban area

.Manufacturing of paper bag is very profitable business.

Mostaly 80-100 gsm paper use for paper bag. so it is important for yash paper

limited to increase manufacturing of high gsm paper.

Mostly paper bags manufacturer by using wood pulp but yash paper use

bagas,bora,soft wood pulp so it is very costly.

Also I find some other point that given below

EFFECTS

Reusable bags are an alternative to paper or plastic.

Paper bags are made out of kraft paper. Kraft paper, in turn, is made by heating wood

chips in a chemical solution at high temperatures. If you have ever driven by a paper mill,

you have probably smelled the stench that emanates from it because of these chemicals.

Not only are the chemicals harmful, the wood chips contribute to deforestation as well,

since trees are cut down to produce these wood chips. In addition, the use of such

chemicals has been proven to contribute to water pollution, air pollution and acid rain.

After the paper-making process in complete, the chemicals filter down into the

waterways. The chemicals' toxicity settles into the waterways' sediments, where it can

remain for a long time.

MISCONCEPTIONS

It is often thought that because paper bags are somewhat biodegradable, they must be

safer than plastic bags. The reality is that paper bags take more energy to recycle than

plastic bags do. Also, studies in landfills have shown that because of lack of light and

moisture, paper doesn't break down any faster than today's plastic bags. In addition,

recycling rates for both paper and plastic bags have been very low.

266

POTENTIAL

While neither paper nor plastic bags are safe, there is an alternative to both. Reusable

cloth bags are becoming increasingly popular at grocery and chain stores. They can be

purchased for a small amount, usually $1 per bag, and can be used repeatedly.

Paper bags remain an option in grocery stores and are preferred by many consumers for

convenience; some people assume they are less damaging to the environment than plastic

bags. The production of paper bags is, however, harmful to the environment in several

ways. There are many identifiable pros and cons for the consumption, production and

disposal of paper bags.

Email

Send to Phone

Print Article

Add to Favorites

Flag Article

PAPER BAG CONSUMPTION

Ten billion paper bags are used annually in the United States alone. It takes 14 million

trees to meet this demand. Many consumers prefer paper bags because they hold more

than plastic bags and are sturdier, but stores mostly prefer to give out plastic bags because

they are cheaper than paper.

PAPER BAG PRODUCTION

Paper bags are mostly made from virgin tree pulp because recycled pulp is not as strong, so

their production inevitably begins with chopping down trees. Paper bag production is

damaging to the environment in two ways: chopping down trees reduces the absorption of

greenhouse gases, and the manufacture of the bags requires use of toxic chemicals that

267

contribute to air and water pollution. Additionally, the transportation of paper bags, which

are relatively bulky and heavy, requires the consumption of petroleum, a non-renewable

fossil fuel that causes further air pollution.

PAPER BAG DISPOSAL

A paper bag that ends up as litter will degrade in 10 months; however, in a landfill, it will not

degrade for hundreds of years. Paper bags that are printed with vegetable-based dyes can be

composted to provide a useful garden fertilizer. Paper bags can be reused as trash bags in the

household and reused for groceries several times.

PAPER BAG RECYCLING

Less than 15 percent of paper bags in the India are recycled. Paper can only be recycled four

to six times, and recycled paper is usually mixed with virgin tree pulp for strength, so

recycled paper bags are rarely made from 100 percent recycled materials.

PAPER BAG USE ON THE RISE

In almost any country where there are retail stores, whether accessories, clothing,

groceries or even gift shops, we will find shopping bags, both plastic and paper. Plastic

bags have been very popular because they are durable, attractive and can be used later in

a variety of ways even around the house. But paper bags have also been increasing in

usage. While stores do offer the option for the customer to carry out their newly

purchased merchandise using either plastic bags or paper bags.

Plastic bags, while ideal, can pose a danger to small children. There have been numerous

documented cases of death cases by suffocation when a child (and even adults in some

cases) have pulled a plastic bag over their heads by accident and have been unable to free

themselves in time. With that in mind, families who have small children tend to avoid

plastic bags when shopping and opt instead to go for paper bags.

268

Paper bags have been hailed as being very cost effective for both the consumer and the

retailer. This is because for the consumer, they are free with each purchase. On the other

hand for the retailer, purchasing paper bags is cheap because they take advantage of

economies of scale (by buying in bulk).

There are different types of paper bags for shopping. There are those that are single-use

and those that are recyclable. Many homes are now trying to avoid trash and so tend to

lean more towards recyclable paper bags. These are usually very durable in comparison

to other bags of their class and can endure a weight that is much more than their actual

weight. Recyclable paper bags can also be used again and again.

In many parts of the United States, there are recycling centers where people can throw

their single-use paper bags for recycling. This greatly saves the environment and can

even reduce fires especially in the summer. By using authorized recycling center for

paper bags rather than attempting to dispose of the bags themselves which is a common

cause of many summer fires, the environment is preserved.

There are many paper bag manufacturers in the world. Many of these are also the same

plants that produce other paper products. Environmentalists sometimes contend that the

use of paper bags contributes to the destruction of the world’s forests and by extension

the environment. While there may be some truth to the fact that paper products have

accelerated the rate at which trees are cut down, the use of paper bags has not necessarily

resulted in more trees being exterminated. This is because in every paper factory, there

are waste products that are not actually used for the end product. These waste products

are the ones that are recycled to produce paper bags. Environmentalists should therefore

rest in the knowledge that paper bags are safe environmentally.

While competition from plastic bags is stiff and a reality to face, paper bags are not going

anywhere and are still a top choice for many shoppers.

269

SWOT ANALYSIS OF YASH PAPERS LIMITED

STRENGTHS

Large and growing domestic market.

Availability of personnel across all levels.

Well-developed printing industry.

Migration towards high environmental compliance through increased investments.

Rich know-how in non-wood pulping and applications.

CHALLENGES

Small and fragmented industry structure.

Low economies-of-scale across most units.

Non-availability of key input resources.

Environmental hazards.

Technology fatigue resulting in sub- optimal capacity utilization.

OPPORTUNITIES

Enormous domestic market potential.

Strong forest plantation potential.

Cost arbitrage.

Import substitution across some paper varieties.

Potential for industry development based on FDI inflow.

THREATS

Mills lacking international standards.

Delay in plantation growth and deficit of wood fibre.

Rising pulp costs.

Increasing energy costs.

Significantly high water consumption levels in paper manufacture.

High capital costs deterring investments.

270

LEARNING DURING SUMMER TRAINING

I did my summer training from Yash paper limited. Yash paper limited is reputed paper

manufacturer. I got a great experience under my summer training. I learnt a lot more

about paper manufacturing, paper grade testing, and working of the selling department. I

am describing my knowledge which I experienced during my summer training under

following departments

1:- Production Department

2:- Research & development Department

3:- Sales & Marketing Department

During my summer training I know about 5’S.yash paper fallow these 5’S that are-

1. Shorting out

2. Systematic arrangement

3. Spic and span

4. Standardize

5. Self Discipline

In morning working is start with prayer of lord Hanuman. it is compulsory for every

Employer to join the prayer session. mobile phone is ban in office, fallow rule and

regulation of organization is compulsory.

1:-PRODUCTION DEPARTMENT

In production department I learnt process of manufacturing of paper & how the paper is

produce from raw material . They provide information about different papers .Yash

papers limited manufactures two types of paper viz. craft paper, and poster paper. There

271

are two types of craft paper viz. ribbed paper & plane paper, There are three machines for

the manufacturing of different papers. First machine is used for manufacturing only craft

papers, second machine is used for manufacturing all type of papers and the third

machine is used for manufacturing the poster papers.

These papers are manufactured by straw, sack, & bagas. They make 32 grade of papers.

All paper grades with there corresponding code is given on separate paper attached.

2:- RESEARCH & DEVELOPMENT DEPARTMENT

In research & development department I learn about the testing of different type of

papers . In research & Development department all the 32 grades are tested. There are

following types of testing:

(i):- Gram Square per Meter(GSM)

(ii):- Tear Factor

(iii):- Cabb-60

(iv):- Tensile

(v):- Thickness

(vi):- Bulk

(vii):- Brightness

(viii):- Porosity

3:- SALES & MARKETING DEPARTMENT-

In this department I learnt how the order is taken from the customers & how to visit the

market. Details of customers requirement is provided to the Production department for

manufacturing the paper & finished products for delivery to the customer .One of the

most important function of this department is to develop good relationship with dealers

and customers .The Machines works continuously day and night to complete the orders in

272

time. After manufacturing and testing of papers, the product become available for

distribution and sent to stores department which supply the orders of every customer.

MY WORKING EXPERIENCE-

It was a great pleasure to be the part of Yash papers. During my summer training I learnt

how can we work in an organization. What difficulties arise during working in any

organization.

Now while working I came to know that how much theory is different from practical

experience.

I learnt more about paper industries. I learnt that patience is an important ingredient to be

a successful corporate player because of the questions of the customer. How can we work

in a group and what problems arise inside & outside of the organization.

It was a great experience for me a to be a marketer one must have the convincing skill.

Visit in market was a new experience for me. I learnt much more during my work in

Yash papers limited. The staff members behave very friendly and they share their

experience from time to time. They also gave the information about work.

SUGGESTION

Marketing is back bone of any industry.

Better marketing better business.

Superior products may also flop due to poor marketing management.

Marketing management helps in strengthening the relationship among

factory, dealers and customer.

Marketing helps in forecasting the future demands of the product in the

market.

273

Marketing organization must be trained before launching the new

products.

Marketing personnel must be aware of the merit and demerit of the

products.

Supply of orders in time increases the reliability of the organization in the

market.

Marketing organization should helps in solving the problems of their

dealers and customers.

Marketing personnel should try to understand the problems of their dealers

and customers.

Increases machine production,

Perfect testing of papers are done by machines to know the quality.

This conclusion shows that marketing organization in any industry or organization is the

main component of the distribution channel for the marketing of their products.

274

CHAPTER 10

CONCLUSION

Due to tough economic times, most major food stuff manufacturers are becoming

particular how they package their products. A casual glance at the isles at the

supermarket will tell you that most food is packaged in plastic or paper bags. While

plastic bags have been very widely used, there has been a recent shift to paper bag

products because of their cost and the fact that they are environmentally-friendly.

For decades, plastic bags have competed toe-to-toe with paper bags, from the

manufacturing plants to the retail supermarkets. In many countries now especially the

United States, shoppers at local super markets and retail chains offer their customers the

option to have their products bagged in plastic or paper. While many customer still value

plastic because of its durability, water-resistant nature and also the fact that it is

extremely reusable, paper bags are also wildly popular.

One of the reasons why paper bags are popular is because of safety. Plastic bags have

been responsible for many deaths especially for small children. This is because children

are fond of playing with plastic bags and one of the ways in which they do this is to place

the bags over their heads. In the event that the child is unable to free themselves fast

enough, death by suffocation can occur. This is one major reason why shoppers prefer

paper bags to plastic bags.

Another reason why shoppers prefer paper bags is because they are easily disposable.

While plastic bags have obvious advantages, they tend to litter the house because most

people reuse them. This can cause an environmental issue especially it there are wrong

disposal. If disposed of wrongly especially in areas with farm animals, these animals can

swallow these bags and suffer health repercussions. One major disposal issue that

environmental proponents fight about in regards to plastic bags is the way recycling

275

plants handle them. While recycling has been welcomed by many as a safe way of getting

rid of plastics that have outlived their use, it has since been discovered that they are

incinerated thereby releasing harmful toxins into the atmosphere.

Paper bags are light, safe and can be easily discarded after they are used. They therefore

pose no threat to small children or to the environment. Although the chances of paper

bags causing a fire exist, the chances are slim compared to dry grass during summer.

When children play with paper bags, they end up shredding them and therefore they pose

no imminent threat.

Paper bags are also extremely cost effective for the retailer and in most supermarkets,

they are free with any purchase. This may not necessarily be the case with plastic bags

where in countries such as Ireland, pose such an environmental hazard that an additional

charge is passed on to shoppers who want to carry their grocery purchases using plastic

bags.

BENEFITS OF THE PAPER BAG

“ The manufacturing process for a paper bag requires four times as much energy as the

manufacturing process for a plastic bag. The production of paper bags creates 50 times

more water pollutants than the production of plastic bags and 70 percent more air

pollutants. Additionally, it requires 98 percent more energy to recycle paper bags than it

does to recycle plastic bags, but the recycling rate for paper is higher. “

100% reusable, recyclable and biodegradable.

Easier to carry than plastic bags.

Holds more items than plastic bags = fewer bags to handle.

Environmentally preferred.

Contains 40% post-consumer recycled material.

A renewable resource - comes from trees.

High profit margin

276

PAPER BAGS ARE BETTER THAN PLASTIC

ISSUE 1: ENERGY AND NATURAL RESOURCES

It takes more than four times as much energy to manufacture a paper bag as it does to

manufacture a plastic bag.

ENERGY TO PRODUCE BAG ORIGINALLY (BTUs)

Safeway Plastic Bags: 594 BTUs

Safeway Paper Bags: 2511 BTUs

Of course, most paper comes from tree pulp, so the impact of paper bag production on

forests is enormous. In 1999, 14 million trees were cut to produce the 10 billion paper

grocery bags used by Americans that year alone. Paper bag production delivers a global

warming double-whammy forests (major absorbers of greenhouse gases) have to be cut

down, and then the subsequent manufacturing of bags produces greenhouse gases.

ISSUE 2: POLLUTION

The majority of kraft paper is made by heating wood chips under pressure at high

temperatures in a chemical solution. As evidenced by the unmistakable stench commonly

associated with paper mills, the use of these toxic chemicals contributes to both air

pollution, such as acid rain, and water pollution. Millions of gallons of these chemicals

pour into our waterways each year; the toxicity of the chemicals is long-term and settles

into the sediments, working its way through the food chain. Further toxicity is generated

as both plastic and paper bags degrade.

277

POLLUTANTS PAPER V.S. PLASTIC

Paper sacks generate 70% more air and 50 times more water pollutants than plastic bags.

ISSUE 3: RECYCLING

It takes 91% less energy to recycle a pound of plastic than it takes to recycle a pound of

paper. But recycling rates of either type of disposable bag are extremely low, with only

10 to 15% of paper bags and 1 to 3% of plastic bags being recycled .

ENERGY TO RECYCLE PACKAGE ONCE (BTUs)

Safeway Plastic Bags: 17 BTUs

Safeway Paper Bags: 1444 BTUs

Although paper bags have a higher recycling rate than plastic, each new paper grocery

bag you use is made from mostly virgin pulp for better strength and elasticity.

ISSUE 4: DEGRADABILITY

Current research demonstrates that paper in today's landfills does not degrade or break

down at a substantially faster rate than plastic does. In fact, nothing completely degrades

in modern landfills because of the lack of water, light, oxygen and other important

elements that are necessary for the degradation process to be completed. A paper bags

takes up more space than a plastic bag in a landfill, but because paper is recycled at a

higher rate, saving space in landfills is less of an issue.

With the advent of supermarkets and other retail chains in the world’s major cities, there

has been an increase in demand for paper bags and plastic bags. After all, these are

278

indispensable in packing the items that the shopper has purchased. In most supermarkets,

retail chains and grocery stores, there is choice to have your items bagged using plastic or

paper. There are many retail outlets that still use plastic but in the United States, there is

always the choice to use either. This has raised the question as to which is ideal, the

plastic bag or the shopping bag. As we shall see, both have their pros and cons.

The plastic bag has been a top choice for many retailers for some time owing to the fact

that it is strong and durable. This means that the plastic bag can bear considerable weight

and rather than go home with a series of bags, the shopper can carry multiple items in one

plastic bag and be assured that everything will be safe. While there are brands paper used

to make the paper bag that are very durable and strong, there is always the danger that

when using the paper bag, it might spill its contents if stretched too far.

The plastic bag is also water-resistant. This can come especially handy when buying

groceries or items that might leak such as lotion. When it comes to the paper bag, there

can be some concerns especially if you are carrying something that may tend to leak or

was wet (fruits). Paper bags can soak water and become soggy thereby tearing and

spilling their contents in a most unceremonial manner.

Paper bags, although popular, may not be reused too many times. This is not the case

with plastic bags which can be reused around the house multiple times. This renders them

extremely economical. Paper bags because of their overall lack of durability, cannot be

used too many times and may only ensure for the duration of the original purpose for

which they were issued.

Plastic bags have become an environmental issue. This is because they can be unsightly

especially if disposed of the wrong way. In some instances, especially in farmland areas,

cattle can swallow these plastic bags and this can become a health hazard for them. Both

plastic bags and paper bags can also cause fires especially if disposed wrongly. In

countries whose summers tend to get very hot, this can easily be an area of major

concern.

279

CHAPTER 11

BIBLIOGRAPHY

http://www.economywatch.com/business-and-economy/paper-

industry.html (20-JUNE-2009)

http://stationery.indiabizclub.com/info/properties_of_paper/types_of_

paper (21-JUNE-2009)

http://www.ipma.co.in/ (23-JUNE-2009)

http://yash-papers.com/ (25-JUNE-2009)

http://www.centurypaper.com/ (26-JUNE-2009)

http://www.jkpaper.com/ (27-JUNE-2009)

http://www.orientpaperindia.com/ (29-JUNE-2009)

http://www.ramapaper.com/ (30-JUNE-2009)

http://www.westcoastpaper.com/ (2-JULY-2009)

http://www.biltpaper.com/atoz3.asp (4-JULY-2009)