‘We want JK Paper to be a synonym for excellence’
A S Mehta is President of JK Paper Ltd, one of the largest paper manufacturers in India with a presence in all major segments like office papers, high-end packaging boards, coated papers and high bright maplitho. He is on the board of various associated Companies, Trusts and Research bodies, including UltimaFinvest Ltd, JK Employee Welfare Association Ltd, JK Provident Fund Trust and JK Superannuation Trust. Mehta is also involved in several programmes of religious institutions and career-counseling workshops for Rural Children. He has conducted over 20 such workshops in the last four-five years across Rajasthan, Delhi, Madhya Pradesh, Karnataka, Uttar Pradesh and Maharashtra. A philanthropist by nature, he has personally aided institutions for the less abled. A Chartered Accountant with all India merit, Mehta has extensive experience of 25 years and in his previous assignment, as Vice-President (Corp A/Cs), headed commercial activities at Plant and Corporate office. He also held the position of marketing director with JK Tyre before taking on the responsibility of JK Paper president. He is an authority in the fields of finance, taxation and audit.
What new initiatives and action plan have been taken in your company?
To start with, we undertook a massive expansion programme with an investment of Rs 1,775 crore at our unit JKPM in Odisha. In the paper industry where profitability is under pressure; we took a bold step. The project, with a special focus on Copier paper segment, will enable us to reach our aspirations of achieving 30% market share in this segment. We have already reached 26% from 19 % earlier due to this recent capacity expansion in. We believe that now the journey from 25 to 30% is challenging but doable.
The project also involved comprehensive improvements in efficiency. It is fibre, energy, manpower and water efficient besides lower pollution levels. The new plant capacity at unit JKPM viz 165,000 TPA is more than the combined capacity of the existing machines (135,000 TPA) at the same location. Our worker productivity has also increased phenomenally.
Alongwith capacity expansion in paper we also expanded our pulp capacity. Our old pulp mill was producing 300 tonnes of pulp per day but new pulp mill has capacity of 630 tons per day. The new plant is a state of the art and fully automated plant. The final product i.e. the paper is not hand touched till the time it is loaded on to the truck.
Our Product and Distribution areas have also been revamped. We have been the pioneers in marketing and branding of paper and continuing with this tradition have recently introduced two more brands in the 'Office paper' segment viz; 'JK C Max' and 'JK Max'. These two brands are targeted so as to match the expectations of the discerning customers looking at run-ability, less jamming and smooth flowing paper with good printability yet providing value for money.
While ‘JK C MAX’ is aimed to focus on the 'Jobbers' and 'SOHO’ in the A & B class cities, ‘JK MAX’ will help in reaching the upcountry markets.”
We understand the needs of customers and based on their preference, now JK Paper has copier paper catering to all. With the new brands and the well known existing brands like JK Copier, JK Easy Copier, JK Copier Plus, JK Sparkle, JK Cedar, our company is now in a position to cover the entire copier market and at all price points.
In distribution we started working on geographical territories where we were not present or not in sizeable number. We appointed whole lot of distributors, redesigned distribution system and created more regional centres to cater to the market in a much better way.
To improve the supply chain and response time we have doubled the stocking centres.
How important are marketing and advertising campaigns for you and how do approach PR activities?
India has generally been a seller’s market for paper. There has been significant changes recently. To adjust to the changing conditions, we have been taking up road shows specifically in smaller cities, consumer contact programs, training modules and increasing soft skills of our sales team. These are all oriented towards a different selling system that is emerging. We have been taking initiatives though we realise that we need to do more.
What is your take on market competition?
Our consumers have become more demanding and discerning. They want best quality paper at affordable prices. With increased capacity we have a challenge of pushing higher volumes into the market. The market has also become more competitive due to imports as also intense competition amongst domestic players.
We have taken on many such challenges in the past. With high quality product, motivated marketing and sales team, better production efficiencies, we are confident of meeting the new challenge as well.
What are the key operational areas of your company?
Apart from Production and Marketing, Plantation activity is also very important given the serious domestic shortage of the key raw material — wood. Almost 90% of the requirement of raw material comes from our own plantation activity. We have been increasing the area under the Social Farm Forestry programme, in recent years; and covered close to 15,000 hectare in 2013-14 much higher than the previous year.
Our target is to plant more than what we need so that we are not destroyer of the environment.
Rather, we become creators by adding green cover to the nature. We do a variety of research and studies on various plants and trees also.
What strategy do you follow to remain ahead in the Industry?
Providing quality products at affordable prices and surpassing the expectation of the customers is the 'mantra'. For this we focus on manufacturing and managerial excellence combined with customer driven approach through a strong and well oiled distribution network.
What are your expectations from the new government?
Lack of raw materials to the paper industry is a major challenge. We have been meeting officials from the ministry of forest affairs and environment on this issue. If we wish to sustain the Indian paper manufacturing, an industry friendly plantation policy is necessary.
Today, the manufacturing and raw material cost in Indonesia and other Asian countries are half of what it is in India. The import of paper from these countries attracts no custom duty due to INDO-ASEAN Free Trade Agreement (FTA). There is no level playing field because our competitors in Indonesia are making paper at 50% of our cost and are able to sell here in India at nil import duty. This is one of the biggest challenge for Indian government today.
Therefore, a plantation policy is a must so that massive plantations can take place; this can then become a perennial source of raw materials to feed the Indian paper industry and can be made available at a much competitive price to the Indian Paper manufacturers.
What are your future plans regarding the growth and expansion of your company?
Our capacity expansion programs have been aligned with the market trends. The timing of the programs however depends on the profitability and also taking into account the time required to recoup the investment already made in the recent expansion program. In other words, while we will wait and watch the current trends in the near term, long term objective is to maintain our market share of 30% in Copier papers and further strengthen our position in Coated Papers and Packaging Board.