INDUSTRY PROFILE

The word paper derived from the word papyrus and is a substance composed of fibers interlaced into a compact web, which can then be macerated into pulp, dried and pressed.

Today, paper includes a wide range of products with very different applications: communication, cultural, education, artistic, hygienic, and sanitary as well as for storage and transportation of all kinds of goods. Its almost impossible to imagine a life without a paper.

The History of Paper

Paper making is one of the inventions by Chinese.105 A.D is often cited as the year in which papermaking was invented. In the year, historical records show that the invention of paper was reported to the eastern Han Emperor Ho-di by Tsar Lon, an official of the imperial court. Recent archaeological investigations. However, place the actual invention of papermaking some 200 years earlier. Tsar Lon broke the bark of a mulberry tree into fibers and pounded them into sheets. Later it was discovered that the quality of paper could be much improved with the addition of rags hemp and old fish nets to the pulp. The paper was soon widely used in china and spread to the world through the Silk Road. An official history written some centuries later explained. In ancient times writing was generally on bamboo or on piece of silk. Which were then called jabot silk being expensive and bamboo heavy these two materials were not convenient. Then Tsai Lon thought of using tree bark, hemp, ranges, and fish nets. In 105 he made a report to the emperor on the process of paper making, and received high praise for his ability. From this time paper has been in use everywhere and is called Paper of Marquis Tsai.

In few years, the Chinese began to use paper for writing. Around 600 A.D. woodblock printing was invented and by 740 A.D., The first printed newspaper was seen in China. To the east, papermaking mover to Korea, where production of paper began as early as the 6th century A.D. Pulp was prepared from the fibers of hemp, rattan, mulberry, bamboo, rice straw, and seaweed. According to tradition, a Korean monk named Don-Cho brought papermaking to Japan by sharing his knowledge at the Imperial Palace in approximately A.D 610, years after Buddhism was introduced in Japan. Along the Silk Road, we learned that paper was introduced to Xinjiang area very early according to the archaeological records. The paper found at Kaochang, Loulan, Kusha, Kotan, and Dunham sites dated as early as the second century. The technique eyentaully reached Tibet around 650 A.D.: and then to India after 645A.D. By the time Hsuan Tsang from China arrived to India in 671 A.D., paper was already widely used there. For a long time the Chinese closely guarded the secret of paper manufacture and tried to eliminate other Oriental centers of production to ensure a monopoly. However in 751 A.D. the Tang army was defeated by the Ottoman Turks at a mighty battle at the Talas River. Some Chinese soldiers and paper makers were captured and brought to Samarkand. The Arabs learned the paper making from the Chinese prisoners and built the first paper industry in Baghdad in 793 A.D. They, too, kept it a secret, and Europeans did not learn how to make paper until several centuries later. The Egyptians learned the paper making from the Arabs during the early tenth century. Around 1100 A.D. paper arrived in Northern Africa and by 1150 A.D. it arrived to Spain as a result of the crusades and established the first paper industry in Europe, in 1453 A.D. Johann Gutenberg invents the printing press. The first paper industry in the North America was built in Philadelphia in 1690.

Indian Paper Industry

Paper, which is manufactured from wood fiber, is the wildly used medium for communication even in this computer-dominated era. China is the origin of paper in its current form though the Egyptians used a paper like substance called pypus in 4000 BC. Three countries, viz., USA, Japan and China account for nearly half the global paper production and consumption: in the world. Indian industries contribution to the global paper production is presently just two percent. This offers a good potential for the paper makers in India. The signs are already visible as the industry is growing at a faster rate in India (around five percent per year) than in the rest of the world (around three percent)

The report analyses the state of Indian paper industry in detail. Starting with a brief introduction about the paper industry, the report tracks its history, with emphasis on facts like raw materials scenario in India, role of forestry, the manufacturing processes. Importance of pulp and classification of paper products etc. A comprehensive comparison of Indian paper industry with global industry is given to substantiate the fact that vast potential exists for paper manufacturers in India.

The report features demand and supply analysis for pulp, paper and paperboards and newsprint along with a detailed analysis of the user industries of paper. The level of imports and its significance in Indian paper market and negligible paper exports from India have been analyzed in good measure. The main reason for poor export is the lack of quality paper producers in India. This indirectly implies that quality paper makers can effectively use India as base for their operation as the other conditions are positive. This facet has been substantiated by requisite analysis.

The report provides a crisp cost analysis in of the paper industry, apart from a comprehensive price analysis for various paper products in India and its dependency on international prices. The Indian paper industry is witnessing structural changes, as major paper manufacturers plan and execute consolidation/restructuring measures. The strategies of the major players, their market share and financials have been analyzed. The companies whose financials have been analyzed. The companies whose financial have been covered include: Andhra Pradesh Paper Mills Ltd., Andhra Pradesh Paper Mills Ltd., UNIT:CP Bhadrachalam Paper Boards Ltd., Tamil Nadu Newsprint and Paper Ltd., West Coast Paper Ltd., Ballarpur Industries Ltd.,

Paper Industry in Andhra Pradesh:

In Andhra Pradesh there are four big paper mills and the remaining are small paper mills based on their installed capacity in Andhra Pradesh totally there are-21 units with capacity of 4,48,320 T.P.A The five big mills are 1. The Andhra Pradesh Paper Mills Ltd. 2. Sirpur Paper Mills Ltd. 3. Sri Rayalaseema Paper Mills 4. Bhadrachalam Paper Mills. 5. Coastal Papers Ltd.,

The production capacity of these mills is above 2.5 lakh tones. The total production of Andhra Pradesh comes to about 3/4th of India's total production which is a really a great achievements Source: Industrial Report of 2008-09

PAPER INDUSTRY STATE WISE DISTRIBUTION OF UNITS AND CAPACITY

Capacity in Tonnes
5 150 76 74 91 112 36 110 84 219 185 134 74 1350

State
Assam Andhra Pradesh Bihar Gujarat Haryana Karnataka Kerala Madhya Pradesh Tamilnadu West Bengal Maharashtra Orissa Utter Pradesh Total

No. Of Units
4 8 3 16 11 8 2 4 5 12 24 3 10 110

Mills
2 22 4 60 16 14 5 21 31 18 71 9 73 346

Source: Industrial Report

The Advent of the Paper Machine: Nicholas- Louis Robert

In 1798, the Frenchman Nicholas-Louis Robert (1761-1828) invented a prototype of a machine on which paper was formed on a continuous sheet of wire cloth. The invention was patented on January 18. 1799. After Robert, a sergeant-major, left the French army, he had gone to work as a proofreader for the noted printer Pierre-Francois Didot, and was soon placed in charge of the accounting department at son St. Leger Didot's mill in Essones, France. While there, Robert had conceived the idea of a machine to produce a continuous roll of paper to fill the urgent need for banknotes after the French Revolution.

St. Legcr Didot encouraged Robert to use the mill's workshop and materials in the development of the paper machine. After five years of work, Robert completed the design and sold his patent rights to St. Leger Didot for the sum of 27,400 francs. Financial difficulties at the mill, however, prevented Didot from paying Robert for the patent and although Robert eventually recovered ownership he was never able to realize any money for his invention.

The Fourdriniers:
Didot took the models created by B.obert to his English brother-in-law, John Gamble, who secured English patent 2487 for an improved version of the machine in April 1801. The improved machine came to the attention of brothers Henry and Sealy Fourdrinier, who engaged engineer Bryan Donkin and built a new and further improved machine in 1807. Although the Fourdriniers invested up to 60,000 pounds on the development of this machine, they received no royalties because of an error in their patent; they did gain some recognition, however, as most modern paper machines are referred to as "fourdrinier" machines. Bryan Donkin was the only person who gained financial security from his work on the paper machine; by 1851, he had designed a total of 191 machines, including 83 for British mills, 105 for Europe, one for India, and two for the United States.

PAPER INDUSTRY UPDATE

Indian paper industry is the 15th largest in the world arid provides employment to 1.3 million people in the country contributing Rs25 billion to the Government. The industry has recorded a

volume growth of CAGR of 5.47% over the last three years. In 2003-04; it recorded a volume growth of six percent, in line with the GDP growth. Indian paper industry has a 1:1 correlation with the economy. With the expected GDP growth of 6.9 percent for Financial Year 07 and 7-8% for Financial Year 08 as per RBI, the paper sector is expected to record a similar growth rate. The domestic per capita consumption is the lowest at 6kg compared to the South Asian and the world average of 11 kgs and 53kgs respectively. The Indian paper industry has an installed capacity of 6.7 million tons while, the effective capacity is estimated to be lower at 6.15 million tons

Favorable demand - supply scenario to keep prices firm

The demand for paper is influenced by various macro-economic factors like national economic growth, industrial production, promotional expenditure, population growth and the Government's allocation for the educational sector. Domestic demand for paper is expected to grow at a CAGR of 6-7%. India's paper demand is expected to touch 8 million TPA by 2010. A leading global paper industry consultant projects a shortage of about 0.7 million TPA by 2010.

Industry Capacity Utilization peaking up

Average capacity utilization of major players has been around 99% in FY08. There has been no new green field capacity in the paper industry in the last four years. The last major projects were TNPL's 90000 TPA bagasse based mill in 2004 and Sinar Mas's 115000 TPA coated paper plant in 2006. Stringent environment guidelines have been deterring fresh green field investment in the sector. In 2008 the UNIT: CP. Has increased to 3, 24,000 TPA.

COMPANY PROFILE
Coastal Paper Limited was established under The Companies Act in December, 1974 at Madhavarayudupalem near Kadiyam in East Godavari district, A.P.

At the established time, the company had one m.f. as initial unit, It was commenced its commercial production of Kraft varieties of paper during March 1977. In the year 1980 the

company expansion its unit by importing m.g. machine from Sweden country in July, 1982, then the m.f. machine produced the collateral varieties like cream wove, azure wove, duplicating, azure laid etc., and m.g. is used for production of craft varieties of paper. The Kraft and cultural varieties of paper production by the CEL became as the main consumer's for Kraft varieties within very short span of time. After that CPL introduced different Kraft varieties like deface Kraft ribbed Kraft so on.

After a very long period gap, the CPL started another unit, MF-II by March, 1999. It is used for manufacturing of newsprint. Because newsprint has more demand from those days. CPL has satisfied the customer. Dealer needs and. Wants with presenting suitable requirements size, recently in December, 2000, the company became as subsidiary to Andhra Pradesh Paper Mills (APPM).The company used agricultural residues like rice straw, wheat straw, wheat straw, bagasse, jute, waste, imported pulp. As major raw material and also they supplement imported wastepaper and wood pulp to maintain the good quality.

The company has got provision its raw materials to protect from damages as they are available seasonally and also it has the paper go down to store the finished goods in the Forms of reels and sheets.

The company follows ISI Standards with the help of laboratory at the plant. This laboratory tests all the characteristic problems of paper by its experts. This company has more dealers all of southern states and its surroundings satisfy their customer needs in that areas.

The present capacity of production of CPL is 10 tons per day on machine MF-I, 50 tons per day on MG-I, 120 tons per day, on machine, MF-II. Through the year, the company is contributing its substantially struggling towards the self-sufficiency in paper verities.

RAW MATERIALS
CPL as the agro based industry. It is one of the best medium size agro paper mills in the country. The coastal papers limited is based on machine wise raw materials are:

MF-I: - Rice, straw, jute, waste, bagasse, gunny waste, white jelly, (Purchased from local), bleached wood pulp (import), indigenous wood pulp (from J.K. corporation and Ballarpur industries). MG-II - Rice straw, jute waste, bagasse, gunny waste, imported waste and Kraft cuttings, old corrugated cartoons, new double line Kraft cuttings, Kraft waste (available in the form of boxes). Kraft cuttings, (from local area).

MF-III- It is based on the Recycled paper i.e., Waste paper, magazine trimmings, coated book stock, news and palm and palm sold, news print indigenous imported.

Operational performance
The performance of the mill was good among medium size agro paper mills, although the mill was established with indigenous plant and machinery with entrepreneur's own know-how. The operational performance of whole plant and machines were good. In operational performance, this mill obtained cent percent of capacity utilization at its first operation year. By

expanding its units, the mill started another unit; name MF-II for Newsprint. Through that period of time, the mill started getting profits.

MISSION STATEMENT
To be a powerful force in the pulp and paper industry Through: High level of productivity and excellence; Continual improvement in the quality of Human resources, Products, services and technology. Customer satisfaction; Concern for occupational health and safety. And Commitment to environment management.

VISION STAMENT
APPM by providing competitive value must emerge as the preferred choices for repeat purchased by an increasing number of satisfied customers, we should continue to be environmentally friendly and practice good corporate citizenship. We will follow a resultoriented style of Management, encourage Meritology and continuously improve on all parameters of operators there by producing a profit that improves the ratio of profit before tax (PBT) to turn over year on year.

Values
Employment Empowerment for commitment to total quality: team efforts and increased productivity: Ethical Management for esteem; credibility life and public Image.

Quality policy
To achieve customer satisfaction by: Meeting the needs and expectations of the customers. Continually improving the quality of out products, processes, and services. Communicating to appropriate levels within the organization, the need for continued commitment to quality. Enhancing the awareness and competence of human resources through training and development processes, and Establishing and reviewing our objectives for quality and synergy with overall business goals

Guiding Principles
Integrity of management, union, staff, workers and all people associated with us. Eco friendly process, Innovative value Engineering, Technology for better Quality and cost effectiveness, customer satisfaction for untrained growth and business. Consistently increased profitability for prosperity and growth of the individual and industry. Corporate citizenship for meeting societal objectives.

Towards a cleaner environment

The CPL is far away from habitat areas. The company has the belief that the cost pollution control is an inherent part of the manufacturing cost. The company, if financed by the ICICI, SCICI, IDBI so on. The environment of CPL its free from pollution control and abatement company spend substantial runs of money by providing full fledged effluence treatment facilitate incorporating separation of colored effluent for land treatment to avoid color problems.

SAILENT FEATURES OF CPL:

The operational performance of CPL is rich. The capacity utilized by this company is sent percent. Sustained dividend payment. Rich in Kraft strength and quality writing and printing papers and quality of news print. Locally availability of raw materials, straw, bagasses etc., The company is free from pollution control. Lowest capital investment. Minimum use of capital per unit output and per work place. Rich debt services record and advanced repayment of term loans.

PRESENT CAPACITY OF CPL:

`The present capacity of CPL is 61,200 tons per annum achieved by management with the
successful affords of workmen, junior staff, senior staff, they are followed new technology methods for production. There are three paper machines are working. The capacity levels of three machines are as follows: PARTICULAS MachineI finished-I) 10TPD 135 Cms. Open head inclined slice Four drinier 100-200M/Min (Machine Machine-II (Machine Glazed) 50 TPD 240 Cms. box Open head inclined slice Four drinier 100-220 M/Min MachineIII - III) 100-125 TPD 365 Cms box Pressurized head box Beloit-148 vertical slice. Four drinier 600 M / Min (Machine finished

Capacity Deckle Name

Wire part Speed (Max) Running Speed Dryers

150-170 M/Min 100-.180M/Min 550-580 M/Min 2&No,s (Four Groups) 23 Nos and 1 M.G 40 Nos (Six Group) cylinder; Open draw Nil Open draw 1 Provision for six roll, 3 NIP or 1 NIP Calendar Recycled paper, waste paper, magazine trimmings, coated book stock, news & palm sold newsprint indigenous imported.

Transfer to press Open draw selection Ion Size Pres Nil Calendars

Provision for six roll Not required and 3 NIP Calendar Agro based Rice Agro based Rice Straw, Gunny, Jute and Straw,bagassa, pulp gunny Waste, imported waste, Kraft cutting

Raw material

Pulping

Rewinders

Chemical pulping of Chemical pulping of De-inking Agricultural residues Agricultural residues. Centre shaft - winders Twin drum winder Jagen gurg Rewinder (SWD)

Capacity

6-10TPD

40-35 TPD

80-120 TPD Output depends on GSM, roll condition and sizes Move the G.S.M better the output. The machine has 5 stand 5 rolls - back, 2 rolls front by adjusting. Duplex Gutter jagenborg Two Stations for Chopping 50 size can be controlled Capacity: 50 TPD (8 -11 rolls) Output depends on Grammage and Cutter load (deckle length -365 Cms.) SIMPLEX MASENSCOT Located at PMC - III Finishing house at present being used for cutting both PMC - HI And M.G. Kraft (capacity on the Deckle utilization.

Cutters

Duplex Cutter Houbold Chemniz Cap: 10 - 15 TPD Deckle length-135 Cms.

SOURCE: primary data provided by APPM

PRODUCTION PROCESS
The production process does on three machines at CPL. For production; the raw materials are not used directly. First, the raw materials to be processed then resulted material are used as pulp. The process of raw material is as follows:

I.

PULPING:

1.

Pulping of Straw:
Here, the, straw of paddy is cut into the required size through chopper and it is cooked in

cylindrical tumbling digesters using eight percent caustic soda. After the completion of cooking, the made pulp is blown into a blow tank form there it is pumped to brown stock washer. The pulp is washed making it free, it free form black liquor by displacement of washing under vacuum. The washed pulp is present to screening and dickered to high density stock chart. Thus, made pulp is

bleached by single stage hypo bleaching system for getting the required brightness. After that the pulp is washed over a vacuum filter then, is stored in high-density tower.

2. Waste Paper Pulping:

Waste paper pulping is also an important pulping of CPL. Here, the waste paper like magazine trimmings, journals, etc, is cutter by the cutter into small pieces. It is charged to a hydro pulper. The pulp is sent through defalker and high density cleaner. Finally, it is stored in stored in storage chests. Chests are used for store pulp.

DE-INKING PROCESS:
De-inking process is an important process for MF-II machine. In this process, the company used local news papers and imported news papers, magazine trimmings, quoted book stock. All these paper are separated a forms the pins, clips and other unwanted materials, which placed in the magazines through different stages of de-inking process. Finally the ink is removed from magazine and other paper writing by using machines.

II.

STOCK PREPATION:

It is central department between paper machine and pulp. The stock preparation units are separated to MF-I & MG-I and MF-II. After pulp made from the above specified any method. It is blended into requisite proportions and this blended into requisite proportions and this blended from is processed by the refiners and finally, chemicals and dyes are mixed with the pulp to pass for production unit.

The various dyes followed by the stock preparation department are Metallic - violet, plum, Starches, Tonopah, Victoria blue, M-blue, Rhoda mine, auromine, etc. The various chemicals blended at the stock preparation are as follows: Sodium hydroxide (Caustic soda) Ferric alum Non ferric alum Hydro choric acid

Sulphuric acid Ivax Sodium silicate Sodium hydro sulphite etc.

III. MACHINE PROCESS:

The mixed stock pulp is passing on through machines by diluting it. With it with one percent consistency and reaches through head box. The fibers are woven in to a sheet of paper on a four-drainer section. Then it is passed on to the press section -II. The dreiners are used to evaporate the moisture on the pulp. Each drainer must reduce the moisture than previous one. After press section, it goes to calendar. Finally, it reaches the paper feel where the paper is rolled.

The rolled paper is cutter into sheets or reels by rewinders / cutters in required size by the dealer. The reels / sheets are packed at finishing house and sent to paper go down to dispatch for dealers.

PACKING
Packing of pager means to protect paper from, damages in the transportation. So, packing of paper is one important activity for the company. The CPL has two types of packaging in paper.

l.Reel; 2. Sheet l. Reels: Reels are in the form of roll paper. It is packing at finishing house depending upon the order specified by the dealers/customers. Before packing or reels, the rolls are converting into the reels required by the dealers with the help of rewinders and also they remove the damage papers, if it occurred in the machine process. After packing of reel, they note the lot number, lot size, net weight, etc., on the packing cover of reels.

2. Sheets:

Sheets are in the form of reels. At finishing house, the rolls are cutter into the sheets by the paper cutters. One ream consists of 500 sheets. If the ream is Kraft paper, then 480 sheets of paper are considered as one ream to maintain standard weighty. All these sheets are packing into bundles regarding standards weights. After bundle the reams, it will be tagged into the bails

by putting size, serial no, Kraft variety number, etc., on it. Finally all these bails come to the paper go down.

Paper Godown:
After the completion of packing of paper, it comes to paper godown. The paper godown is a house where the company stores the packaging, paper up to deliver time. At paper godown, the paper packaging details noted on the cover will be feeded by the computer for verification purpose. Then they match the details of packaging with the orders specified by dealers. If it is matched with the dealers order, then they end the packaging paper by the vehicle to reach dealer at specified time. Product Mix

The product mix CPL is as follows:

Machine name
MF-I Cream wove Azure wove Azure laid

product

Duplicating paper

MG-I

Kraft paper Deluxe Kraft paper Super deluxe paper

Ribbed Kraft Map-litho

MF-II

News print Paper boards

BOARD OF DIRECTORS
Mr. Paul Brown, Chairman Mr. Thomas Kadien Mr. Brett Mosley Mr. Shreeyash Bangur Mr. M.S. Ramachandran Mrs. Ranjana Kumar Mr. M.K. Sharma Mr. Adhiraj Sarin Mr. Milind Sarwate Mr. Praveen P Kadle

Mr. Ram Praveen Swaminathan, Managing Director & CEO Mr. P.K. Suri, Director (Operations)

APPM PAPER IS EXPORTED TO:

1. AUSTRALIA
2. BENIN 3. BANGLADESH 4. EGYPT 5. GHANA 6. IRAN 7. KENYA 8. MALYSIA 9. MALDIVES 10. MYANMAR 11. MALTA 12.NEW ZELAND 13. NIGERIA 14. OMAN 15. SRI LANKA 16. SEYCHELLES 17. SINGAPORE 18. SUDAN 19. TANZANIA 20. UAE 21. UK 22. YEMAN 23. GERMANY

TYPES OF PAPER PRODUCTS:

Paper industry supplies various types of paperboard. Special paper to a number of end users which include Government Education, campus, packing, news papers, magazines etc

PRODUCT CLASSIFICATION OF INDIAN PAPER INDUSTRY

PAPER MACHINES CAPACITY SPEED (mpm) 180 220 85 140 410 560

1.ADITI 2.AVANTI 3.ANANYA

15 TPD 55 TPD 140 TPD

INDIAN PAPER INDUSTRY

Paper and paper board

Newspaper

STANDARD

GISSED

Cultural

Industrial

Board

Specialty

Writing

Printing

Wrapping

Packing

Cream move Azure laid Cream laid Bond

Map litho off set Photocopier Cover Color print Bond

Posts Tea Yellows Marla APSR Duplicate

Kraft Media Liner Sack raft

Straw Mill Grey Brown Duplex Triplex

Bond Micro Tissue Air mail Glassine Pulp