India's Top 500 Companies 2016

India's Top 500 Companies 2016


Please give us a brief profile of your company and the businesses it is engaged in.

International Paper, a Global Paper and Packaging company, entered the Indian market through the acquisition of International Paper APPM Limited (formerly known as ? The Andhra Pradesh Paper Mills Limited) in 2011. IP APPM Limited is one of the biggest integrated paper and pulp manufacturers in India. The company produces writing, printing, copier and industrial grades of papers for foreign and domestic markets at its two manufacturing units in Andhra Pradesh which have a total paper production capacity of 240,000 metric tons per year. IP APPM Limited employs around 2,200 employees and is headquartered in Hyderabad, India. The company is becoming a driving force in sustainability in the paper manufacturing arena in the world economy with focus on social and community programs including its own pioneering work in raw material generation through social farm forestry and a very strong strategic growth focus.

Give us an overview of the Indian Paper & Packaging Market

There is continuous growth in the Indian market for paper and packaging across all grades including industrial packaging and tissues. The business environment in India is conducive and has growth potential. However, this growth has slowed down the last couple of years, especially in the segment of printing papers.

The deThe depreciation of the rupee brought about impact on fuel rates and items, the domestic fiber cost saw a substantial increase. The depreciating rupee has also impacted the imported recycled paper costs. The supplies have also increased due to capacity additions and increased imports.

The situation has been tough but the focus has been on making deliberate improvements, operational and manufacturing excellence, which is our focus at International Paper as well.

Can you share your view about the growth rate in different segments?

Cut-size will be the major growing grade in UFS. Currently, cut-size paper is evenly split between 70 & 75 GSM, with offices and government being top consumers. According to our estimates, cut size paper is witnessing demand and a growth of around 10-12%. The demand in the textbook segment has been slow whereas the notebook segment has seen reasonable growth. The industrial corrugated packaging will grow at around 7 - 8% and the uncoated free sheets will grow at 4 - 5%.

What are the unique differentiating factors that made it possible for company maneuver through challenging conditions?

Given the industry that we operate, there are challenges that we have in terms of sustainability. We consume a lot of natural resources and the main challenge is to operate in a way without depleting these resources and causing harm to the environment. And, for this, it is imperative to run the business with sound ethics and practices and maintain all the environment standards and norms.

What opportunities do you see for your sector in the next five years? How is your company planning to tap those opportunities?

The Indian market is one of the fastest-growing markets for paper and packaging in the world. India has 15% of the world’s population, but consumes less than 2% of the world’s paper. The Rapid economic growth, combined with advances in education infrastructure and the burgeoning middle-class will bolster the growth of paper consumption in India over the next several years. Therefore, for us there is an opportunity to optimize our existing operations. International Paper has a proven track record of global best practices in operational excellence, industrial safety and social responsibility. A key benefit of IP APPM is the scalability of its existing paper machines, access to raw materials, and physical infrastructure for capacity expansion. Our priority is to utilize our existing operations to fulfill the growing domestic demand.

The emerging trend is to be environmental friendly and aware along with taking on more social responsibility. How does your company plan to keep up with these trends? What possible impact do you see on your company?

Ever since the Sustainable Farm Forestry program was initiated by APPM in the year 1989, it has constantly reaped rewards both for famers and the company. In the past 27 years, the acceptance of quality seedling and clones by farmers has led to successful plantations in Andhra Pradesh. From 1989 to 2016, more than 1.5 billion seedlings and stumps have been distributed to over 54,000 beneficiaries extending over an area of more than 240,000 hectare.

Our sustainable farm forestry program helps ensure a stable supply of raw material for our paper manufacturing while helping to create jobs and improve the lives of many families throughout the region.

Our Farm Forestry program aims at increasing benefits to the landowner as well as maintaining forest integrity and environmental health. Our effort doesn’t end at distributing seedlings to the farmers but offers extended services like providing training to farmers on planting methods, harvesting, demonstration plots and trials and ensures that there is Life-Cycle support for the farmers. Our research and development projects have helped in ensuring higher survival percentage of seedlings, higher productivity per unit area and reduction in the rotation cycle.

Our contributions to the local society goes beyond improving incomes through developing faster growing trees and improving forestry practices, through our successful CSR program. We are constantly seeking opportunities to make a difference in communities in India through a number of development initiatives that are initiated in communities around IP’s manufacturing facilities. This is not limited only to the geographies under operation, but also in far-flung areas, through constant, well-monitored support towards education, environment and community engagement. IP India Foundation is continually refining its programs and seeking opportunities to make a difference in communities in India.

How has digitization and e-commerce supported your growth and expansion? How will it play a part in future growth endeavors?

Across the globe, printing paper business faces pressure with little or no growth in many geographies. The increase in digitization brings with a reduction in demand for traditional paper. Despite this, there is a demand and fundamental need for notebooks. Given this, Paper manufacturers across the world are choosing to reinvent and focus more in the packaging sector which is seeing growth across segments like - consumer packaging and industrial packaging.