Rationale behind buying Satia Industries :
Excellent Management
One of the lowest cost producer
New capacity coming on stream soon
Fundamentals improving etc.
Highly backward integrated
Paper production consume lots of water, many paper companies can’t grow due to availability of limited water resources, Satia has no such issue.
Many paper industries facing raw material availability issues, Satia has already secured raw material and located where abundant raw material available.
They have own Pulp making plant
Paper industry require huge power, Satia has own power plant which produces 100% of their requirement,
They use wheat straw & husk as fuel, which is easily available and cheap, it is considered as green energy, they also get benefit by issuing green energy certificates.
They have chemical recovery plant where they recover black liquor and recover soda ash and reuse it.
Paper industry is considered as very polluting industry, Satia has gone for eucalyptus plantations coverage of 540 acres of land, where they employ some kind kerala pattern, Where entire effluent is utilized and not released to river or canal, its huge advantage over competitors.
Recently they tied up with Zume for patented cutlery manufacturing, which is a new high margin growth avenue on the horizon.
Available at discount to intrinsic valuation, capacity getting doubled soon.