Satia Industries Limited (SIL), is one of the largest Agro and Wood based paper manufacturers in India. SIL was incorporated by Dr. Ajay Satia in 1980 and commenced its operations in 1984 with a small capacity of 4,850 tonne per year to 255,500 MTPA by the end of FY22.
The company is mainly into paper and packaging products, recently they forayed into producing food packaging products; working in collaboration with American company Zume.
(Zume is also selling on Amazon India )
Product Portfolio : Snow white , Super Snow white, Ultra White, Ultra Print, Coloured Paper, Cover Paper, Photo Copier, Ledger, Ultra Shine, Natural Shades, Paper Cups, Food Packaging Products & Wood based cutlery
The picture says it all, along with traditional paper products they are venturing into products that are catering to food industry, products that replace single use plastic items like plastic bag, coffee cups , cup lids , takeaway food containers that are produced by using biomass. This is the future growth lever for SIL.
Here is the latest statement from the company
SIL has entered in a formal association with Zume, a US-based global brand in sourcing of packaging products used for meal boxes, beverages and Face Masks, etc
Current Paper Industry Structure in India / World
Capital Intensive Business
All these days industry is struggling due to cheap paper / pulp imports from China and ASAN. Now China banned waste import into the country hence the cost of pulp production has become expensive. At the same time many European countries are now using their waste for captive consumption.
There is huge push by the governments in the western world on the business to use more recycled material. On 1 January 2021, the European Union introduced a levy on non-recycled plastic packaging waste. The levy will be charged to EU Member States at €800 per tonne with revenue generated contributing towards post-pandemic recovery.
Here are the latest M&A in Europe to push more into Circular Economy.
India’s central government announced the ban in August this year, following its 2019 resolution to address plastic pollution in the country. The ban on most single-use plastics will take effect from July 1, 2022
India - Industry is a fragmented market, less than 10% is with the branded players.
GST and Pandemic hit very hard the fragmented market. Many small players to survive hence the share is now going towards organized players.
Many PSUs are also shutdown. (Two recently in Assam). There are many shutdown / stopped production due to shortage of coal or high coal prices.
Satia Key Strengths
Technical Collaborations with Zume USA (Who are supplying technical know how on biomass based paper pulp - food packaging products )
Capacities / Order Book
Total Installed Capacity as of today - 255,000 ( 700 Tons a Day , this includes a new capacity PM4 that has come online on 7th Feb 22 with 1 Lakh Ton Per Annum, this capacity is fully booked for the month of February )
Started commercial production from cutlery machine having an installed capacity of 5 metric
ton per day. (Waiting for the approvals for the concerned authorities , might be Zume’s requirements)
Technology / Plant Capabilities
Installed DD Washer ( DD-Washer - Made in Finland (Finnish with English subtitles) - YouTube )
• Multiple washing stages on a single drum
• Compact design • Extremely high washing effi ciency
• Extremely energy effi cient
• Fractionated fi ltrates to conserve water
• Retains fi ber qualities: less fi ber damage when no mechanical pressing
• Fast start-up and high availability
• Production throughput up to 6,250 t/d in a single unit
Process Efficiencies achieved due to this : Due to this multiple stages are combined into one, that releases space occupied by two steps “ the wood line bleaching “ and washing that has been emptied. This space is now used to produced additional 50-100 ton pulp.
Biomass based Boiler ( Link Introduction to Biomass Boilers - Energy Saving Guides - YouTube )
Rice straw is used as biomass for this boiler (earlier Husk is used which has now become expensive at 7,000 rupees per ton , now along with Husk Setia is using Rice Straw, which is burned by farmers , the coast of this is 2,000 rupees per ton ) , planning to setup two more boilers next year
Allimand Paper Machine (Best in Class )
The below technology is used by other companies like west coat papers (Satia can explore this as well )
Related Links in VP Forum
Earnings Projection based on Q3 Commentary
Image Courtesy @rajanprabu
I will add some more findings shortly
Thanks to @harsh.beria93 for sharing lot of industry data and research reports.
Disclosure : Purpose of this post is to learn about the industry, I don’t have any positions in any of the paper companies including Satia