About Three M Paper Boards Limited

Three M Paper Boards Limited is engaged in the business of manufacturing recycled paper-based Duplex Board products used in various packaging applications across industries such as food and beverage, pharmaceuticals, cosmetics, and consumer goods and supplies its high-quality duplex board paper products in both the domestic and international markets. Their products are made out of 100 percent recycled waste paper and are completely biodegradable. The company sets out to undertake various innovations in both the product-development side as well as in manufacturing processes on a consistent basis. The company is headquartered in Mumbai, with its manufacturing facility located in Chiplun, Dist. Ratnagiri, Maharashtra. Equipped with state-of-the-art machines and ultra-modern technologies in its manufacturing facility, the company had a total manufacturing capacity of 72,000 TPA paper at the close of FY 2023–24.

Considering the present per capita paper consumption in India, the company sees a sea of opportunity lying ahead. With the growing importance of e-commerce businesses, rising literacy rates, and growing FMCG, packaged food, and stationery industries, the days ahead for the Indian paper industry are expected to be phenomenal, as the Indian paper industry is likely to outpace the global industry in terms of growth. Despite increasing digitization, the Indian paper industry is expected to clock double-digit growth over the next five years. Moreover, there are significant changes in the policies for Chinese raw material imports, which have restricted their own production and curtailed their imports of some of the waste paper varieties, which has had a positive impact on the Indian waste paper-consuming mills. Looking at all these factors, the company is quite bullish about the paper industry for the coming years.

TMPBL took the decision to fast track the above-mentioned transition by setting up of a new 400 TPD Duplex Machine. The rationale behind setting up another Duplex Board plant is increasing demand of the product coupled with TMPBL’s expertise in this segment. The project is expected to cost INR 400 Cr and shall be funded by way of debt, internal accruals and by Equity Participation.

INDIAN PAPER INDUSTRY
The Paper Industry holds a significant historical presence in India, evolving since the establishment of the first mill in the country. Over time, there has been a substantial increase in the number of paper mills, particularly in recent years, leading to a notable rise in both the quantity of mills and overall production volume.
 The Indian paper industry plays a noteworthy role on the global stage, contributing approximately 5% to the world's paper production. The industry's economic impact is substantial, with an estimated turnover exceeding INR 80,000 crore, contributing to approximately INR 5,000 crore to the national exchequer. In terms of employment, the industry directly engages 500,000 individuals and indirectly supports an additional 1.5 million jobs. 

Most of the paper mills comprise of diverse technological landscape, ranging from the oldest to the most modern technologies. These mills utilize various raw materials, including wood, bamboo, recycled fibre, bagasse, wheat straw, and rice husk. The production shares indicate that approximately 21% are based on wood, 71% on recycled fibre, and 8% on agro residues. 
According to industry sources, the paper & pulp industry has an annual turnover of INR 700 billion, with an estimated 861 paper mills, of which 526 are operational. The collective installed capacity stands at an impressive 30.73 million tonnes, portraying the industry's robust and expansive presence. 
The Indian paper industry is highly fragmented. It encompasses small, medium, and large paper mills, each operating with production capacities ranging from 5 to 2000 tonnes per day. Despite contributing 5% to the world's paper production, per capita paper consumption in India remains low, standing at 15 kg. This figure falls far below the global average of 57 kg, indicating potential avenues for growth and increased consumption. 

India's position as the fastest-growing market for paper globally presents an intriguing opportunity. As the nation's economy experiences growth, paper consumption is expected to witness a substantial leap forward. The anticipated trajectory suggests that the growth in paper consumption will be in multiples of GDP. In practical terms, an increase in consumption by one kg per capita would correspondingly result in a demand surge of 1 million tonnes. This projection brings out the industry's alignment with economic trends, presenting a promising scenario for future expansion and development.

The roots of the Indian Paper Industry date back to 1812 when the inaugural paper mill was established in Behranpur. Since its inception, the industry has experienced significant growth, expanding both in terms off scale and scope. Currently, it ranks among the top 15 major paper producers globally.

In FY 2023, boasting an annual capacity of 30.73 million Tonnes Per Annum (TTPA), India successfully manufactured 23.67 million tonnes of paper and paperboard. This translates to approximately 88% of the capacity utilisation by the industry.

Although initially reliant on softwood and other grasses, the Indian paper industry has evolved significantly due to technical innovations. Over time, these advancements have empowered the industry to process a diverse range of raw materials. The industry’s raw material usage can be categorized into three segments: wood-based, agro-based (including biogases, wheat straw, rice straw, sarkanda, jute, grasses, etc.), and recycled fiber or wastepaper-based.

Today, a significant 75% of the total production of paper and paperboard is derived from wastepaper or recycled paper sources. Wood and bamboo collectively account for approximately 18% of the share, emphasizing their continued contribution. Additionally, agro-based raw materials, including bagasse, wheat, and straw, contribute to 7% of the overall volume in the production of paper and paperboard.

Indian Packaging Paper Industry and Duplex Board
Packaging plays a vital role in product presentation, acting as an attention-grabber in today's competitive market. It serves as a means to convey a product's message, establish brand visual appeal, and capitalize on impulse shopping behaviours. Besides marketing, packaging serves functions such as information transmission, product protection, convenience, and security. Paper, recognized for its environmental benefits over plastic, is extensively used in packaging due to its recyclability and ease of disposal. 
The packaging industry is categorized into two segments: rigid and flexible. The rigid sector, constituting 36% of India's packaging, employs paper in the production of corrugated and paperboard boxes. These boxes, known for their strength and resilience, are used for various commodities, ensuring quality and longevity. On the other hand, the flexible sector, representing 64%, utilizes paper in the form of bags, sachets, and envelopes. Flexible paper packaging, cost-effective and lightweight, has gained popularity for its efficiency, making it essential in versatile packaging for food, beverages, personal care, and healthcare. 
The Indian paper and packaging industry are experiencing robust growth, poised for significant expansion in the coming years. Valued at USD 50.5 billion in 2019, the industry is projected to reach USD 204.81 billion by 2025, demonstrating an impressive CAGR of 26.28% from 2020 to 2025. This remarkable growth is attributed to several factors, including the flourishing e-commerce, food processing, pharmaceuticals, FMCG, manufacturing, and healthcare sectors.

THREE M PAPER BOARDS LIMITED STRENGTHS
1. Diversified product portfolio
2. Consistence financial performance
3. Import of Raw material & Export of finished goods
4. Network of Dealers and Customers
5. Network of Raw Material Suppliers
6. Local markets such as Mumbai, Goa, and Pune, nearby the plant, have a freight advantage, while the plant's proximity to a port provides another freight advantage

THREE M PAPER BOARDS LIMITED STRATEGIES
1. Product Diversification
2. Innovation
3. Plan to use waste generated
4. Sustainability Initiatives
5. Customer Focus
6. Strategic Partnerships
7. Market Expansion
8. Marketing

THREE M PAPER BOARDS LIMITED RISK FACTORS & CONCERNS
1. Their historical revenues have been significantly dependent on few customers.
2. The Company is yet to place orders for 86% of its plant & machinery for their proposed object, as specified in the Objects of the Issue.
3. They generate their major portion of sales from their operations in certain geographical regions especially Maharashtra, Karnataka, Goa and Delhi and internationally also.
4. They are mainly dependent on imports for supply of their major raw material; i.e., waste paper.
5. The shortage or non-availability of power and water facilities may adversely affect their coated duplex paper boards manufacturing process.