We are pleased to report that Ruchira Papers posted profitable growth for 2015-16despite prevailing sectoral and economic challenges.
Our 2015-16 performance improvement was delivered at a time when the countryseconomy continued to be sluggish consumer sentiment weak and monsoonal impact sub-par forthe second successive year. Your Company reported a 4.62% growth in revenues and a higher51.73% increase in its bottomline validating the robustness of the business model.
Focusing on efficiency
Ruchira Papers has consistently outperformed its sectoral growth average because thecompany has selected to conduct business differently from most.
In a capital-intensive business we are singularly focused on one objective.
Generating more out of less. At Ruchira Papers our efficiency focus is not only aboutsweating manufacturing capacities at a high utilisation or enhancing the generation of endproducts out of a given quantity of resource. Efficiency is about being the best ineverything we do. Efficiency is about becoming the benchmark not following one.Efficiency is about a discipline so that deviations can be addressed almost in real-time.
Efficiency is not about managing the business incrementally better; it is abouttransforming the business. Efficiency is about managing the variable ecosystem with theobjective of generating a constant. The result is that the company grew revenuescompounded at 4.24% in the three years leading to 2015-16 and profit after tax by 8.41%during this period.
Our core DNA
At Ruchira Papers we have succeeded because we have proactively evolved ourpersonality.
From products to solutions. From volume to value-addition. From transactions torelationships. From the big picture to fine detail. From the one-off to sustainable. Fromremote management to hands-on control. From absorbing cost increases to reducing costs.
The companys promoters bring decades of industry understanding and experience tothe table; they are hands-on with a keen insight into opportunities and challenges acrossthe business eco-system whether on the operational side or marketing or finance or rawmaterial procurement or strategic decision-making. The fact that our office andmanufacturing facilities are in the same location has enhanced management responsivenessto fast-changing realities strengthening overall viability. The company has consciouslyfocused on controlled growth as opposed to the general sectoral preference for sizablyenhancing capacities in one go. The Companys growth has been consistentlyincremental and well within the capacity of the Balance Sheet to fund it. The result isthat the companys debt burden (and correspondingly interest cost) has beenright-sized with respect to the scale of the companys business. The Company is aresponsible manufacturer that made proactive investments in chemical recovery effluenttreatment and co-generation plants on the one hand and the consumption of renewableagro-based raw material on the other.
The result is that at Ruchira Papers we do not just claim to be a profitable business;we believe we have a model that is sustainable across market and economic cycles.
There is a latent optimism for the paper industry in India. The Government is wideningaccess to education for all through Right to Education and Sarva Shiksha Abhiyaninitiatives which will continue to drive literacy and paper demand. Besides theconsumption-driven growth of the economy will warrant larger quantities of packagingmaterial strengthening the offtake of kraft paper. The kraft segment will particularlyride e-commerce growth in India a trend that can only continue.
Given this growing demand and consequent need for enhancing production your Companycontinued to invest in advanced technologies on the one hand and production increase onthe other. During 2015-16 your Company implemented a Rs 38.69 cr productiondebottlenecking programme which will increase production from 99000 TPA to 116000 TPAhelp amortise fixed overheads efficiently and strengthen overall competitiveness.
The full benefits of this debottlenecking programme completed towards the close of2015-16 will translate into reality during the current financial year. Your Company alsocontinued to exercise a stronger control of the management of variables under its control.The result was a better utilization of resources and related efficiencies in theconsumption of power/ steam/fuel.
Your Company continued to emphasise the production of value-added products and relatedbrand building. The Writing & Printing paper manufactured from agro-based virgin pulpwas used in manufacturing note books as well as printing and publishing; a special gradeof paper was manufactured to address the growing demand for wedding and greeting cards aswell as colored scrap books drawing sheets and multipurpose varieties for commercial use.
Given these realities your management is optimistic of sustaining revenues marginsand profit growth across the foreseeable future. Your Company will continue to focus onholistic sustainability comprising the use of responsible raw resources investment inassets that enhance our environment commitment and sustain a Balance Sheet that generatesa superior return for all our shareholders.