Rahul Kumar (RK): In an industry where paper is the biggest cost, it makes sense that companies would want to track its use, or more specifically, its waste factor. How do you do it at your plant? Alok Kumar Gupta (AKG): Companies are not concerned about the wastage of paper. They factor a fixed percentage of waste in paper to corrugation and set wastage from corrugated blank to corrugated box in form-defined trim margins for processing from blank to box. RK: The wastage at an average corrugation plant in India is as high as 14-15%. And one realises that one of the major causes of higher wastage is the poor quality of kraft paper available to Indian corrugators. Why is that? AKG: Poor quality of kraft paper is not responsible for 14-15% wastage. Wastage transpires due to multiple factors. One, the transformation of paper to a corrugated board. This wastage is around 2.5-5%. Good paper, good machines, and a good operator can ensure it is less than 3%. The bad paper will add a maximum of 2% wastage. Second, once the blank is prepared, converting the box will add to 5-6% waste in the form of trim and slot waste. In case there’s die-cutting, the additional wastage will be around 3-5%. Some companies in their calculation try to account for the second and third waste. RK: What are the other potential areas of loss at your plant: automatic plant vis-a-vis semi-automatic plant? AKG: Potential loss arises from mills using core pipes of very high weight. They bill this weight as paper cost. Also, poor winding of rolls leads to about 0.5 to 0.75% waste in handling. Poor process control can lead to waste due to delamination of the board, improper printing, and shoddy material handling. RK: For some paper mills, running a corrugator at 300-m/min, probably the fastest in the country, would mean a new set of challenges for controlling wastage. What are these, and what measures have you taken to minimise the wastage? AKG: High-speed machines come with complete automation, right from roll handling to temperature control. So, its waste is significantly less. RK: Expertise in the corrugation industry is underrated. How much wastage is caused because of an untrained operator?   AKG: The untrained operation causes lots of waste. However, paper is not only part of the wastage. There are other wastes such as adhesive used in excess, steam used in excess, and also ink and energy costs. RK: One feedback our team has been hearing is, paper cracking is a major challenge, as paper mills have increased the use of starch in paper to increase burst factor and ring crush values. How do you address this issue? AKG: Earlier, not knowing the weight ratio of the liner to medium meant that they used heavy gsm in fluting. This led to cracking issues. Now, they have learned the art of balancing gsm and moisture to solve this problem. To some extent, paper mills using excess quantities of starch is also a reason. RK: What sort of yields should a corrugator target while creating an operating model? In terms of a profitability tree, are the existing models sustainable? AKG: The existing model is sustainable, with the debt-to-equity ratio being small and limiting investment to less than Rs 25-crore. RK: With fluctuating kraft paper prices and corrugators operating on wafer-thin margins, efficiency becomes paramount, and one wonders if an average Indian corrugator is aware of his operating costs? Do you capture your production costs? How? AKG: The average corrugator is aware of the cost. Everyone captures the production in terms of cost per kg. Also, they have strong networking and share, learn from each other.

RK: How does one explain the investment and new projects in the corrugated box industry in the past two years? Has the business environment improved? AKG: Due to the shifting of customers to automatic plant boxes and considering that there has been consistent growth in double digits of volume, there is a lot of scope for new plants for packaging. Yes, the business environment has improved a lot. RK: With automated corrugation lines and high-end finishing machines, the quality and performance of the box improve, leading to optimisation of specifications and light-weighting. Does that mean the overall market will shrink? AKG: No, the market will not shrink. The new volumes are evolving. One of the areas where there will be large growth in the requirements of boxes is in the packing of fresh fruits and vegetables and processed foods. This completely new segment is growing at a fast pace. RK: What are the new possibilities for printing on the brown surfaces? AKG: Brown boxes volume will go up. ECommerce companies such as Amazon and Flipkart are using single-colour brown boxes. RK: Your inputs on price hike of raw materials. AKG: It is difficult to predict the current price hike scenario, as there are so many factors, such as availability of raw material to paper mills at a higher cost, higher energy cost, higher container, and local freight cost, and then demand from overseas and China (also, due to the upcoming Olympics in China, the country is trying to control pollution and restricting units in China, resulting in demands taking a U-turn towards India). All factors result in a price hike.

A brief history of the organisation. I started my first corrugation plant in 1990 at New Delhi by the name Carton Manufacturing. Later, I opened a second unit at Noida called Alok Udyog. What is the present scenario of the company? Our two units serve automobiles, garments, sports accessories, and electric industry customers. We manufacture medium-level products. Please share a list of machines you have. We have a semi-automatic set-up for corrugation with sheeter, pasting, rotary, slotter, die-cutting, stitching machines, and more. What is your expansion/future plan? Invest in machines similar to what we have to increase production.

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