Banganga Paper Industries Limited (formerly known as Inertia Steel Limited) is one of the leading manufacturers and suppliers of a diverse range of Kraft papers. Its wholly owned subsidiary, Banganga Paper Mills, is strategically located in Dindori, Nasik, and operates a state-of-the-art manufacturing facility spanning over 10,000 square meters. With an impressive installed production capacity of over 100 metric tonnes per day, the facility specializes in various types of corrugated papers across multiple GSM ranges—ideal for paper bags, paper cones, boards, and corrugated boxes.

Mr. Chetan Dhatrak, Whole-Time Director of Banganga Paper Industries Limited (formerly known as Inertia Steel Limited), in this exclusive interview. A seasoned professional with deep expertise in the paper industry, Mr. Dhatrak plays a pivotal role in overseeing the company’s day-to-day operations, with a strong focus on production efficiency, supply chain management, and strategic growth initiatives.

1.How would you describe the positioning of Banganga Paper Industries in the craft paper market?

At Banganga, we’ve carved out a distinct identity as a premium, solution-focused manufacturer within the craft paper segment. We operate from our Nashik-based facility, producing tailor-made paper grades—ranging from single-layer variants to highly specialized double-layer grades. These papers are engineered to offer superior tensile strength, moisture and grease resistance, low odor, and even antimicrobial properties. What truly sets us apart is our commitment to R&D and customization. This enables us to meet the rigorous and diverse requirements of sectors like food, agriculture, and industrial packaging, where both performance and consistency are critical.

2. Which sectors form the core of your customer base, and what is your geographic footprint?

Our business is primarily driven by three key sectors. First, agriculture exports, where we provide high-quality corrugated boxes for fruits like grapes and mangoes. Second, the food and beverage segment, which includes specialty cartons for items such as sweets, frozen foods, and confectionery. And third, industrial spare parts, where our oil- and grease-resistant papers are used for heavy machinery packaging. In terms of geography, over 90% of our sales are concentrated in Western Maharashtra—particularly the Nashik to Mumbai corridor. This strategic positioning ensures close proximity to some of India’s largest demand centers for packaging solutions.

3. What kind of customer loyalty do you experience in your business?

Customer retention is one of our strongest indicators of success. Each year, approximately 80–90% of our orders come from returning clients. This level of repeat business speaks volumes about the trust our customers place in our consistent product quality, our efforts in continuously enhancing paper grades, and the bespoke solutions we offer that are tailored to the operational needs of various industries.

4. What’s your view on the medium-term demand outlook for craft paper in India?

The demand potential is very promising. Currently, India’s per capita paper consumption is around 6 kilograms, compared to China’s 136 kilograms. This significant gap represents a massive opportunity. When you also consider rising environmental concerns, increasing bans on plastic packaging, and government-led sustainability mandates, it’s clear that paper-based alternatives will experience a sharp rise in demand. From conventional corrugated boxes to newer applications like paper bags and bottles, we see this as a long-term growth trajectory, and Banganga is strategically positioned to capitalize on it.

5. How is the company preparing to tap into this expected growth?

We’ve devised a comprehensive, multi-pronged approach. Our R&D team is constantly refining paper grades, focusing particularly on moisture and grease resistance through parameters like Cobb values. On the sustainability front, we’ve implemented a Solar Power Purchase Agreement and installed an RDF-fired boiler with zero-liquid discharge to reduce our carbon footprint and lower energy costs. We’re also expanding our market presence by participating in industry events on emerging formats like paper bottles and bags and exploring adjacent markets such as fertilizer and drip irrigation packaging. To boost operational efficiency, we’ve installed a double-wire paper machine which enhances throughput while reducing operating costs.

6. What distinguishes Banganga from other players in the same industry?

We have several key differentiators. Our ability to produce double-layer paper ensures significantly better tensile strength. We also apply antimicrobial and odor-control treatments that keep food and export cartons fresh and odor-free for up to 90 days. On the energy front, we’ve embraced renewable sources—our solar PPA reduces power costs by roughly 10%, and our RDF boiler and turbine system contribute an additional 10% savings. These measures not only enhance performance but also provide cost leadership.

7. Could you elaborate on the cost savings from your renewable energy projects and when these benefits are expected to reflect financially?

The PPA has a minimum lock-in period of 15 years, with provisions for extension upon mutual agreement, it currently delivers about 10% savings on our grid electricity costs. Our RDF boiler and turbine generate on-site steam and power, resulting in another 10% reduction in energy expenses. We anticipate that the full impact of these cost efficiencies will start reflecting in our margins by Fiscal Year 2026.

8. What has been your total capital expenditure on these sustainability projects so far?

We’ve committed around ₹4.5 crore towards these green initiatives. This includes investments in RDF machinery, the installation of a steam turbine, and the infrastructure needed for the solar power setup.

9. How do you determine pricing for your B2B customers? Does the nature of the customer relationship influence pricing decisions?

Our pricing strategy begins with the regional benchmark for craft paper. From there, we apply adjustments of around ±10–20%, depending on factors like order volume, delivery location, and seasonality. While long-standing relationships contribute to customer loyalty and recurring business, our pricing mechanism remains fundamentally market-driven and unaffected by relational biases.

10. When do price changes typically happen in your segment, and what’s the process?

Price changes in the craft paper industry are generally ad hoc. They respond to fluctuations in raw material costs, seasonal demand patterns, and monsoon-related supply constraints. Typically, prices soften in the second quarter due to the monsoon and firm up during the festive seasons in Q3 and Q4. If there’s a reversal in input costs, the pricing adjusts accordingly. We stay alert to market signals and issue updates in real time.

11. Are you planning any major CapEx for the coming year, and do you believe your current capacity is sufficient to meet your goals?

Our near-term CapEx will focus on quality improvements and cost-reduction projects, particularly in solar energy, RDF, and process optimization. We do not foresee any need for large-scale capacity expansion at this point. The current throughput from our mill is more than adequate to meet our targeted revenue of ₹70–75 crore.

12. Can you describe your working capital cycle?

We typically offer around 30 days of credit to our dealer network. On the supply side, we maintain a 15–20 day inventory of raw materials. This cushion helps us manage potential disruptions, especially those arising during the monsoon season or from supply-side volatility.

13. What would you identify as the single biggest risk to your business, and how do you monitor it?

Overcapacity is the most significant risk we monitor. That said, given that India’s per-capita paper consumption is just 6 kilograms—compared to 136 kilograms in China—we believe the risk of saturation is minimal for at least the next 25 years. Nonetheless, we continuously track industry supply data to ensure we’re not caught off guard.

14. Since a significant portion of your raw material is imported, how do you manage price and currency fluctuation risks?

We source about 40–50% of our recycled paper from the U.S., with the remainder coming from domestic suppliers. We keep a close watch on global geopolitical developments—such as conflicts in Ukraine or instability in the Eurozone—that could influence freight rates, commodity prices, or currency values. Based on these factors, we actively adapt our procurement strategies and hedging mechanisms.