State Of The Economy 2017

Times Are Changing

Despite a turbulent year at work, businesses at Erode believe the worst is over

RA Chandroo


Shri Pariyur Amman Kraft Papers, based at the SIPCOT industrial park near Gobichettipalayam, is more than 30 km away from Erode. “If you ask why I started my mill here, I would say simply because this is my native land, so it’s convenient for me,” smiles KM Shanmugaperumal, the founder and MD of the Rs.25 crore company.

Shanmugaperumal started as a corrugated box manufacturing five years ago. An electronics engineer with an MBA degree, Shanmugaperumal learnt to adapt quickly. “Three years back, I was running the entire factory on UPS. In fact, I was the only one to run a paper mill on a battery,” he laughs. But then he had no choice. Those were the days when 10-12 power cuts in a day was the norm. “Half hour of power cut meant one-and-half-hour of production lost. But with UPS, the unit was running 24x7 without any such breaks. It was a risk, but it became a huge success,” says Shanmugaperumal, adding that he hasn’t disposed the UPS yet although he is not using it now.

But there were bigger challenges than power outages to deal with. Realising that corrugated boxes alone might not be able to fetch a decent margin, he, literally, thought out of the box. After two years of research involving an investment of around Rs.20 lakh, Shanmugaperumal has now come up with a kraft paper that can be a substitute for copier papers. “We will be launching our own brand of notebooks, scribblers, calendars, invoices and others in kraft paper. Once the retail business starts, our margins should improve by 20-30%,” he says.

While 95% of the company’s revenue still comes from corrugated boxes, Shanmugaperumal believes increasing contribution of retail business will be a game-changer. “Copier paper is usually made from fine wood and uses up a lot of water,” he points to my notepad. “Why not think of an alternative? Why go white when we can go green? For finer details, we need white, but for others it’s not a must. What we are doing here involves zero water discharge and recycling of 100% old waste paper. If I can sell 50 tonne on a monthly basis, I can save about 20 lakh litres of water and 100 tonne of wood,” Shanmugaperumal drives home his point. The company is al


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