Can you provide an overview of Yash Pakka Limited's manufacturing unit and its operations?

Currently, through our key product offerings, we provide compostable base material for packaging and compostable tableware designed for dine-in and delivery purposes.

As Yash Pakka, we specialise in compostable solutions for the food industry including food packaging, food carry and food service. Our manufacturing process relies on bagasse, an agricultural residue derived from sugarcane, as the primary raw material. This raw material is procured from sugar companies within a radius of 200-250 km.

Some of our eco-friendly practices in the manufacturing process include 100 per cent self-generated biomass energy, recovery of 95 per cent cooking chemicals and being off grid as we are completely self-sustained for electricity.

To further demonstrate our dedication to eco-friendly practices, we employ several measures during the manufacturing process. Firstly, we generate 100 per cent of the required biomass energy internally, minimising our reliance on external energy sources. Additionally, we ensure the recovery of 95 per cent of the cooking chemicals used in our operations. Finally, our self-sustaining electricity infrastructure allows us to function independently from the grid, contributing to our overall off-grid status.

By implementing these initiatives, we strive to maintain a responsible and environmentally conscious approach to manufacturing compostable solutions for the food industry.

Since your manufacturing unit is fueled by rice husk, could you elaborate on the benefits and challenges associated with it? Also, how do you ensure a steady supply of this husk?

The calorific value of rice husk is high, and so it is the first preference for biofuel that we use in the plant. We ensure that all necessary tests are done before procurement of the material, and the most important test is moisture test. There are no inherent challenges with the material; however, there has been a supply crunch in the last year or so due to the changing global political landscape. Alternatively, we also use pith, although it has low calorific value and it also impacts the health of some types of boilers.

In general, there is no scarcity of rice husk in the region in which Yash Pakka is located due to the favorable conditions for the plantation of rice grain.

What kind of products will be manufactured at the new manufacturing unit in Guatemala, which you recently signed an MoU for? How does this expansion align with Pakka Limited's long-term goals?

The Guatemala plant of Yash Pakka will primarily focus on flexible packaging and moulded tableware. The expected capacity of the new plant is approximately 400 TPD.

Our primary vision revolves around a cleaner planet which will be achieved through scaling regenerative packaging solutions. This is a step in that direction. So far, we have been able to service primarily India, Middle East and Far East through our manufacturing facility in Ayodhya. Further, there are some customers in Europe as well. Through the facility in Guatemala, we aim to cater to the compostable packaging demands of North America.

What are the main products offered by Yash Pakka Limited in international markets? How do you adapt to meet the specific needs of customers in different countries?

We are one of the leading exporters of compostable bleached and unbleached kraft paper to the overseas market, making it our primary product line. Given our diverse customer base across different countries, we understand that their requirements can vary, particularly in terms of paper shade and properties. For instance, in Saudi Arabia, we provide a darker brown kraft paper specifically for bakery applications, whereas in Bahrain, we offer the same grade of paper with identical properties but in a golden shade, also for bakery purposes. This flexibility to cater to individual customer needs has positioned us as the preferred choice for foreign customers seeking compostable food packaging solutions. Additionally, we are committed to customising the paper properties to the extent possible without compromising its strength, ensuring we meet our customers' specific requirements.

What are the key target markets and industries that Pakka Limited serves with its compostable tableware? Are there any specific sectors where the demand is particularly high?

Yash Pakka's compostable tableware brand, Chuk, targets a wide range of clients, including prominent organisations such as PVR, Shri Mata Vaishno Devi Shrine Board, Haldiram's, and Tapri Jaipur. Our objective is to bring about a transformative change by offering an alternative to single-use plastic to any organisation that currently uses it. We firmly believe that true and impactful change can only be achieved by ensuring that no segment is left untouched, which is why we strive to make a significant impact on a large scale.

Thus far, we have observed a significant demand for Chuk tableware from Quick Service Restaurants (QSRs). The fast-paced nature of these establishments, coupled with high customer turnover, makes Chuk an ideal choice as it facilitates seamless operations. In terms of geographical acceptance, we have experienced a positive response, particularly in metropolitan areas, especially in Delhi-NCR. This can be attributed to the growing awareness among brands and end consumers regarding compostability and sustainability.

Can you elaborate on any certifications or recognitions that Pakka Limited has received for its environmentally friendly manufacturing process?

Yash Pakka has been consistently acknowledged and commended for its commitment to sustainable practices, receiving numerous awards, accolades, and certifications over the years.

In 2023, the company achieved the distinction of being listed among the Top 50 Workplaces in Manufacturing by Great Place to Work, which is a testament to Yash Pakka's unwavering work ethic and continuous efforts to enhance its manufacturing processes.

Additionally, Yash Pakka's dedication to water conservation was acknowledged through its recognition as a water-efficient unit in the esteemed CII National Awards for Excellence in Water Management 2022. The company's proactive approach towards energy conservation was also acknowledged by UPNEDA, as Yash Pakka was honoured with the Uttar Pradesh State Energy Conservation Award in December 2022.

Furthermore, our commitment to innovation and industry expertise was acknowledged by the United Nations Industrial Development Organization (UNIDO). The manufacturing facility located in Ayodhya was selected by UNIDO to conduct a workshop focused on reducing black liquor viscosity.

The company achieved a 40 per cent growth in Total Revenue, which rose from Rs 299.22 crore in FY 21- 22 to Rs 419.89 crore in FY 22-23. Were there any specific strategies or market conditions that favoured this growth?

The last 2 financial years have seen significant growth in top line for the company and a big reason for this is the paradigm shift of brands and customers to sustainability. A YoY revenue growth of more than 50 per cent in the last financial year and 40 per cent in this financial year shows that the efforts are being put in the right direction, and there is huge acceptance of compostable packaging in the market.

The last two years have seen our constant efforts to increase production while maintaining quality. The trust that has been built over decades, came to fruition as customers were drawn back immediately after the COVID-19 slowdown, which helped boost sales over the last year and the year prior.

How does Pakka Limited plan to sustain and further improve its financial performance in the future? Are there any specific areas or markets the company intends to focus on?

Pakka's expansion plans, which we have been emphasising recently, are aligned with our goal of enhancing performance in the near future. By working together, we can transform our collective vision of a cleaner planet into a reality through accessible compostable alternatives to single-use plastic.

With this objective in mind, we have entered into a Memorandum of Understanding (MoU) with sugar companies in Guatemala to secure raw materials. The development of a new plant will commence shortly, focusing primarily on the production of compostable flexible packaging and moulded tableware. Simultaneously, we are also expanding our existing facility in Ayodhya. This expansion involves the addition of a fourth paper machine and an increase in production capacity. Consequently, we will be able to offer niche specialty paper grades, a first-of-itskind in India, empowering our customers to meet their requirements domestically. Moreover, our power requirements are self-sustained, and we are in the process of installing a third power plant at our factory.

Furthermore, we are establishing a new laboratory in Bengaluru for our innovation team. This facility will facilitate significant advancements in the development of compostable packaging solutions for the food industry. Our commitment to progress spans various aspects, and we are determined to amplify the impact we can make over the next 2-3 years.