Sardhana Paper Mill has expanded its production capacity to 400 tonnes per day (TPD) with the commissioning of a new 250 TPD kraft paper machine, according to an industry report published in recent weeks. The new machine, designated PM-2, is now in operation alongside the mill’s existing PM-1 line, a 30-year-old unit with a capacity of 150 TPD.
The expansion reflects a long-term capacity bet by Sardhana Paper Mill’s management at a time when India’s kraft paper segment is navigating mixed demand conditions, with some mills reporting weak order books even as e-commerce and packaging-driven demand for kraft paper continues to grow in other pockets of the market. The mill’s decision to add substantial new capacity despite these mixed signals points to confidence in medium-term kraft paper demand growth tied to India’s expanding packaging and logistics sectors.
Why Is Sardhana Paper Mill Expanding Now?
Kraft paper, used primarily for packaging applications including corrugated boxes and industrial wrapping, has become one of the fastest-growing segments within India’s broader paper industry, propelled by e-commerce, food delivery and organised retail. By nearly tripling its installed capacity with the new PM-2 machine, Sardhana Paper Mill is positioning itself to capture a larger share of this packaging-driven demand, even as the older 150 TPD PM-1 line approaches the end of its typical operating lifespan. Industry commentary suggests the mill’s leadership sees the current period as a window to modernise capacity ahead of anticipated demand growth, rather than waiting for market conditions to fully stabilise.
What Does This Mean for the Broader Kraft Paper and Packaging Market?
Sardhana’s expansion comes as other regional players, including Western U.P. Kraft Paper Mills, have announced short-term production shutdowns amid weak demand and price pressure, highlighting an uneven recovery across India’s kraft paper segment. This divergence, some mills adding capacity while others pause production, illustrates the competitive pressure building within India’s fragmented kraft paper industry, where efficiency, machine age and cost structure increasingly separate mills that can expand from those forced to scale back. Analysts tracking the sector note that newer, larger machines like Sardhana’s PM-2 typically offer better energy efficiency and lower per-tonne production costs than older, smaller lines, reinforcing pressure on less modernised competitors.
Market Reaction and Industry Response
Industry publications covering the pulp and paper sector have framed Sardhana’s expansion as a case study in how mid-sized Indian paper mills are responding to structural shifts in demand, even amid short-term volatility in kraft paper pricing and order volumes. Competing mills and industry observers will be watching whether Sardhana’s bet on new capacity pays off through improved margins and market share, or whether near-term demand softness delays the expected returns on the investment.
What Happens Next?
With PM-2 now operational, Sardhana Paper Mill is expected to focus on ramping up utilisation rates and securing longer-term supply contracts with packaging converters and corrugated box manufacturers. The broader kraft paper segment will remain sensitive to swings in e-commerce and industrial packaging demand, as well as input cost trends affecting recycled fibre and virgin pulp prices, both of which will influence how quickly Sardhana and its competitors can translate added capacity into sustained profitability.
Frequently Asked Questions
What capacity has Sardhana Paper Mill added?
Sardhana Paper Mill commissioned a new 250 TPD kraft paper machine, PM-2, bringing its total installed capacity to 400 TPD alongside its existing 150 TPD PM-1 line.
Why is kraft paper capacity expansion significant in India right now?
Kraft paper demand is growing due to e-commerce and packaging-driven consumption, even as some regional mills face weak order books, making capacity and efficiency key competitive factors.
How does Sardhana’s expansion compare to other kraft paper mills in India?
While Sardhana added significant new capacity, some competitors like Western U.P. Kraft Paper Mills have announced shutdowns amid weak demand, reflecting an uneven recovery across India’s kraft paper segment.
Leave a comment