In 1985, Khanna Paper opened for business as a family-owned paper mill in India. The company was founded by B.M. Khanna. His sons Rahul and Saurabh joined the business in the 1990s.
“I was born into this business,” Saurabh says. “Being born into a business just happens, right? You choose to champion whatever you do.”
The India-based business always has focused on using recovered fiber in its product mix. Joe Passalacqua, commodity manager for Khanna Paper, says the company is one of the largest importers of recovered paper in India.
Khanna Paper’s mill is based in Amritsar, Punjab, and, according to the company’s website, the mill covers 80 acres, making it the largest single-location plant in India that consumes recovered paper.
Currently, Saurabh says the mill consumes about 600,000 metric tons of recovered paper annually. The mill includes four paper machines, deinking plants and an in-house captive power plant. Khanna Paper employs about 2,200 people, including contract workers, in India, and has three mill buyers based in the U.S. at its subsidiary, Khanna Paper Inc.
Saurabh describes Khanna Paper as “a high-energy” company that has many employees who are passionate about the recycling industry.
He says, “All of our team members are very committed, and we work together like family.”
Planning to grow
Passalacqua describes Khanna Paper as a growing business. He says the company currently imports about 30,000 tons of recovered paper per month to make packaging board, newsprint and printing and writing paper. Khanna Paper primarily sells those products in India, but Passalacqua adds that the company has its eyes set on expanding to additional markets.
Among the recovered paper grades it consumes, Khanna Paper focuses on mixed paper and sorted office paper (SOP), as well as coated book stock and sorted residential news, Passalacqua says. He says the company is “very big on SOP” and is “one of the largest consumers of SOP in the country.”
“SOP and high grades, all the mills are asking for it,” he says of India’s paper mills, adding that it seems like India’s economy is opening up more since the pandemic started. “We’ll be making more copy paper as [Indian] schools might be going back.”
Passalacqua adds that Khanna Paper uses some virgin pulp, too.
“We take about 1,500 tons a month for virgin pulp also, and we use that for brightness—copy paper needs a different kind of brightness,” he explains.
The recovered paper Khanna Paper consumes comes from the U.S. and India. Saurabh says the company sources between 60 and 70 percent of its recovered paper from the U.S., with the balance coming from India.
In addition to running a paper mill, Khanna Paper started a trading business in September 2018 that helps to supply other Indian paper mills. The trading arm of Khanna Paper began just months after China’s National Sword Policy went into effect. Saurabh explains that it was “good timing” to start that division—with China cutting back on recovered paper imports, Indian mills were increasing their orders of this material.
“We were always getting calls,” he says. “We have good connections in India, and we have so many contacts in the U.S. They wanted to increase business with us. [Adding the trading business] was just a good fit.”
Since 2018, Saurabh says the trading business has experienced significant growth. “We had 50 containers per month when we started, and now we have more than 1,000 containers per month,” he says of that division. “We have had year-over-year growth, and we have had to hire some people because of that in 2019.”
Navigating a tough year
At the start of the year, Passalacqua says Khanna Paper had a hearty appetite to consume SOP in part because India’s economy was reopening since it closed down at the onset of the COVID-19 pandemic.
But one challenge Khanna Paper has been working through, along with many other exporters and importers of recovered fiber, is ocean shipping backlogs. Passalacqua says he has noticed “packed” piers this year as well as rolled bookings and vessels not coming in.
Saurabh says securing freight has been “unpredictable” in 2021. He adds that the company has been fortunate that it has been able to get most of its bookings.
“We are lucky,” he says. “We have been able to get good bookings. But even if you have a good booking, shipping lines sometimes announce changes. It seems every week has different challenges.”
As of mid-January, Passalacqua also says India’s economy is “stronger” than it was in most of 2020.
He adds that the nation, in general, has been industrializing and growing its economy in recent years.
Saurabh says the initial onset of the COVID-19 pandemic was “tough” for business. “We had to shut down our machines last year and demand was poor. It was not easy, but it was good for learning,” Saurabh says of the pandemic.
He says market conditions seemed to normalize somewhat at the start of 2021; however, as of mid-April, COVID-19 cases were rising in India, which has caused some businesses to again shut down.
Although these rising COVID-19 cases could adversely affect India’s economy this year, The Economic Times reports in mid-March that it expects India’s economy to grow by 12 percent this year following a 7.1 percent contraction in 2020.
As businesses reopen from COVID-19-related shutdowns, Passalacqua says he anticipates demand for Khanna Paper’s products, such as copy paper and board, to rise.
Saurabh adds that his current goals are to grow Khanna Paper’s trading business and increase production of the paper manufacturing business.
He is hopeful that Khanna Paper also will outgrow its mill and need to relocate to a larger site closer to the port in three to five years.