The Hindu Business Line : HPC to retain freight equalisation scheme

HINDUSTAN Paper Corporation (HPC) has decided to maintain its existing marketing policy to ensure uniform prices of all of varieties paper it produced, throughout the country. This indicates that the freight equalisation scheme now being followed by the company on its paper of all destinations will remain unchanged.

HPC operates two large integrated pulp and paper mills in Assam at Cachar and Naogaon, each with an installed capacity of 1,00,000 tonnes of writing and printing paper per annum, while its wholly-owned subsidiary, Hindustan Newsprint Ltd (HNL) in Kerala has equal capacity to produce newsprint.

Although HPC's main mills are located in the eastern region, it has still to follow the freight equalisation scheme because of restricted demand for paper and paperboards in the region. In fact, about 60 per cent of the total production from its two mills in Assam are sold in the northern region.

However, HPC has concluded an MoU with the Union Government for the year 2004-05, setting out ambitious targets for enhancing volume of production to the level of 3,30,00 tonnes from two mills in Assam and HNL as against about 3,17,780 tonnes of production recorded in the year 2003-04. Of the total production in the fiscal under review, writing and printing paper covered about 2,04367 tonnes, while the balance was of newsprint.

As stated by Mr Raji Philip, Chairman of HPC, the corporation had firmed up a Rs250-crore investment plan for modernisation and upgradation of technology in all the mills. This apart, a separate investment proposal amounting to Rs.150 crore had been submitted to the Union ministry of heavy industries for its approval so that HPC could undertake its capacity expansion programme for writing and printing paper.

Mr. Philip said that as per the MoU, HPC's Naogaon mill was to achieve production of 1,15,000 tonnes and a turnover of about Rs 387 crore in 20004-05, while the Cachar mill was to achieve 1,00,000 tonnes and turnover of about Rs 342 crore. HNL would enhance production to the level of 1,15,000 with an anticipated turnover of about Rs 270 crore as against production of about 1,12,500 tonnes and a turnover of about Rs 252 crore in 2003-04.

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