The Hindu Business Line : Sirpur Paper Mills embarks on expansion, modernisation drive

SIRPUR Paper Mills Ltd has embarked on a Rs 300-crore expansion-cum-modernisation programme to increase its annual production capacity from 83,550 tonnes to 1,33,550 tonnes.

The expansion project would be funded through a debt of Rs 165 crore, internal accruals of Rs 50 crore and an offer of preferential shares to the tune of Rs 70 crore. The project is likely to be completed by June 2006.

According to the Chairman, Mr R.K. Poddar, the debt funds will be syndicated by Infrastructure Leasing & Financial Services Ltd.

The project report has been prepared by SPB Projects and Consultancy Ltd, which will also provide complete technical consultancy and engineering services for the development of the mills.

Last fiscal, Sirpur Paper had posted a turnover of Rs 249.55 crore and a net profit of Rs 17.92 crore. The company's board has recommended a dividend of 50 per cent for the year.

The basic and diluted earnings per share of Rs 10 each for the year stood at Rs 21.49. The company's net profit last fiscal increased by 44 per cent when compared to the net profit of Rs 12.47 crore registered during the previous year.

Mr Poddar told newspersons that following the execution of the expansion project, the company's equity share capital would increase by about Rs 7 crore. Currently, the company has a paid-up equity of Rs 8.35 crore.

Of this, the promoters' hold was 43.3 per cent and the non-promoters' share was 56.7 per cent. Among the non-promoters, financial institutions have a share of 20 per cent, while the remaining 36.7 per cent was held by the public.

He said that the expansion-cum-modernisation project envisages improvement in product quality, reduction in cost of production and curtailment of pollution. For every tonne of paper produced, it was planned to reduce water consumption by 60 cubic meters, decrease energy consumption by 400 units and bring down bleaching chemical content by 50 per cent.

After the expansion, Mr Poddar said, the company would start manufacturing photocopy paper. It would also undertake direct exports.

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Sirpur Paper Mills embarks on expansion, modernisation drive