The Hindu Business Line : HPC employees hail Alliance's decision on divestment

EMPLOYEES at the head office of the State-owned Hindustan Paper Corporation (HPC) are happy with the in-principle decision of the new United Progressive Alliance (UPA) at the Centre not to sell the Government's equity holding in profit-making public sector undertakings.

They feel that equity shares in HPC and its wholly-owned subsidiary, Hindustan Newsprint Ltd (HNL), will not be divested since both companies have been making profits.

The outgoing National Democratic Alliance (NDA) Government had decided to sell 74 per cent of the Government's total share in HPC and HNL and subsequently received expression of interests (EoIs) from private investors.

The EoIs had been under scrutiny and it was decided by the Disinvestment Committee, exclusively constituted for HPC and HNL, that the financial bids would be asked from selected parties after the election.

Things have changed for HPC and HNL with the new UPA Government in-the-making clarifying that it was not going to disinvest the Government's shares in profit-making PSUs. It may be noted that HPC during the 2003-04 fiscal under review earned a profit of about Rs 42 crore on a turnover of about Rs 632 crore, while HNL posted a net profit of about Rs 9 crore on a turnover of about Rs 253 crore.

Profitability in both companies is expected to improve in the current fiscal because of buoyant market condition for writing and printing paper as well for newsprint.

HPC with its two mills in Assam at Cachar and Naogaon, each with a production capacity of 1,00,000 tonnes per annum expects to augment total production of writing and printing paper at least by 15,000 tonnes to 2,15,000 tonnes in 2004-05, while HNL has targeted to produce more, at least by 3,000 to 1,15,000 tonnes, of newsprint in the current fiscal.

Judged by the mood of the new Government, the management of HPC is understood to have started examining fresh investment proposals for its mills in Assam and also at HNL in Kerala. However, the investment plans are in addition to the company's recently approved Rs 250-crore brown-field expansion through upgradation of production technology at its existing facilities in Assam mills.

More Stories on : Policy | Disinvestment | Paper | rd & Newsprint

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