Financial Daily from THE HINDU group of publications
Wednesday, Oct 06, 2004
Financial Daily from THE HINDU group of publications Wednesday, Oct 06, 2004 |
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Corporate
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New Projects West Coast Paper, RNPL plan capacity expansion Our Bureau
Kolkata , Oct. 5 ENCOURAGED by the outlook of the domestic paper market, the Kolkata-based S.K. Bangur group has decided to expand production capacity of the group's two separate companies, namely, West Coast Paper Mills Ltd (WCPML) and Rama Newsprint & Papers Ltd (RNPL). Under the proposed expansion programme, each company will have a capacity addition of about 1,00,000 tonnes. At West Coast Paper, the capacity addition will involve writing and printing paper, while for Rama Newsprint it will involve the "swinging facility" to produce both writing & printing paper and newsprint. In both cases, the capacity creation will be based on wastepaper. The group has envisaged a total investment of about Rs 600 crore for undertaking the expansion programme. The required funds will be sourced through equity issue, loans from FIs and internal generation. Confirming this here, sources said that WCPML had recently completed the ongoing expansion programme at its Dandeli paper mill in Karnataka, at an investment of about Rs 230 crore. The mill is currently producing about 1,80,000 tonnes of writing and printing paper and duplex board per annum, out of which writing and printing paper contributes about 1,20,000 tonnes. The production from the mill is to be raised to 2,00,000 tonnes per annum in 2005-06 by way of balancing machinery. Though the Dandeli mill is 100 per cent wood-based, the proposed expansion of 1,00,000 tonnes, on the contrary, will be based on wastepaper. Similarly, the expansion of RNPL's newsprint manufacturing unit will be expanded, also by utilising wastepaper. In fact, this mill is currently producing about 1,25,000 tonnes of newsprint from wastepaper, and it is expected to produce about 1,50,000 tonnes of newsprint in 2005-06. WCPML last year acquired 33.85 per cent of the share capital of RNPL. WCPML also entered into a shareholders' agreement last year with private promoters (Ramashinghani group) of RNPL, who control 23.7 per cent . This means that WCPML enjoys voting rights of over 56 per cent of the total share in RNPL. It is pointed out that RNPL's debt is being restructured, and the restructured balance sheet, being prepared by ICICI Ltd, will be ready within this month, thereby facilitating the S.K. Bangur group to line up funds for the proposed expansion.
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