The Hindu Business Line : ITC plans Rs 2,500-cr greenfield paper mill — To diversify into printing, writing paper biz

ITC Ltd plans to set up a greenfield 2-lakh per annum integrated ECF (elemental chlorine-free) pulp and paper mill in Madhya Pradesh, with backward fibre linkages through social and farm forestry.

The company has a paperboards and speciality papers division at Bhadrachalam in Andhra Pradesh.

While the mill is expected to directly employ around 2,000 people, some three lakh jobs are likely to be created indirectly through the plantations route.

The proposed investment on the mill will be around Rs 2,500 crore over five years. This can be viewed as a major diversification by the company into the mainstream paper business of printing and writing paper.

The company has commissioned Jakko Poyry of Finland, a leading paper technology consultant , to conduct a detailed feasibility study of the project. Talking to Business Line here, Mr R. Srinivasan, member of the company's Corporate Management Committee, said the study is expected to be ready within the next two-three months, and things will become clearer around June.

He said the company has been scouting for suitable locations, both in Maharashtra and Madhya Pradesh. Though no final decision has been taken on the location as yet, it is likely to be at Madhya Pradesh. At least 100 hectares of forestland will be required for the project, of which the plantations may occupy nearly 75,000 ha.

"We will work out a co-operative agreement with the farming community to develop the land, and ensure farm productivity and sustainable development," he said. "We are in the process of talking to the CMs of these two States."

Mr Srinivasan said the principal criterion would be availability of a large forest area around the mill site, as fibre resource development, just as it is in Bhadrachalam. It has to be in tune with the mills' requirement through the route of high-yielding quality pulpwood plantations on a sustainable basis.

ITC, which has effectively leveraged its need for wood fibre through the social and farm forestry project at Bhadrachalam (clonal plantations), would like to replicate the successful model for the greenfield paper project.

Mr Srinivasan said the in-house R&D had successfully led to the clonal propogation project at Bhadrachalam, which was at the heart of the company's fibre strategy. "We have not only created a sustainable source of high quality raw materials, but also generated significant employment in the vicinity of the ITC's paperboards operations."

He said modern technology and adoption of the ECF pulp route, coupled with installation of hi-tech pollution control equipment, would not only drastically reduce the per tonne water consumption for the paper plant, but also ensure toxic-free discharge, as prescribed under the Kyoto Protocol.

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