The Hindu Business Line : S.K. Bangur group revises mill expansion plans

THE S.K. Bangur group, which controls Rama Newsprint and Paper Ltd (RNPL) and West Coast Paper Mills Ltd (WCPML), has revised its brownfield expansion plan.

The group will now expand WCPML's capacity first instead of its earlier plan to expand the capacity of both the mills at the same time. It has finalised a Rs 820-crore investment plan to raise West Coast's annual capacity to 2,75,000 tonnes from 1,75,000 tonnes of white printing paper and duplex board. The investment will be made over the coming four years.

The group's Chairman, Mr S. K. Bangur, told Business Line that it was decided to proceed with the investment as the future of paper mills belonged to large, integrated and well-managed mills. Moreover, the tightening of the country's tax system would plug loopholes hitherto utilised by a certain sections of the paper industry.

VAT impact: The introduction of value-added tax from April 2005 had an impact on a number of manufacturers outside the tax system and translated into improved industry realisation by about Rs 400 per tonne.

Mr Bangur said the imposition of the Corporate Responsibility for Environment Protection (CREP) guidelines from 2008 could affect small manufacturers who find it difficult to mobilise resources for re-investment, creating a gap in paper availability and translating into higher realisations for the then existing manufacturers.

He said West Coast was better placed to protect and enhance value for its stakeholders despite the large investment.

Had the company not embarked on the fresh investment, its business would have begun to generate negative returns a decade from now.

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