The Hindu Business Line : JK Paper plans Rs 400-cr expansion

JK PAPER Ltd is following an expansion path. The company is investing a gross amount of Rs 400 crore into its offline blade coating plant and in the production of multi-layered packaging board.

While the offline blade coating plant would be funded through internal accruals, funds for the latter would be raised from the market.

The 46,000-tonne capacity expansion of the blade coating plant, which had been commissioned at its existing facility at Jaykaypur in Orissa, is costing Rs 180 crore.

The company has captured more than 20 per cent share of the coated art paper market in the last few months.

"We are looking to revamp our capacities and also hope to give a tough competition to the imports," Mr Harsh Pati Singhania, Managing Director, JK Paper Ltd, said.

The company's second venture into the multi-layer duplex board segment would require an investment of Rs 235 crore.

The plant that would make use of `contemporary technology' is being set up at its Central Pulp Mill, in Gujarat, with a capacity of 60,000 tonnes per annum. "Production would commence by the first quarter of 2007," Mr Singhania said. The project is being financed through debt and equity.

Mr Singhania believes that with the packaging board segment witnessing a growth rate of 12-15 per cent, there is tremendous potential fuelled by the growing demand from FMCG companies.

Though the company is currently meeting its pulp and paper requirement with its own plantations, Mr Singhania says he realises the need for policy modifications from the Government.

With regard to foreign players entering the Indian market, Mr Singhania felt that the complexity of taxation and other logistical issues may prove to be difficult for them.

The company's strategy, Mr Singhania added, would be to focus on high growth and value-added segments such as photocopier paper.

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