The Hindu Business Line : Orient Paper on expansion mode

The GP-CK Birla-owned company would be investing Rs 50 crore over the next 18 months to add capacity to its tissue paper unit. This would increase production to 32,000 tonnes from the current 12,000 tonnes per annum.

Furthermore, the company would also invest in cement and thermal power projects, for which it would be ploughing in roughly Rs 175 crore. The cement unit's capacity is to be enhanced from 2.4 million tonnes to 3 million tonnes. The 30-MW thermal plant, which is expected to come up in two-and-a-half years, would be located at Devapur, Andhra Pradesh alongside the present cement unit. Mr M.L. Pachisia, Managing Director, OPIL, said, "Most of the expenditure that we are incurring would be financed by internal accruals and loans."

Growth in fans: Besides paper and cement, OPIL manufactures fans under its flagship brand `Orient Fans' which, according to Mr Pachisia, registered 9 per cent growth in the first half of this year.

The fans division would also be expanded, and the company hopes to invest in resources to increase capacity from the existing 27 lakh to 35 lakh fans in a year's time.

The Rs 800-crore turnover company has been growing at 10-12 per cent, with the cement business logging 23 per cent last year.

While the scarcity of raw material has been affecting the company's margins, it is in talks with the Chhattisgarh Government for land for plantation. Mr Pachisia said the much-talked-about technology upgradation fund that the paper industry has been lobbying for, is more for reducing interest costs that the companies incur while borrowing for upgrading than monetary benefits.

Recently, the global investment bank, Goldman Sachs, picked up close to one per cent stake in the company. The company's financials were negatively impacted in the last few years because of its cement division, the profitability of which suffered due to an oversupply in the market. "With the changing scenario, investors find good value in investing in us," Mr Pachisia said.

He, however, added there is no change in the shareholding pattern.

The company has a market share of more than 14 per cent in the writing and printing segment and it exports to Africa and West Asia as also to Bangladesh, Sri Lanka and Nepal.

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