The Hindu Business Line : Paper industry to pump in $2.5 b for hiking capacity

Expansion plans
Ballarpur Industries to invest Rs 600 crore to hike manufacturing capacity.
Andhra Pradesh Paper Mills will invest Rs 600 crore to raise its pulp capacity
Seshasayee Paper and Boards plans to pump in Rs 350 crore for capacity expansion.

Suresh P. Iyengar

Mumbai, Nov. 3 The paper industry is set to see an investment of $2.5 billion in the next two to three years to add 2 million tonnes of capacity and improve cost-competitiveness.

“About 19 member-companies of Indian Paper Manufacturers’ Association (IPMA), who command over 55 per cent of the total industry revenue will collectively invest $2.5 billion, to increase capacity and improve cost-competitiveness. We have also moved the government for a Rs 600-crore technology upgradation fund,” said Mr Pradeep Dhobale, President, IPMA.

Among major investments, Ballarpur Industries Ltd (BILT), one of the leading paper manufacturers, will invest Rs 900 crore to raise its coated wood-free paper manufacturing capacity by 1.9 lakh tonnes to 3.45 lakh tonnes at Bhigwan in Pune. The project is expected to be completed by November 2008.

BILT also plans to invest another Rs 600 crore to increase uncoated paper capacity to 3.2 lakh tonnes including a new captive power plant at Ballarpur in Maharashtra. This will go on stream by June 2010.

The investments would be financed through a fresh debt of Rs 700 crore and internal accruals of Rs 200 crore. “We command 50 per cent market share of the coated wood-free paper segment and the proposed expansion will help the company consolidate its leadership position in the coated wood-free paper market,” Mr R.R. Vederah, Managing Director, BILT, said.

Andhra Pradesh Paper Mills will invest Rs 600 crore to raise its pulp capacity, while Seshasayee Paper and Boards plans to pump in Rs 350 crore for capacity expansion.

Though the industry has a total capacity of 8.5 million tonnes, it produces about 7.3 mt. The domestic demand is about 8.3 mt.

The annual import of paper has grown at over 19 per cent since 2001-02. In April-January 2006-07, imports grew 22 per cent over April-January 2005-06.

Industrial plantation

IPMA has urged the government to allow industrial plantation on degraded forestland. The Government does not allow forests to be used for sourcing wood by the corporate sector, nor does it permit industrial plantation on degraded forestland.

“Recycling of wastepaper is among the lowest in India at 2 mt (about 20 per cent). We are making efforts to increase the use of wastepaper recycling to 40 per cent,” Mr Dhobale said.

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