The Hindu Business Line : Fibre price rise to put pressure on Hindustan Paper Corp’s margins

Kolkata, April 24 There has been a 30-40 per cent increase in the cost of raw materials for paper and newsprint manufacturing, Mr Raji Philip, Chairman and Managing Director, Hindustan Paper Corporation Ltd (HPC) has said. “Fibre prices have gone up by 30-40 per cent in the last one year and this will put pressure on margins,” Mr Philip said while briefing media about the company’s financial performance. The rise in the input cost could spur an inevitable rise in the cost of the finished product in the medium term, he said.

HPC has posted a 23.45 per cent growth in net profit at around Rs 100 crore for 2007-08 against Rs 81 crore in 2006-07. Production stands at 3,27,857 tonnes and sales turnover is Rs 1,137 crore. The company has set a target of 3.4 lakh tonnes for production and a sales turnover of Rs 1,313 crore for 2008-09.

HPC has three subsidiaries — Hindustan Newsprint Ltd, Nagaland Pulp and Paper Co Ltd and Jagdishpur Paper Mills Ltd.

The Jagdishpur Paper Mills is a greenfield venture of HPC with a project outlay of Rs 2,742 crore. The company has a 51 per cent stake in the subsidiary and is planning to tap either debt or equity market for raising the required funds. “We would look at tapping the capital markets at the opportune time,” said Mr Philip.

HPC has taken several fibre security initiatives such as the utilisation of degraded forestland or wastelands for captive plantation.

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