The Hindu Business Line : Yash Papers to focus on exports, plans public issue

"Currently, 20 per cent of our revenue comes from exports and we want to take this to 40 per cent," said Mr Ved Krishna, Managing Director, Yash Papers. The company, which is in the process of expanding its paper manufacturing capacity at a cost of Rs 85 crore, also expects the domestic revenue to move up.

"There is a gap in the demand and supply of paper, particularly speciality paper," said Mr Krishna.

Yash Papers is entering the capital market to raise Rs 23.5 crore for the expansion of project. The company is issuing 1.68 crore equity shares of Rs 10 each for cash at a price of Rs 14 per share. The issue is slated to open on June 30.

The promoters, Mr Krishna and his family, would be subscribing to the issue to the extent of 20 per cent. At present, promoters' holding is 40 per cent. Post-issue, their holding will stand at 25 per cent. "We will go for the creeping acquisition route to shore up our holding. We would like to settle at 45 per cent," Mr Krishna said.

The company has already sought bank loans to the tune of Rs 57 crore, which form the debt portion of the project cost. The company had earlier explored the possibility of inviting an overseas investor to take a stake. "However, some these investors wanted 40 per cent and we were not willing to offer more than 25 per cent," Mr Krishna said.

While demand has been robust, input costs have risen considerably and end-prices of products have not moved in line. Prices of pulp and caustic soda have moved up sharply; pulp accounts for 30 per cent of the total production cost. Caustic soda prices, according to Mr Krishna, have risen by 100 per cent.

However, Yash Papers has been able to hedge its risk because of its presence in speciality and value-added products. It caters to a niche segment of the paper market. Its products include wrapping paper, custom made for specific industries.

Yash Papers, which uses bagasse and wheat straw, is situated in the raw material-abundant region in Uttar Pradesh. It is in the process of tying up with an agricultural university to promote plantation of poplar and eucalyptus trees, the pulp of which can be used as raw material.

In order to bring down the cost, the company is setting up a chemical recovery .

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