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R. Balaji

Chennai, July 27 Seshasayee Paper and Boards Ltd plans to double its production capacity at a cost of Rs 350 crore.

Mr N. Gopalaratnam, Chairman and Managing Director, Seshasayee Paper, said the company plans to expand its production to 2.25 lakh tonnes from the present 1.15 lakh tonnes.

The expanded capacity will be in place in two years’ time and the company is scouting for a used paper machine.

On the funding, he said the company plans to bring in about a third of the cost, Rs 105 crore, through internal accruals and has approached financial institutions for the balance as term loans.

The company is in the final stages of implementing a Rs 370-crore mill development plan to set up a modern wood pulp mill with an expanded capacity of 350 tonnes a day, which is double that of its existing capacity.

The new pulp mill is expected to reach full production by September 2008.

In addition, the company has a 90-tonne a day bagasse – sugarcane fibre – pulp mill.

The company is a pioneer in using bagasse as raw material to manufacture paper.

Once the pulp mill expansion is in place, it will have a total capacity of 440 tonnes a day making it entirely self- sufficient in raw material pulp requirement.

Mr Gopalaratnam said this represents significant cost savings for the company which can do away with costly imported pulp.

It now uses about 100 tonnes of imported pulp that ranges around Rs 35,000 a tonne. Domestic pulp would be cheaper at about Rs 20,000 a tonne.

Addressing the company’s AGM at Erode on Saturday, Mr Gopalaratnam said, in 2007-08, the company had exceeded capacity utilisation with a production of 1.24 lakh tonnes.

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