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JK Paper Ltd, a JK Singhania Group company, is all set to commission its Rs 1,700-crore expansion project in Rayagada, Odisha by August as it gears up to consolidate its speciality paper business.
Santosh Wakhloo, Vice-President, Sales and Marketing, JK Paper, said: “The expansion project, which adds a capacity of 1.65 lakh tonnes of paper a year, and pulping capacity of 2.15 lakh tonnes, will enable the company to augment Rs 800-850 crore in revenues in a full year of operation.”
Turnover
In an exclusive interaction with Business Line , he said: “This will take the company’s total capacity to 4.55 lakh tonnes.
“And this is the largest single-location expansion project taken up by a paper company in the country.”
The company closed last fiscal with a turnover of Rs 1,721 crore and expects to notch up over Rs 2,400 crore in 2013-14.
With a large facility in Sonagarh, Gujarat, the company makes packaging board, coloured paper and copier paper.
This facility will enhance the company’s presence in the copier paper segment.
Consumption
“The new generation paper machine and finishing line will enable the company to meet the latent demand for superior grade copier paper used in education, the services sector and in the advertising material business,” he said.
Referring to the country’s paper industry, he said the per capita consumption is still low.
The overall paper and paperboard market is estimated at Rs 45,000-50,000 crore, excluding newsprint.
Projection
The paper sector is projected to grow at a much faster rate in the years to come as the economy grows.
But the industry itself is faced with growing input costs of pulp, coal and other costs, subjecting companies to pressure on their margins.
“We now have a market share of about 28 per cent in the copier paper segment and expect to take this up to 35 per cent in the medium term. The branded copier paper market is about Rs 3,000 crore,” he said.
New areas
The distribution network for paper companies is traditionally concentrated in the big cities and in urban areas.
“We believe that there is huge untapped opportunity in the semi-urban and rural parts of the country. As we commission our new plant, we will take up a marketing drive to reach out to new areas,” he said.
rishikumar.vundi@thehindu.co.in
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