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Seshasayee Paper and Boards Ltd, which completed an acquisition earlier this calendar year and increased its capacity, is in the process of finalising plans to expand its production capability up from 2.1 million tonnes to 5 million tonnes a year.
It expects to initiate expansion strategy early next year.
The Deputy Managing Director of Seshasayee Paper, Mr K.S. Kasi Viswanathan, said, “We are amongst the most integrated paper and paper products manufacturers covering production of raw material to manufacture of high quality papers. We are looking at consolidation and expansion of the production capacity.”
“From a manufacturing capacity of 1,20,000 tonnes per annum, we now have total capacity of 2,10,000 tonnes per annum after the acquisition of Subba Raju Papers, a producer of paper using waste paper from a plant located at Mukkudil in south Tamil Nadu. This acquisition was made through an investment of about Rs. 250 crore,” he said.
“We have now taken up consolidation of these two plants and expect to achieve a turnover of about Rs 800 crore this year, up from Rs 550 crore we logged last fiscal. The growth in revenue would be due to additional capacity from the acquisition and increase in sales volumes,” he explained.
Rs 1,000-crore outlay likely
“We are in the process of finalising plans to increase the manufacturing capacity up from 2.1 lakh tonnes to 5 lakh tonnes per annum. We hope to take up expansion and complete this by 2013. This is expected to entail an outlay of about Rs 1,000 crore,” Mr Viswanathan said.
During his visit to Hyderabad for PaperTech 2011, Mr Viswanathan told Business Line that the Indian paper consumption, estimated to be about 10 million tonnes a year, is poised for growth in years to come. The expansion is aimed at meeting this opportunity. As opposed to India, the US consumes about 70 million tonnes a year down from a high of 115 million tonnes and China about 80 million tonnes.
Price challenges
“The paper sector is faced with few challenges, which includes growing input costs from raw materials and also from coal, whose price has shot up from Rs 3,500-4,000 a tonne to Rs 7,000-8,000 a tonne. The industry is seeking to address these issues as prices are constantly going up. The tripartite agreement our company has takes care of raw material from farmers and bagasse from Ponni Sugars plant,” he said.
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