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Emami Paper Mills Ltd has shelved the proposed Rs 1,600-crore paper mill expansion project at Balasore in Odisha.
The project could not take off due to failure of the associated social forestry plantations plan leading to uncertainty on availability of feedstock.
“We have shelved the project as we could not progress well on plantations,” said P.S. Patwari, Executive Director, Emami Paper Mills.
Emami Paper Mills is a Rs 500-crore outfit of Kolkata-based Emami Group.
The proposed wood-based pulp and paper mill project, for producing copier paper, could have scaled up the company’s production capacity to 3 lakh tonnes an annum from the current 1.5 lakh tonnes an annum.
While newsprint accounts for almost 90 per cent of the 1.5 lakh tonnes capacity, the rest goes towards writing and printing paper at present. Nearly 100 per cent of the paper produced by the company currently comes from recycled wastes. The project, which was announced earlier this year, was to use wood pulp sourced from its plantations in Odisha.
“When we envisaged this project we had proposed to put up plantations in nearly 10,000 acres of land a year in and around Odisha. We were looking at a timeframe of about five years to take up plantations to a certain level (approximately 50,000 acres) before setting up the unit,” Patwari told Business Line .
However, since the time the social forestry project was rolled out about four years ago, the company has been able to put up plantations in only about ten per cent of the targeted area.
“The culture and climate in the eastern belt is not as good as in South India. Unlike in southern India, the land in Sates like Odisha is highly fragmented. So it becomes difficult to achieve the scale of production required to kick-start the project,” Patwari explained.
Drop in demand
A dip in demand in the copier paper segment is another reason for the shelving of the project. “There has been a drop in growth rate and demand for copier paper globally post the onslaught of laptops etc, so it has become difficult to market the product,” he said.
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