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After putting its ₹2,000-crore greenfield plant in Gujarat ‘on hold’ citing the economic slowdown, Emami Paper Mills Ltd has now returned the 100-acre land that was allotted to it by the State government.
The decision to surrender the land was taken at a board meeting in September. The company’s Executive Director PS Patwari and President Bharat Agarwal were authorised “to take all necessary steps for completing the various formalities to surrender the plot”.
BusinessLine had reported in August that the company, among the largest newsprint makers in the country, was deferring work on its greenfield project in Gujarat. Emami Paper could not be reached for comment.
However, in a notification to the stock exchanges earlier, it had said: “The management doesn’t see the present business environment is going to change in a short period of time, and hence, it has been decided against investing in the Gujarat project until the market improves...(and the) banking sector getting better to offer finance.”
The notification further said that because of “depressed capital market condition, the required fund-raising plan by the issue of further shares or otherwise is pending”. “The company is exploring an appropriate time for fund raising through a QIP or otherwise within the validity period of November 2, 2019,” it added.
₹2,000-crore investment
Emami Paper was allotted 100 acres at the Sakhya Industrial Estate in Gujarat’s Bharuch district in March 2018. The company’s initial plans involved setting up a 225,000 tonne per annum (tpa) multi-layer coated packaging board manufacturing unit (consumer packaging board unit), an 18 MW captive power plant and other auxiliaries.
The first phase of the plant was estimated to cost ₹1,000 crore. Another ₹1,000 crore was to be invested in the second phase.
Emami Paper currently has two manufacturing facilities — one each in Kolkata and Balasore (Odisha) — with a combined capacity of 360,000 tpa. The company reported a turnover of ₹1,528 crore in FY19 with a net profit of ₹44 crore. The Emami Paper stock closed at ₹73, down 2.60 per cent, on the BSE, on Monday.
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