JK Paper Ltd targets to export about 20 per cent of its production in the first year after commencement of commercial production of its new packaging board unit in Gujarat.

The company on January 14 had announced the commencement of commercial production from the new unit.

“We look forward to export 15-20 per cent from the new unit in the first year and the remaining in the domestic market,” said AS Mehta, President and Executive Director of JK Paper. The current demand-supply is fairly healthy in the domestic market, Mehta added.

On the capacity utilisation, the company is looking at about 1,50,000 tonnes production in the first year (FY 2022-23) and eventually ramp up to about 2,00,000 tonnes, against the installed capacity of 1,70,000 tonnes per annum.

Mehta said that JK Paper is known for utilising more than its capacity and current overall capacity utilisation of the company is about 105 per cent.

“The brand new state-of-the-art packaging board machine with cutting edge technology has come up at a capital cost of nearly ₹2000 crore,” it said in a statement. After the addition of new unit of virgin fibre board, the company’s total capacity will reach 3,00,000 tonnes, the second biggest manufacturer after ITC.

JK Paper’s combined capacity in both paper and board manufacturing will reach to 7,61,000 tonnes (including capacity of subsidiary Sirpur Paper Mills), the company said.

As packaging board prices currently hover around ₹70-74/kg, the company expects to add about ₹1,200-1,300 crore turnover from the new unit during FY23, Mehta said.

The new manufacturing plant located at Songadh near Surat was initially programmed to be commissioned by March-April 2021. However, it got delayed due to Covid-induced disruptions.

The capacity augmentation was aimed at significantly expanding paper production and to take advantage of the growth momentum the country’s paper sector predicted over next few years, Mehta had earlier said.

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