JK Paper has signed a memorandum of understanding with the Myanmar Government to pick up equity and revive the State-owned Thar Paung Paper and Pulp Mill.

Mr A.S. Mehta, President, J. K. Paper, told Business Line that the Myanmar paper company has an annual pulp production capacity of 70,000 tonnes and paper capacity of 15,000-17,000 tonnes.

“Our plan is to use 10,000-15,000 tonnes of pulp in Myanmar and ship the rest to India,” he said.

JK Paper is in the process of studying the business process and will prepare a business plan in two to three months. Details on the valuation and quantum of investment will be decided soon, said Mr Mehta.

At present, production at Thar Paung Paper is erratic due to the fluctuating operational cost. Myanmar has large forest cover with high-grade trees suitable for manufacturing paper.

Though pulp prices have stabilised in the last few months, import prices have gone up due to rupee depreciation. Pulp prices have stabilised at $600 a tonne in the June quarter, against $550-650 recorded in the preceding quarter. The company has hiked product prices by four per cent to cover up the sharp increase in operational cost. Supply from Coal India through linkages has improved.

JK Paper said its net profit in the June quarter was down 42 per cent at Rs 14 crore (Rs 24 crore), while sales were up 6 per cent at Rs 345 crore (Rs 324 crore). Expenses jumped 13 per cent to Rs 32 crore (Rs 284 crore) due to higher cost of raw material and chemical prices. Shares of the company were up 0.14 per cent at Rs 36 on Monday.

> suresh.iyengar@thehindu.co.in

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