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Seshasayee Paper and Boards (SPB) has acquired a newly commissioned paper mill involving a total investment of Rs 250 crore.
The acquisition of the private paper mill, Subburaj Papers, located in South Tamil Nadu, gives Seshasayee Paper multiple advantages apart from ready capacity addition of about 60,000 tonnes a year to its present 1.15 lakh tonnes.
The company has informed the BSE that the capacity of the new mill can go to about 90,000 tonnes with minimal investment. The Rs 250-crore acquisition includes a one-time settlement with the banks and expenditure on expansion.
Subburaj Papers was commissioned early in 2009 at Ambasamudram, Tirunelveli, about 60 km from the Tuticorin port. Company officials had then said the printing and writing paper unit with capability to make newsprint will use recovered paper as raw material. It has a Voith-modified machine, Siemens electrical systems, a de-inking plant by Metso, Finland and a 6-MW power plant.
But the unit has not been in operation for the last six months due to financial constraints.
Accessibility advantage
Mr N. Gopalaratnam, Chairman and Managing Director, Seshasayee Paper, said the acquisition gives SPB, which had been exploring expansion, a unit in a location that gives it easy access to major markets, including Sivakasi and Kerala, and is close to the sea port, to facilitate import of raw material and coal, and export of paper.
The site also comes with over 300 acres of land which can be used for future capacity expansion. The unit is located on the banks of the Tamiraparani, a perennial river. The mill's capacity to use wastepaper as raw material gives it access to the ‘eco markets', he said.
The new mill also complements Seshasayee Paper which has surplus pulp capacity which can be diverted to Subburaj Papers, which will produce about 50,000 tonnes of paper in the first year and can be stepped up to full capacity from the second year when it will look at newsprint production.
On the exchange, the company's Rs 10 share closed 4 per cent higher over the previous close at Rs 227 (217.80).
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