A company for the manufacture of writing & printing varieties of paper is promoted by a group of highly qualified and experienced professionals from diverse sectors including large integrated paper mill.
The principal focus would be to build a 600 tpd complex to produce News Print, Writing & Printing varieties, Paperboard and Industrial Packaging with secondary fibre and soft wood pulp furnish at a total cost of Rs. 600 Crores. However, initially, the management intends to commence with a 100 tpd plant at a cost of Rs.110 Crores.
The plant will be located in East Godavari District of Andhra Pradesh. The site has location advantages like availability of plenty of water and proximity to Kakinada and Visakhapatnam sea ports for import of waste paper, wood pulp and coal and export of finished paper.
India is the 15th largest paper manufacturer in the world, accounting for ~2.5% of the world’s output. India is the world’s fastest growing paper market, growing at a CAGR of 7.3% over FY 06-11. Domestic paper & paperboard demand is closely linked to economic activity as demand has grown at an average 0.9x multiple of GDP in the past 5 years.
Over the next five years, paper demand is projected to grow from 10.8 Million Tons in FY 11 to 14.7 Million Tons in FY 16, representing a CAGR of 6.4% and GDP multiple of 0.8x. Over the long-term, the country’s paper demand is looking structurally positive as India’s per capita paper consumption of 8.8 kg is well behind the global per capita consumption of 58 kg.
Paperboard is the largest segment, accounting for 45% of the demand followed by Printing & Writing (35%) and Newsprint (20%). Over the next five years, the Printing & Writing segment is expected to grow at 6.5% vs. 10-year CAGR of 6.8%, the Newsprint industry to grow at 6.6% vs. 10-year CAGR of 7.4% and the Paperboard segment to grow at 7.0% vs. 10-year CAGR of 7.2%.
The fibre resources used by the Indian pulp and paper industry come from three sources – forests (bamboos, mixed hardwoods from forest, and eucalyptus from plantations), agricultural residues (bagasse, grain straws, cotton stalks) and recycled paper (domestic and imported). Currently, category wise the ratio in the total production of paper is 21%, 23% and 56%, respectively. Hence, capacity additions should be based on secondary fibre.
Usage of secondary fibre as the major raw material does not contribute to the felling of trees. The Management, sensitive to the cause of preserving ecological health, will install a high end Effluent Treatment Plant to treat the water before discharging. A 5 MW power plant will be installed to ensure continuous low cost power supply for uninterrupted production.
The company is incorporated. Land procured.DPR and Financials have been prepared and were submitted to the bank.Oral approval to fund the project has been received from the bank.Applications for all statuatory approvals have been made and are expected shortly. Quotations for machinery, equipment and civil works with drawings have been received and negotiations are in progress for freezing the prices and finalising. Construction work is likely to commence during March/April 2012 and commercial production is likely to start from January/February 2014. The project is in highly active mode.
We would like to welcome investors into our family to associate with the management in building a beneficial professional venture.
1) Highly qualified and experienced management team
2) Rich experience of turning around a large incipient sick imtegrated paper mill
3) Most dynamic product mix
1) High IRR - @ 14.75% approximately
2) High EPS - @ average over 25%
3) Excellent ROI - @ approximately 15%