Abhishek Industries plans expansion

Punjab-based Abhishek Industries Ltd is expanding its paper manufacturing facility at Dhaula in district Sangrur with a capital outlay of Rs 800 crore. This would be funded through internal accruals and a term loan.

With the current expansion, the paper mill have a capacity of 400 tonnes per day. Two turbines, having a capacity of 40 Mw for captive power generation, will also be installed simultaneously in the same facility.

Currently, the company has a paper manufacturing capacity of 40 thousand tonnes per annum and uses wheat straw as raw material to the tune of 200 tonnes per day, making it the largest producer of paper from wheat straw in the country. After expansion, AIL will be the biggest paper manufacturing facility in the world based on wheat straw.

According to sources in the company, it will be an agro-based paper manufacturing facility where straw (wheat straw, bagasse and sarkanda) will be the major input and and smaller proportion of wood pulp would be used to produce value added paper segments like copier, pigmented paper etc. The usage of wood pulp helps in better brightness, bulk density and tear factor in quality paper such as surface sized map litho, copier and pigmented paper.

Rajender Gupta, chief executive officer of Abhishek Industries Ltd told Business Standard that this would create an alternative avenue of income for the farmers of the villages within the radius of 50 km. He apprised that the price of wheat straw was market driven and farmers earned substantial returns on it in the off season as they did not need to incur any storage charges. Bagasse would be procured in-house from its sugar mill located near the paper unit whereas wood pulp would be procured mostly from Punjab as the state has surplus agro forestry, and from Jagadhari in Haryana that has a cluster of ply manufacturers.

The eco-friendly paper produced by Abhishek Industries from wheat straw has received wide-spread recognition and the company is a significant supplier of writing and printing paper to Oxford University Press, Thompson Press, Tata McGraw Hill and National Council of Education Research and Training.

The increase in output would help the company to consolidate its position in the global market.

"Currently, we export an insignificant percentage of our total output to countries like Dubai and Srilanka. After the commissioning of new plant in December 2007, we would sell about 25 per cent of paper in Europe and Africa.

According to Indian Paper Manufacturer Association, the consumption of paper in India is growing at a rate of 10 per cent, the largest in the world. However, the domestic supply is failing to meet the surging demand.

During 2006-07, 8.3 million tonnes of paper was consumed as against the production of 7.3 million tonnes. "So we would expand our network in the different parts of the country to meet the demand from various sectors," said Gupta.