HPC selloff hangs fire

The proposed disinvestment of the Hindustan Paper Corporation (HPC) appears to be in a limbo if the exit polls are any indications, according to its chairman and managing director Raji Philip.

Philip said if a new force, other than the BJP-led NDA, came to power, the possibility of the government approach to the disinvestment might be different.

Industry sources said even if the BJP came to power with marginal majority, it would have to depend on its allies and in this scenario disinvestment may get delayed by at least six months.

The government had appointed SBI Caps as merchant banker to the disinvestment of HPC. Expressions of interest had also been invited. Some of the leading paper makers have made it public that they would bid for HPC.

Philip said the company had posted a gross profit of Rs 51.15 crore on a sales turnover of Rs 873 crore in the financial year ended March 31.

Thanks to increased demand, HPC has set a target of Rs 1,000 crore for sales and 3.3 lakh tonne for production.

HPC's two units, Nagaon Paper Mill and Cachar Paper Mill, achieved all round improvement in production and sales compared with the target set for the year 2003-04.

At Nagaon, the capacity utilisation was at 112.64 per cent and production output was eight per cent higher that the target. At Cachar, capacity utilisation was at 97 per cent, he said.

About Hindustan Newsprint Ltd, a subsidiary, he said capacity utilisation was at 112.56 per cent and production output was 12 per cent more than the previous year.

According to him, HPC was planning to go for substantial capacity addition through brownfield expansion. He said the company had earmarked an investment of Rs 150 crore which was awaiting government approval.

During the 10th Five Year Plan, Rs 250 crore had been earmarked for modernisation and technology upgradation for the company, he said.