JK Paper, market leader in copier segment, is scouting to acquire a manufacturing plant in South India as it looks to offset increased transportation costs.
"We are open to it," JK Paper Managing Director Harshpati Singhania said when asked if the company was looking at acquiring plant in southern parts of the country.
He, however, added that the company has not been able to get a 'suitable' plant, as most of the offers were coming from small-sized plants.
Singhania said most of the plants, which are available for acquisition, have capacities of 20,000-30,000 tonnes, which does not suit the company's plan.
He said the idea behind looking out for a facility in South India was to reduce transportation costs in the wake of increased diesel prices as JK Paper still does not have a manufacturing unit to cater to the region.
"Our Orissa unit, which is located in the southern part of the state, helps us in catering the South Indian market as of now," he added.
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Singhania said the paper industry has been absorbing the impact of diesel price hike but finds transportation through the railways a difficult proposition.
"There is a problem in transporting paper through Railways as they insist on full rake load and not allow wagon," he said.
JK Paper, which has a 40 per cent market share in the photocopier segment, wants to focus on value-added products such as copier, coated paper and packaging board segments.
The copier segment is growing at about 20 per cent compared to eight per cent in the entire paper industry.
Interestingly, the growth of paper industry is linked with GDP growth rate, historically, he said.