Kejriwal Group lines up Rs 200cr for expansion

As part of its backward integration and consolidation plans, the Mumbai-based Kejriwal Group is setting up a paper manufacturing unit and expanding its existing paper processing units across the country including Ahmedabad.

Through its flagship company Kejriwal Paper Ltd and its division Kejriwal Exports, the group will be investing around Rs 200 crore for the purpose.

Currently, it has paper processing units in Ahmedabad, and Mumbai, Thane, Palghar, Vasai and Vashi in Maharashtra with a combined capacity of 300 tonnes per day (TPD), which will be expanded to 500 TPD within the next four months.

Jointly, the units have over 30 lines of production including ruling, stitching and trimming. Of the total investment, around Rs 4-5 crore will be put into the Ahmedabad unit to increase the lines of production from 4 to 10 by adding ruling, cutting, stitching, trimming and other functions.

Expressing his desire to enter the domestic stationary market as well as do an export of $100 million by June 2007-08, Santosh Kejriwal, chairman of the group, said, "At present, we are a newsprint processing-cum-marketing and stationary exports company. We want to shift gears by expanding our paper processing capacity for stationary to facilitate our entry into the domestic market as well. Moreover, as part of backward integration, we also want to manufacture paper rather than just process them."

Apart from the processing units, Kejriwal Paper is also setting up a paper manufacturing facility of 500 TPD capacity near Mumbai, which will complement its paper processing and stationary business.

"While we used to export stationary products till now, with the expansion we hope to capture at least 10-15 per cent share of the 2- lakh tonnes per annum strong domestic stationary market. We will be marketing the products under the 'Kejriwal' brand," said Kejriwal.

The group accounts for 60 per cent of the stationary exports market in India, with around 80 per cent of its exports going to United States, followed by UK and other countries.

It also has some long-term plans of further backward integration in its newsprint business, where currently it sources raw materials from the domestic market as well as imports and processes it before selling it to media houses.

Kejriwal said the group intends to begin manufacturing newsprint on its own, for which it will be setting up a 2,500-tonnes per month plant in Punjab at a cost of Rs 50 crore by next year.

With most of the financing done by banks for the current expansion projects, the group is likely to go public after a couple of years, added Kejriwal.