Orient Paper plans cement unit at Sundergarh

The GP-CK Birla Group promoted Orient Paper and Industries Limited has proposed to set up a greenfield cement plant in the Sundergarh district of Orissa.

It also plans a brownfield venture at its existing closed paper unit at Brajarajnagar in the same district at a total investment of over Rs 1200 crore.

While the greenfield venture at Sundergarh would have a capacity of 8000 ton per day (tpd) of clinker production and 6000tpd of PPC grinding, the project at Brajarajnagar will have a 6000tpd of PPC grinding unit.

The Brajrajnagar was originally a paper unit which was closed down and would now be converted into a cement unit with its existing infrastructure like land, water and power.

The necessary equipments for cement manufacturing would subsequently be sourced in by the promoters for the Brajarajnagar unit.

Orissa government sources said, Orient would be investing around Rs 180 crore for its Brajarajnagar unit and the remaining for the greenfield venture at Sundargarh.

The company has asked for over 1000 acres for setting up the Sundargarh project.

State government sources said, Orient Paper proposes to make the investment in 1:1 debt equity ratio where 50 per cent of the money (around Rs 600 crore) would be brought in through internal accruals and the remaining 50 per cent would be borrowed from banks and financial institutions (FIs).

A government official said, "Their investment plans are crystal clear and we are convinced that the company is serious in setting up the cement plant".

State industry officials pointed out, Orient Paper has already submitted a techno-feasibility report (TFR) for its two cement projects.

The matter has also been discussed at the highest levels of the state government but some problems continue to plague the cement project in Sundegarh as regards to availability and sourcing in of limestone.

State officials said, "The Orient Paper project's problem will be the availability of limestone. If the raw material is not sourced from some nearby points it will be virtually impossible to run the project smoothly. Hence, we are also suggesting other options to the promoters."

A state government appointed high-powered committee, meanwhile, has asked the promoters to shift their proposed greenfield project from Sundergarh to Patangi in Koraput district near Damanjori as limestone the prime feedstock for the cement plant is available there in abundance.

Patangi in Koraput had limestone deposits.

The high-powered committee recently decided to approach the promoters for taking over limestone quarries on lease for a smooth supply of feedstock. The government was yet to receive a feedback from the promoter's side.

Officials said, "Orient Paper already has experience in cement. We are confident that they would give a proper thinking before going ahead in setting up the new cement plant at Sundergarh".

Orient Paper executive in Kolkata R K Mohta refused to comment.