Yash Papers to set up poster paper plant

Faizabad-based Yash Papers, a manufacturer of brown wrapping paper, plans to set up a 70 tonnes per day (tpd) MG poster paper plant and a 5 MW captive power unit in the next two years. Ved Krishna, managing director, Yash Papers, said: "We plans to set up a poster paper plant and captive power unit at Faizabad by the end of 2006. We also propose to set up an integrated 130 tpd bagasse and straw pulping and bleaching unit and a chemical recovery plant."

Krishna said the company is investing Rs 2 crore for the captive power plant. He added that Yash Papers is more into Bollywood poster papers, garments wrapping, postal papers and share papers.

The company's turnover stood to Rs 28 crore and it recorded a profit of Rs 2.5 in the 2004-05 financial year. the company is eyeing a profit of Rs 3 crore in the next year.

About exports, Krishna said: "At present, 13 per cent of our revenues come from exports. We want to take this to 40 per cent. We are exporting to United States, Canada, Singapore, and other countries".

Yash Papers plans to invest Rs 85 crore to expand its paper manufacturing capacity.

When asked about competition from other players, Krishna said: "There is a gap in the demand and supply of speciality paper in India. We think healthy competition will improve the quality of papers and the customer will be the ultimate beneficiary."

Krishna said input costs have risen considerably and end-prices of products have not moved in line. Prices of pulp and caustic soda have moved up sharply; pulp accounts for 30 per cent of the total production cost. Caustic soda prices have risen by 100 per cent.

The company currently focuses on niche market grades, namely low-grammage Kraft paper.

IPO on cards

Yash Papers is coming out with a fresh issue of equity shares to fund its expansion plans.

The company will issue 1,68,00,000 equity shares of Rs 10 each for cash at a price of Rs 14 per share. This public offer would remain open from June 30 to July 8, 2005.

The Rs 23.52 crore generated from the public issue will be utilised to part-finance Yash Paper's plans for setting up the facility for production of speciality poster grades of paper.

The company also intends to consolidate its control over inputs and expand its customer base through initiatives in product distribution and branding.

The total investment outlay is Rs 85 crore, the major financing for which was tied up through a debt of Rs 56.67 crore from United Bank of India, Oriental Bank of Commerce, Union Bank of India and UCO Bank. The remaining investment has been brought through internal accruals.