Bilt scouting for mill, plantation in East Asia

Ballarpur Industries Ltd (Bilt) is scouting for a plantation or a pulp mill with plantation in Vietnam, Malaysia, Thailand or Indonesia.

The company is also in talks with the Malaysian government for a 50,000-100,000 hectare plantation to start supplying in 6-7 years, according to B Hariharan, group finance director.

The company is keen to get a pulp mill attached to a plantation but the search so far has not got much headway, said Hariharan.

"The process is on, but we have also started considering plantations where setting up a greenfield plant may be lucrative."

A plantation or a pulp mill with plantation is required to help meet the ever rising raw material demand following the company's Rs 1,200-crore expansion plan to double its production capacity by March 2008.

Post-expansion, its production capacity will be raised to 850,000 tonne per annum from the present 450,000 tonne. In case of coated paper, it will be raised to 280,000 tonne from the current 125,000 tonne and that of uncoated paper to 550,000 tonne from 340,000 tonne.

In the uncoated paper segment, Bilt is able to sell its total production in the domestic market and hopes the equation to remain the same post-expansion also.

However, in the coated paper segment, Bilt projects exports of 20,000 tonne, out of the current 125,000 tonne output.

"After its expansion, the company will have to export about 50 per cent of the enhanced capacity. We have markets in the US, Australia, south east Asia and Europe," said Hariharan.

Bilt expects its revenue from exports at Rs 100 crore in the current financial year 2005-06 (July-June), he added. The company plans to merge a group unit, APR Packaging, with itself and a meeting of shareholders will be held on March 31 for considering the scheme.

APR is already supplying to meet raw material demand and will continue to do so post-expansion.

Discussing about the progress of the expansion plan, Hariharan said that the letters of intent for machinery will be signed in the first week of April.

"The commissioned value of plant machinery is $150-160 million with a delivery time of 13-14 months, followed by another six months for commissioning. We hope to complete expansion by March 2008."