Emami to add paper capacity

Emami Paper Mills limited, a closely held company of the Rs 1500 crore Emami group, expects turnover to rise from an expected Rs 250 crore this fiscal to nearly Rs 800-900 crore in the next two years thanks to continuous capacity addition.

Its Balasore facility has started production at its expanded capacity only a month back.

Its capacity was raised by 275 tonnes per day of newsprint with an investment of Rs 350 crore.

The company will invest Rs 500-600 crore on another 500tpd capacity at the Balasore facility, said R S Agarwal, joint chairman of the Emami Group of companies.

It will start ordering for equipment by March end, said P S Patwari, executive director of EMPL.

Total production capacity would be 900-1000tpd at the unit.

EMPL's total capacity would be 3 lakh ton per annum at the end of the expansion process.

The funds for expansion projects will be raised through a mix of debt and equity, Patwari added.

The turnover from paper was estimated to be around Rs 400 crore for the next 2008-09 fiscal and around Rs 800-900 crore after the capacity expansion was completed in two years.

EMPL was banking on the rising demand for newsprint in the country, which was now largely imported owing to inadequate domestic capacity.

The demand for newsprint was growing at 10 per cent year-on-year and all major paper units are expanding capacity.

India currently imports 1.5tpa of newsprint.

This apart, EMPL is planning to set up a paper and pulp mill with a capacity of 600tpd.

Currently, its Balasore facility uses recycled paper as raw material.

The integrated facility would use both agro-based and wood pulp raw material.

The estimated investment on the project is Rs 2000 crore and work expected to start within two years, with construction to take 20-24 months. Consultants are working on the detailed project report, said Patwari.

Expected sales from the integrated mill will be Rs 800-900 crore. The company expects to work with debt:equity ratio of 2:1 for the project.

The equity component of around Rs 700 crore could be raised through rights as well as public offering. EMPL could go for a public offer in the next one year.