Hind Paper to set up green units in Assam

Company to add new product range

Kolkata based Hindustan Paper Corporation (HPC) is planning to introduce the elemental chlorine free (ECF) production process at its two mills in Naogaon and Cachar in Assam. This would be the first ECF production line at a paper mill in eastern India.

HPC will also add a new product range in its existing portfolio and will scale up capacity of the Naogaon Paper Mill (NPM).

It would invest around Rs 520 crore for this modernisation and diversification plan of its mills in central and south Assam, the chairman and managing director of HPC, Raji Philip, said during a press conference to announce the annual results of the company.

HPC has posted a profit of Rs 58.52 crore over a turnover of Rs 854 crore in 2004-05 compared to a profit of Rs 67.91 crore in 2003-04 over a turnover of Rs 876.91 crore.

Explaining the fall in turnover and profitibility, Raji Philip said the devastating floods in Assam last year were largely responsible for below par performance of its paper mills in the state.

"HPC mills suffered a loss of around Rs 15-20 crore due to flood and that has made the difference. But this is a temporary set back "" I am hopeful HPC will achieve a turnover of Rs 1050 crore in 2005-06," he added.

According to him, HPC is hoping to become a Rs 2000 crore company by the end of 2010. Commenting on future plans, the HPC CMD said the company will invest around Rs 150 crore in next 2-3 years for introduction of ECF technology and new product ranges.

"HPC will soon start production of copier-grade paper generally known as office stationery. This is a higher-end product and demand is currently growing at a rate of 15 per cent, while the margin is good in this product as well," he said.

Besides, HPC will invest around Rs 270 crore in phased manner till 2009 to scale up production as well as for technological upgradation. HPC will invest Rs 285 crore in NPM and Rs 235 crore at Cachar Paper Mill (CPM). The company's capacity will be around 2.30 lakh ton by the end of 2009.

The introduction of ECF technology is expected to give HPC an edge in the market because it is environment friendly and would also yield better product quality. In a parallel development, there has been some progress on revival of paper mills in Nagaland.

The board of reconstruction, the newly formed body of the Union government for central PSUs, is likely to submit the final report on the revival of the closed Nagaland Pulp and Paper Corporation by May, the director-finance of HPC, MV Narashima Rao, said.

The Centre will contribute Rs 226 crore as equity in the ailing subsidiary of HPC. The revival package would include a debt component of Rs 226 crore.

The first ranche will be used to set off the accumulated losses of NPPC against the existing capital and then in the second phase fresh capital will be brought into the company.

NPPC currently has an accumulated loss of Rs 110 crore and paid-up equity of Rs 112 crore.

The Nagaland state government has around 5 per cent stake in the outfit.