Hindustan Paper scripts Rs 3979 crore expansion

The state-owned Hindustan Paper Corporation (HPC) has earmarked an investment of Rs 3,979 crore over the next 2-3 years for greenfield and brownfield expansion in paper and newsprint production.

The corporation has decided to set up a new paper mill in Uttar Pradesh with an annual production capacity of 300,000 tonne of special quality crème woven paper. The project will see an investment of about Rs 2,600 crore.

The mill would go on stream within 30 months of the Centre's approval, chairman-cum-managing director Raji Philip said.

HPC is also modernising and upgrading technology at the Cachar and Nagoan paper mills with a project outlay of Rs 660 crore. This includes 30 per cent capacity expansion at Nagaon, which is running at a current capacity of 1 lakh tonne per annum. The project would be completed by 2009.

The company has also embarked on an expansion-cum-diversification programme at its subsidiary Hindustan Newsprints (HNL) with a project outlay of Rs 719 crore.

The initiative would augment HNL's production capacity to three lakh tonnes per annum by November 2008. It would also help HNL to move towards value- added products such as coated and uncoated papers.

Along with the greenfield projects, HPC has decided to reopen its Tuli paper mill, which has remained suspended for the last 14 years, in Nagaland.

The revival scheme to restart the operations by expanding capacity to 66,000 tonne per annum has been cleared by the Cabinet Committee on Economic Affairs (CCEA) and the matter was pending before the Board for Industrial and Financial Reconstruction (BIFR) for discharge.

About the corporation's business strategy, Philip said the corporation was poised to become a Rs 3,000-crore company by 2011 with an installed capacity for producing over 8,00,000 tonne of paper and newsprint against its combined production of 3,20,880 tonnes of paper and newsprint.

For 2007-08, HPC has set a target of 3,33,000 tonne of production, comprising 2,18,000 tonne of writing and printing paper and 1,15,000 tonne of newsprint. The company is aiming at a sales turnover of Rs 1,200 crore in 2007-08.

The company, which exports part of its production to South-East Asian and West Asian countries, has approached the external affairs ministry to enable opening of the road route to Bangaldesh via Sutarkundi on the Indian side. The move was taken after it was learnt that Bangladesh needs 25,000 tonne of paper every year for a World Bank project.