ITC paper arm to invest Rs 260 crore in Coimbatore unit

ITC Ltd's paperboards and speciality papers division plans to invest Rs 260 crore in its Coimbatore unit, which it had acquired from Ballarpur Industries Ltd, in November 2003.

The company wants to increase the plant's output by 65,000 tonne within a year, Pradeep Dhobale, chief executive, paperboards & speciality paper division, ITC Ltd, said at a press conference here.

The division has also invested Rs 230 crore in machinery at the Bhadrachalam unit in Secunderabad to manufacture paperboards using the elemental chlorine free(ECF) technology.

The unit's packaging material output is expected to go up by 75,000 tonne by the end of this financial year, he said while announcing the launch of a new technology, the first of its kind in India.

With these capacity additions, the company's total paper output would go up to 365, 000 tonne from the present 225,000 tonne.

Predicting a growth of the high end packaging paper material used of 22-25 per cent per annum in the coming years, the investment is in anticipation to this, he said. Paperboard is likely to grow at 7 per cent, he added.

The domestic market leader in the paperboard packaging segment, ITC projects that the share of paperboard revenues in the division's total revenue will go beyond the present 80 per cent in 2003-04.

The company's paperboard division anticipates a revenue growth of 14 per cent to Rs 1000 crore in 2003-04 over the last year.

The EFC technology, a chlorine compound bleaching agent, that the company has purchased from Metso Corporation, the world leader in paper is the first of its kind in India.

Unlike its widely used counterpart chlorine, ECF technology leads to lower pollution through lower dioxin discharges into surface water and is chemically inactive with food products and so applicable for packaging.

Anticipating a call from the ministry of environment and forestry on the legal aspects on the use of environment friendly technology in the near future, the company would be better placed vis a vis its competitors, he said.

The division is also looking at acquiring forestries in Punjab and Andhra Pradesh to meet its increased raw material needs.