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ITC arm to invest Rs 1,100 cr in Bhadrachalam paper plant
The Hindu Business Line - 10 Mar 2010

Production capacity to go up to 6 lakh tonnes a year.

Looking ahead

The expansion project has received all the necessary clearances

The investment is being met by internal accruals

The company has decided to make Andhra Pradesh the base for expansion

The Paper Boards and Speciality Papers Division of ITC Ltd has sewn up plans to invest Rs 1,100 crore in its expansion project at Bhadrachalam in Andhra Pradesh.

“Work on the expansion project, which entails ramping up the manufacturing capacity from 4 lakh tonnes of paper a year to 6 lakh tonnes a year will begin shortly,” according to Mr Pradeep Dhobale, Chief Executive of Paperboards and Speciality Papers Division.

Mr Dhobale said that the project has received all the necessary clearances and the Government nod, and work will start next month. It is likely to be operational by December 2011. The entire investment for the project is being met through internal accruals.

ITC has three manufacturing units. The Bhadrachalam facility having capacity to produce 4 lakh tonnes which includes 2.5 lakh tonnes of packaging and board material and 1.5 lakh tonnes of paper. The plant near Coimbatore has a production capacity of about one lakh tonnes a year and the West Bengal unit can produce high quality paper of about 30,000 tonnes a year.

The Tamil Nadu plant was acquired from Ballarpur Industries. Located at the foothills of the Nilgiris, it has limitations in terms of taking up further expansion. The West Bengal unit is focussed on making decorative laminates, fine paper that is useful to produce small Bibles and dictionaries.

The paper division contributes about Rs 2,500 crore in revenues and around Rs 200 crore come through exports, Mr Dhobale said.

AP focus

The plant located in Andhra Pradesh is supported by a vibrant farming community. The pulp is procured from not just local farmers but from several other districts in the region.

The social forestry initiative of ITC is also playing a critical role in encouraging farmers to take up cultivation of eucalyptus, subabul and casuarina.

Sharing all the learning with the farm community, ITC research and development teams are providing critical inputs that encourage farmers to take up cultivation cost-effectively. “We have therefore decided to make Andhra Pradesh our base for expansion,” he said.

The paper industry in the country, now estimated to be about Rs 25,000 crore, typically grows in sync with the economic growth. Additional capacities are being augmented to make up for the demand-supply gap, he said.

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