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ITC to invest Rs 3,000-cr on greenfield plant in AP
The Hindu Business Line - 01 Feb 2011

Diversified conglomerate ITC Ltd is looking to acquire 1,000 acres of land to set up a mega Greenfield paper and paperboards factory adjacent to its existing one in Sarapaka village, Khammam, Andhra Pradesh. While the State Government gave its approval recently, clearance from the Ministry of Environment and Forests is awaited.

"Land acquisition is a subject to be handled with care. But we expect the clearance to come within the next six months," said Mr Pradeep Dhobale, Executive Director, ITC Ltd.

The company plans to invest Rs 3,000 cr approximately from internal accruals to build a capacity of 300,000 tonnes per annum (tpa) at the new manufacturing facility. At present, the integrated paper mill of the company at Khammam produces 4,50,000 tpa.

ITC meets the requirement of wood at the factory through captive plantation of 114,428 hectares in AP and Chhattisgarh. The company may also think of investing in Madhya Pradesh in the future, said Mr Dhobale.

Planting of Clones

With the help of NGOs, ITC convinces the farmers to plant clones of eucalyptus, subabul and casuarina developed by the company, said Mr H.D. Kulkarni, Vice-President (Plantation), Paperboards and Specialty Papers Division, ITC. The company supplies the soil tested plant to the farmers, at a cost of Rs 6 each. For farmers who cannot afford the cost, it is given as a loan.

When these clones reach felling stage, which is three to four years, ITC purchases it from them.

The total size of the paper, paperboard and packaging market in India is estimated at Rs 30,000 cr or 10 million tpa.

The company currently commands a market share of 22 per cent of the Rs 5,000-crore paperboard and packaging market of India.


The company exports to more than 40 countries and earns a turnover of more than 10 per cent or Rs 300 cr.

"Our exports are positive and we would like to maintain them at 10-15 per cent of our total turnover going forward," said Mr Dhobale.

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