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ITC to start plant in Uttaranchal
Economic Times - 19 Sep 2006

ITC Ltd’spackaging and printing division is setting up a greenfield cartonboards and flexibles unitin Uttaranchal. The proposed venture will be in addition to the company’s plans toupgrade the existing Chennai unit to further strengthen its position in value addedcartonboards and flexibles.

The proposed expansion-cum-upgrading planwill entail an investment of nearly Rs 200 crore in the financial year 2006-07. While thegreenfield facility for cartonboards and flexibles in Uttaranchal will involve an outlayof about Rs 100 crore, the company has decided to invest a similar amount at itsTiruvottiyur unit in Chennai.

Though top company officials remainedtightlipped on project details, including the percentage increase in capacity postexpansion, sources said efforts were on to make the project operational by March 2007. Thetobacco-to-hotels major has already placed order for machines to equipment suppliers likeBobst Group, the source said. The new unit will augment capacities in cartonboards andflexibles. Upgrading the Chennai unit will further strengthen the company’scapabilities to offer a range of value-added packaging solutions for the food &beverage, personal products, cigarette, liquor and IT packaging industries.

At present, ITC Ltd annually converts over35,000 tonnes of paperboards into value added packaging. Elaborating, sources said themove will help ITC service surrounding geographies better as well as give its foodsbusiness a two-fold fillip:

  • The packaging unit will be set up adjacent to ITC’s first foods factory. Since both units are expected to become operational around the same time, the new packaging unit will ensure just-in-time supply of packaging material.

  • The proposed unit signifies the emphasis on flexibles in line with the requirements of ITC’s Foods as well as other businesses.

ITC Ltd also derives additional advantagesfrom the synergy between its packaging and paperboards businesses.

The company’s elemental chlorine free(ECF) unit provides its packaging business a competitive advantage in servicing internaland external requirements in the foods segment.

Once the greenfield plant becomesoperational, the two packaging units will be able to meet the entire packaging requirementof its FMCG business jointly. Besides adding value to its own FMCG business by usinginnovative packaging, upgrading and the greenfield unit will also enable the company toleverage these facilities for its overseas and domestic customers exports as well as earnadditional revenue.

Apart from foods, ITC Ltd is one of theleaders in cigarette and liquor packaging in India. It supplies packaging to cover 70billion cigarettes a year domestically and for 15 billion cigarette sticks a year,targeting the export market. It is also one of the largest supplier of liquor mono cartonsin the country.