ITC Ltd on Friday announced the acquisition of the
paperboards undertaking of BILT Industrial Packaging Co Ltd (BIPCO) near Coimbatore,
adding 65,000 tonnes to its own capacity of two lakh tonnes.
According to the agreement signed on Friday, ITC will pay
BIPCO Rs 233 crore over five years. The transaction is expected to be completed over the
next 45 days.
"This acquisition strategically positions ITC to
leverage its world-class capability in paperboards towards realising the vision of
becoming a leader in the Afro-Asian region," a company statement said, quoting YC
Deveshwar, chairman, ITC.
Kolkata-based ITC’s existing paperboards facility is
already operating at full capacity, and the acquisition will enable ITC to service the
growing demand for high quality paperboards in the domestic market, as well as to widen
its product footprints in the export markets, the company said.
The paperboards and specialty paper business is an
important segment for ITC. With the company having invested heavily in pulp-making, poly-
extrusion and super-calendering facilities, value-added products account for nearly half
the total paperboard sales.
The Tribeni Tissues division and Bhadrachalam Paperboards
division were integrated as the paperboards and specialty papers division during 2002-03.
During the year, the combined entity reported a production of 2,33,574 tonnes.
With India’s total installed capacity adding up to one
million tonnes spread across 100 players, ITC is betting on integration, scales and
quality to grab market share. According to the company, India’s value-added
paperboards segment is expected to grow by over 20 per cent a year, against the six per
cent projected for the paperboards industry as a whole.