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ITC signs pact to acquire Bilt paperboards unit
Business Standard - 08 Nov 2003

ITC Ltd signed an agreement today to acquire Bilt Industrial Paper Company’s (BIPCO) paperboards business, located near Coimbatore, for a consideration of Rs 233 crore. The money will be paid to BIPCO over five years.

The acquisition will provide ITC, the largest paperboard company in India, an additional 65,000 MT per annum capacity to service markets in India and overseas. It already has an installed capacity of 225,000 MT per annum, on which it produced 235,000 MT of paper board last year.

In addition to the acquisition, sources said, ITC is spending another Rs 275 crore to expand its existing capacity by 33 per cent to 300,000 MT per annum. The acquisition as well as the expansion will take ITC’s total paperboard manufacturing capacity to 3,65,000 MT. ITC’s paper business was earlier operated through a separate company called ITC Bhadrachalam which eventually got merged into ITC Ltd. The paper division recorded sales of around Rs 875 crore in 2002-03.

A statement issued by the company’s public relations agency said that the transaction is expected to be completed over the next 45 days. ITC’s existing paperboards facility is already operating at full capacity.

This 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 statement added.

The market for paperboard in India has been growing at the rate of 10 per cent, even as the total paper market is growing at around 4 per cent.

Y C Deveshwar, chairman, ITC Ltd said that "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."