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ITC to ramp up paper arm capacity
Business Standard - 11 Jul 2003

Ishita Ayan Dutt

ITC will be expanding capacity of its paper and paperboards division by 36 per cent to 300,000 tonne, over the next one year.

Ashish De, vice-president (technical) paperboards and specialty papers division, said the present capacity was around 220,000 tonne which would be enhanced to 300,000 tonne by next year. Industry sources said that typically, investment in such an expansion will be in excess of Rs 350 crore.

The capacity expansion will be undertaken keeping in mind the growth in the domestic market. Last year, the sale of value added paperboard alone grew by around 62 per cent.

De said the packaging industry was directly proportionate to growth in GDP. While the paperboards industry was expected to grow at 6-8 per cent, the growth in the value added segment would be more than 10 per cent.

The growing sophistication of the Indian consumer was expected to accelerate the demand for high quality packaging for branded goods and the resultant demand for value added paperboards.

Moreover, the rural market is also set to stage a dramatic growth and with increased penetration in the sector from the FMCG segment, the paper and paperboards division was also expected to grow.

According to De, the potential sectors for growth were pharmaceuticals, food, bakery, high-end personal care products. The company planned to target these sectors with its food grade paperboard branded Cyber XL Pack.

Growth will also come from the export markets such as South East, Middle East and East Africa primarily. The product footprints now extended to Sri Lanka, Bangladesh, Malaysia, South Africa, Bulgaria, UAE, UK and Iran.

However De said not much growth was expected from the developed countries as the markets were already saturated there. Around 20 per cent of the total production was being exported and exports during 2002-03 touched nearly Rs 100 crore.

Also, the Asian region including Japan was poised to become a net importer of paperboards over the next few years.