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.