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JK Paper lines up Rs 650 crore for investment, capex

The proposed project entails capacity expansion and efficiency improvement

T E Narasimhan  |  Chennai 

paper, industry, investment, JK Paper

JK Paper Ltd (JKPL) has lined up an investment of around $100 million (Rs 650 crore), part of which will be accounted for by the International Finance Corporation (IFC) putting in around $50 million.

is a leading Indian producer of office paper, packaging boards, printing and writing paper, and specialty paper. However, could not be reached for comments.

The proposed project entails capacity expansion and efficiency improvement, capital expenditures at the two existing plants, and debt refinancing.

The IFC’s investment aims at improving the company’s productivity and restructuring its balance sheet.

The proposed investment is in the form of secured non-convertible debentures (NCDs) of up to Rs 325 crore ($50 million equivalent). The project locations are the company’s two plants in Odisha and Gujarat. The project will support the company’s efforts to make its plants more energy-efficient by reducing the usage of water and coal.

In addition, the project supports the company, which now plants more trees than it fells. JK Paper has two integrated pulp and paper facilities: The Central Pulp Mill (CPM), located at Fort Songadh near Surat in Gujarat, and the JK Paper Mill (JKPM), near Rayagada in Odisha.

The current production capacity at the CPM is 160,000 tonnes per annum (tpa) of paper and paper board. The JKPM has a capacity of 295,000 tpa of paper. 

New Cash Flow
is a leading Indian producer of office paper
•It makes boards, printing and writing paper, and specialty paper
•The fund will be used in capacity expansion and efficiency improvement, capital expenditures at the two existing plants, and debt refinancing
•IFC’s investment is in the form of secured non-convertible debentures of Rs 335 crore
•This  will support the company’s efforts to make its plants more energy-efficient by reducing the usage of water and coal
At the CPM, about 26,000 tpa of bamboo is purchased from tribal villages that have been given bamboo harvesting rights by the Gujarat Forest Department. Further, about 202,000 tpa of wood (eucalyptus, casuarina and subabool/leucaena leucocephala) is procured directly from farmers engaged in farm forestry at a guaranteed fixed price purchase basis at mill gate. The plant needs 250,000 tpa of wood and the shortfall is made up by importing pulp. The CPM purchases wood from about 2,500 farmers.

At the JKPM, no bamboo is procured or harvested. Previously, the JKPM used to undertake bamboo working/harvesting in forests under a bamboo harvesting concession from the Odisha Forest Department.

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