Tamil Nadu Newsprint and Papers Limited (TNPL) plans to invest Rs 370 crore, which includes setting up of a cement plant. The state-run company had said as part of derisking its business the company is planning to diversify into cement and paperboard manufacturing. The company, which started as a manufacturer of newsprint have decided to stop production of newsprint.
The company also earmarked Rs 200 crore towards setting up tissue paper manufacturing facility.
“As newsprint prices are volatile and production of newsprint from virgin fibre is uneconomical, the company has stopped production of newsprint. With consistent economic growth and increasing literacy levels, the demand for printing and writing paper is estimated to grow at 8-9 per cent per annum,” said N Sundaradevan, chairman, TNPL.
T K Ramachandran Managing Director TNPL said: “the proposed Rs 370 crore investment include to set up a deinking plant with a capacity of 300 TPD at an investment of Rs 175 crore, which is expected to go on stream by March 2012, Rs 135 crore to revamp power equipment and Rs 70 crore towards setting up 60 TPD plant.
"The cement will be branded as TPL's Cement and it would cater to five districts around the company's existing plant," said Ramachandran. TNPL is setting up a high grade cement manufacturing facility with a capacity of 600 TPD in the Mill premises, which is under implementation. The project will be completed by December 2011 and the cement made will be available in the market from January 2012.
The company has set a paper machine to increase the production to four lakh tonne per annum (TPA) from the existing 2.45 lakh TPA. The machine is being operated in full capacity.
The company has proposed to install a 100 TPD tissue paper machine in the existing paper mill site a capital outlay of Rs 200 crore. tissue paper has a strong domestic and export market. The project will be taken up for execution during the current year and completed by March 2014.
Speaking about the industry, Sundaradevan said, demand for paper during the year was good. The domestic market witnessed improvement in offtake and prices. However pulp and coal prices have increased around 20 per cent and 22 per cent respectively during the year compared to the previous year, this has puhsed the cost of production of paper upward and narrowed down the margin.
Exports rose by 28.5 per cent to 64,776 MT from 50,394 MT, a year ago. The company will take efforts to develop pulpwood plantation in the effluent water affected lands on the Noyyal river bank in Tirupur, Erode and Karur Districts. As the first step the company will select salt tolerant pulpwood species and raise pulpwood planation on trial basis in 1000 acres.
The plantation to be raised under scienctifc method, can improved the soil fertiliting and conver the barent lands into cultivable lands incourse of time.
The company will pay Rs 4000 per acre a year for six yeas as lease rental to the farmers participating in the scheme. After six years, the farmers at their option can renew the agreement. On successfulimplementation the scheme will be extended by 3000-5000 acres every year, he said