ITC to expand paperboard division's capacity
Multi-business conglomerate ITC's Paperboards and Speciality Papers Division (PSPD) plans to expand its manufacturing capacity by one lakh tonne per annum at an investment of Rs 600 crore, a top company official said.
The division is also expected to improve its bottom line in the current fiscal significantly, due to improved market conditions and cost cutting measures being taken, ITC Ltd Division Chief executive Sanjay Singh said.
The present capacity of PSPD is 4.6 lakh tonne per annum which would go up to nearly 5.6 lakh tonne on completion of expansion plans.
"This is in addition to the new manufacturing facility we plan to set up near the existing plant in Andhra Pradesh. We are putting up one more board manufacturing machine in the existing plant.
"The total investment will be Rs 600 crore," Singh told PTI adding the new capacity addition will be completed by October next year.
Replying to a question he said the division may see a jump in margins this fiscal due to opening up of paper market and the cost cutting measures being taken.
"The division is expected to save Rs 20 to Rs 25 crore on these measures. This itself may reflect on the bottom line. We may also maintain the last year's growth rate, as far as top line is concerned, in this financial year also," he said.
PSPD reported a sales growth of 12.9% at Rs 3,507 crore in FY11, while the earnings before interest and taxation grew by 19.7% at Rs 819.2 crore.
Referring to media reports that ITC is in talks with BK Birla Group for acquiring their loss making paper entity in Nainital, Singh said there was no such proposal on hand.
However, he added that the company is looking at acquiring companies with installed capacities of more than one lakh TPA.
Century Textile's paper and pulp plant in Nainital has a capacity of 2 lakh tonne per annum, manufacturing writing and printing paper and rayon grade pulp.
Another ITC official said there were some discussions in the matter six months, but as of now there is nothing.