Khanna Paper Mills to open unit in Amritsar

Firm to invest Rs 270 crore in the project

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As part of its expansion plans, Amritsar-based Khanna Paper Mills Private Ltd, the single-largest location plant in India using recyclable paper waste, is putting up a waste paper-based writing and printing paper unit in Amritsar with a capacity of 250 tonnes per day.

The expansion will take the company's capacity from 231,000 tonnes per annum to 313,000 tonnes per annum, with a total project cost of Rs 270 crore.

The project will be funded by internal accrual and institutional loans. Also, the company will soon diversify into producing A4 copier paper, expected to be launched in the market later this year.

Started in 1965 by founder chairman B M Khanna with a 200-kg-per-day sun dry board unit, the company has expanded its capacity to 700 tonnes per day, 400 tonnes of paper and 300 tonnes of board per day.

It has a captive power generation plant producing 27.5 Mw. Also, the company has a capacity of 500 bone dry tonnes per day.

Talking to Business Standard, Chairman Brij Mohan Khanna, said, "The new project is part of our expansion plans and to meet the growing demand of paper in India, we will invest Rs 270 crore in putting up this plant, having a production capacity of 250 TPD. I am hopeful that the new plant will start its production from January 1 2008."

Khanna Paper Mills is an ISO 9001 certified company and registered export house recognised by the directorate-general of foreign trade. The mill is the third largest single-location plant and the largest user of waste paper in the country. It is also one of the leading manufacturers of high quality writing and printing paper and duplex board in India.

The firm's products are exported mainly to Sri Lanka, Bangladesh, and African and South American countries. Exports contribute 15 per cent to the total production. With its expanded capacity, the company is hopeful to achieve a turnover of about Rs 927.88 crore in 2008-09. In the last fiscal the turnover of the company was Rs 425.20 crore, while in 2004-05 it was Rs 297.7 crore. Also, the company is projecting Rs 91.90 as EPS(earning per share) in 2008-09, which is currently Rs 28.70.

In December it was reported that the firm would come up with an IPO, which Khaitan said "is in the pipeline".

The company imports waste paper. Commenting on the benefits, Khanna added, "Being a recycled product it is environment-friendly, requires less power and hence creates a strong economic and environmental sense."

He added that for making 1 tonne of paper, 17 trees were felled, so by utilising waste paper for manufacturing paper they were saving trees to a great extent.

"With a strong environmental policy, we are the market leader in the manufacture of paper board out of recyclable paper, in India. We offer our customers a varied range of products like coated wood-free recycle range of Duplex board, Ecobrite, uncoated wood-free paper etc, surface sized Optima Maplitho Paper."