TNPL to diversify, plans Rs 370-cr investment

Tamil Nadu Newsprint and Papers Ltd (TNPL) plans to invest Rs 370 crore, diversifying into cement and paperboard manufacturing to derisk its business.

The company, which started as a manufacturer of newsprint, has now decided to stop manufacturing newsprint. “As newsprint prices are volatile and production of newsprint from virgin fibre is uneconomical, the company has stopped production of newsprint," according to N Sundaradevan, chairman, TNPL.

Speaking at the TNPL's AGM on Thursday at Chennai, he said the demand for printing and writing paper was estimated to grow at 8-9 per cent per annum on the back of consistent economic growth and increasing literacy levels. The company also earmarked Rs 200 crore towards setting up tissue paper manufacturing facility.

The proposed Rs 370-crore investment would include a de-inking plant with a capacity of 300 tonnes per day at an investment of Rs 175 crore, which is expected to go on stream by March 2012, Rs 135 crore to revamp power equipments and Rs 70 crore towards setting up 60 TPD plant.

To make use of the large quantities of lime sludge and fly ash generated in the process of manufacturing of paper, TNPL is setting up a high-grade cement manufacturing facility with a capacity of 600 TPD in the mill premises. Company managing director T K Ramachandran said the cement would be branded as TPL's Cement and would cater to five districts around the company's existing plant. The project will be completed by December 2011 and the cement made be available in the market from January 2012.

The company has also set up a paper machine to increase the production to 400,000 tonne per annum (TPA) from 245,000 TPA, and is being operated in full capacity, according to A Velliangiri, deputy managing director, TNPL.

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.