Jk In Rs 800cr Plan For Paper Unit

The JK Corp has chalked out an ambitious Rs 800 crore expansion plan for its group company, JK Paper Mills, located in the backward Koraput district in Orissa.

The expansion programme envisages taking the installed capacity of the paper unit from 75,500 tonnes to 1,60,000 tonnes per annum by 2000.

According to company sources, the expansion is being carried out in two phases: The first phase consists of balancing existing equipment and conducting slight modifications wherever necessary, while the second phase envisages installation of one more machine to the production line. The unit at present has five machines.

While the first phase is expected to take the capacity of the plant to 95,000 tpa at an estimated cost of Rs 200 crore, the second phase, which will cost Rs 600 crore, will increase the capacity further to 1,60,000 tpa.

Similarly, the product mix of the company will see a change following the expansion. While the main products of the company now are JK Bond, JK Copier, JK Compac, Chancellor Bond, Maplitho and Airmail papers, there will be more stress on production of lightweight coated paper after the implementation of update plan, sources said. The company, however, anticipates problems in getting adequate raw material to meet the higher output targets following the expansion. Only 40. percent of the raw material is now procured from the state government through the state forest development corporation.

The rest is being purchased from the open market in Assam, Andhra Pradesh and Uttar Pradesh, said Jagat Parija, chief manager, JK Corp, adding the cost of transporting the raw material from outside the state to the plant site is proving to be a financial drag on the margins. He further said with the conversion rate in the paper industry being 2.7 tonne of raw material for one tonne of paper, there will be a quantum jump in the requirement of raw material following the expansion.

To meet this demand, the company has decided to approach the centre with a proposal for permission to develop captive plantation in forest land in Koraput district.

The development of captive forests by private sector industries was banned in the 1988 Forest Act.

But with the government now showing signs of giving some concessions to industries depending on forest produce, the time is now ripe to make such a move, the official said.