JK Paper plans to expand capacity by 1.5 lakh tonne

JK Paper, country's leading paper manufacturer is planning to expand its capacity in the writing and printing segment by 1.5 lakh tonne.

"We want to expand in the writing and printing segment as the market is expanding, and there is a buoyant demand driven by greater focus on education," Harsh Pati Singhania, managing director, said.

The Indian paper industry needed to expand its capacity from about 65 lakh tonne to at least 100 lakh tonne by 2010, he said.

While Singhania did not mention the size of investment planned but said such an expansion would cost around Rs 600-700 crore.

The company is also studying the possibility of installing a pulp mill along with the new facility. The new capacity is likely to be a brownfield expansion to the company's paper unit either at Rayagada (Orissa) or at Sonagadh (Gujarat).

JK Paper currently has an installed capacity to produce 1.8 lakh tonne writing and printing paper, and is installing a Rs 250-crore facility to manufacture 60,000 tonne of multi-layered packaging board at its Central Pulp Mills, Songadh.

The packaging board facility is expected to become operational by April. With the growing demand in this segment, the company hopes to quickly establish its presence in the market.

"The domestic retail boom will help driving demand for better quality packaging material", said Singhania.

On rising paper prices, he said the rise in cost was primarily on account of increased raw material prices and that the uptrend was there to stay.

In the 2005-06 (July-June), the company registered a turnover of Rs 844.62 crore and in the half year ending December 2006, it saw a revenue of Rs 470.21 crore. It sold 1.97 lakh tonnes paper last year.