The Andhra Pradesh Economic Development Board (APEDB) on Wednesday signed a Memorandum of Understanding (MoU) with the Asia Pulp & Paper (APP) to develop a five million tonnes per annum greenfield pulp and paper plant in the state's Prakasam district.
The MoU was signed by J. Krishna Kishore, Chief Executive Officer, Andhra Pradesh Economic Development Board (APEDB) and Suresh Kilam, Executive Director, Asia Pulp & Paper, in the presence of Andhra Pradesh Chief Minister N. Chandrababu Naidu, read a statement.
The project will be implemented in two phases and is estimated to provide direct employment to 4,000 workers and indirect employment to about 12,000 workers. It is also expected to provide improved incomes for over 50,000 pulpwood farmers in the region, the statement added.
APEDB is responsible for sustainable economic growth through trade, investments, partnerships and collaborations in the state. Through this MoU, APP will set up a greenfield pulp and paper manufacturing unit pulp, paper and board, subject to regulatory approvals and other requirements.
Spread over an area of 1,000 hectares (2,471 acres), the total investment of the project amounts to approximately Rs 24,000 crore (USD 3.5 bn), making it one of the biggest Foreign-Direct Investments (FDI) in the country till date.
"The Chief Minister has always advocated for the development of sustainable sources of enhanced income for the farming community and this project will significantly help achieve this goal," the statement read.
The project is further aimed at generating an "indirect employment in ancillary services, such as logistics providers for inbound and outbound transport of raw materials and finished products, maintenance providers for the plant, waste paper suppliers, chemical suppliers, converters and distributors and would ensure marked improvement across the value chain of the Indian paper industry."
In addition to Prakasam district, the project will also provide a fillip to surrounding districts such as Nellore, Guntur, Kadapa, and Kurnool, through sustained plantation income and improved access to education, infrastructure, transportation, healthcare among others.
Andhra Pradesh was selected due to important considerations such as ease of doing business, support from the state government, availability of quality land parcels and water, proximity to raw materials, and streamlined infrastructure, the release stated.
"Prakasam district has a high density of wood plantation and forms synergies and linkages for the pulp and paper industry. Furthermore, Eucalyptus is extensively grown in this district, providing ready availability of raw material," the statement added.
Speaking on the same, Naidu said, "APP's decision to invest in Andhra Pradesh is a clear testament to our government's efforts at attracting investments and confirms higher levels of satisfaction and confidence on our business environment, from international investors. This investment would not only create thousands of jobs and opportunities for farmers, but will help in upliftment of society, creation of better infrastructure, increased market linkages and overall development and happiness among the people of Prakasam, Nellore, Srikakulam and other areas in Andhra Pradesh."
On behalf of Asia Pulp &Paper, Executive Director Suresh Kilam said "As India continues to rapidly develop, demand for pulp and paper products will grow to keep pace. It is vital that we meet this demand in a sustainable and socially responsible way. In developing the Ramayapatnam mill, APP will draw heavily on our forestry expertise in Indonesia to ensure that we continue to meet all our commitments under our Forest Conservation Policy."
Kilam added, "Andhra Pradesh offers a robust pro-growth, pro-investment ecosystem with good logistical capabilities and access to sustainable pulpwood plantations. We are grateful for the continued assistance from the State Government, in particular, the APEDB, in realising this project.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)