Itc Bhadra Set To Expand Capacity To 5 Lakh Tonne

ITC Bhadrachalam plans to expand capacity at its mill site near Hyderabad to 3 lakh tonne by year 2000 and to half a million tonne by the year 2005.

The company is not relying solely on the domestic market and plans to give a major thrust to exports. It aims to export around 25,000 tonne per annum by 2000-01 from the current level of 9,000 tonne per annum.

According to managing director M P Malliwal, ITC Bhadrachalam expects to sell almost its entire 1,20,000 tonne per annum capacity by March 1999.

Sri Lanka, Bangladesh, Singapore, Egypt, the Middle East, USA and South Africa have been identified as the key export markets for paper and paperboard. Major products exported by the company are woodfree papers, MG poster papers, photocopying paper, coated and uncoated duplex boards and cast-coated paper and boards. With these targets to be accomplished, the company, which is poised to become a subsidiary of the tobacco-to-hotels major ITC Ltd, will emerge as one of the largest single location board producer and a leading player in South Asia.

 

This expansion will provide capability to manufacture world-class coated boards _ both fully bleached and grey back _ in India. Other paper firms such as West Coast, Servall, Global Boards and Balakrishna have also added capacity recently and this is expected to create a surplus in the medium term before demand picks up.

Company sources expect the current excess supply situation to be a very short one. They point out that demand for paper and paperboards is increasing at a compound rate of around 6 per cent and with the postponement and cancellation of virtually all planned investments, the demand-supply balance is expected to be restored rapidly. An increase in per capita consumption by one kg will need additional production of 10 lakh tonne per annum. "The company is therefore undertaking huge expansion plans as large capacities need to be created to fulfil future demands," points out a company executive. The export prospects for paper and paper boards from India may brighten up by 2000-01.