The Hindu : Business : BILT to invest Rs 1,200 crore

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Saturday, Sep 30, 2006
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BILT to invest Rs 1,200 crore

Staff Correspondent

Negotiates with the State Government for putting up pulp plant

MUMBAI: Ballarpur Industries Ltd. (BILT) has signed a memorandum of understanding with the Maharashtra Government for its proposed brownfield expansion of its paper plant at Bhigwan in Maharashtra.

Under the MoU, BILT will invest Rs. 1,200 crore in two phases to expand the capacity of the plant in Bhigwan from 1.25 lakh tonnes to three lakh tonnes annually. The plant makes coated and uncoated paper.

In the first phase, BILT will invest Rs. 500 crore, taking the capacity up by 1.40 lakh tonnes and this will be completed by June 2008. Work on the second phase will commence in 2010, involving an investment of Rs. 700 crore and raise capacity by 1.60 lakh tonnes.

Addressing the media here on Friday, Gautam Thapar, Chairman, BILT, said, "we have now a market share of 45 per cent in coated paper and after this project, our share will go up to more than 50 per cent.'' The company is negotiating with the State Government for investing Rs. 800 crore in a pulp mill to source pulp for the paper units. At present, the company sources its pulp from Indonesia.

It is in the process of tying up its acquisition completed earlier this year when it acquired the Malaysia-based Sabah Forest Industries for a consideration of $261 million.

This is expected to add 1.40 lakh tonnes of paper and 1.20 lakh tonnes of pulp capacity to BILT and will give the company access to 2.89 lakh hectares of forest land.

According to BILT Managing Director, R. R. Vederah, a group company, BILT Power, in consortium with Crompton Greaves has won the bid to set up a 100 MW power plant at Mehan, entailing an investment of Rs. 500 crore. The company expects to complete the work in 36 months. It is also setting up a power plant in Bhigwan, which will initially have a capacity of 30 MW but will eventually go up to 100 MW at a cost of Rs. 450 crore.

The foray into the two power projects will entail an investment of around Rs. 1,000 crore for BILT. Both will be coal-based power projects and discussions are on with Central and State governments for linkage support. BILT at present uses a mix of imported and domestically sourced coal. BILT has a 17 per cent share in the Indian writing and printing paper market and has five paper mills including one each in Orissa and Haryana and three in Maharashtra with a capacity of 4.67 lakh tonnes of paper and a pulp mill in Andhra Pradesh with a capacity of 99,000 tonnes.

The company has targeted a turnover of Rs. 4,000 crore and a paper and pulp capacity of one million tonnes by 2010.

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