Emami to augment high-end packaging paper capacity

Emami Paper Mills, which recently diversified into high-end packaging paper, will invest Rs.1,000 crore in three years to double its production capacity of 1.32 lakh tonnes per annum in the segment.

The company earlier this year set up a new state-of-the-art paper packaging plant at its existing facility here with an investment of Rs.1,000 crore. 

"The demand for high-end coated multi-layered paperboard in the country is seven lakh tonnes currently and growing annually by over 15 percent. At present, our capacity for high-end packaging paper is 1,32,000 tonnes per annum. In the next three years, we will double the capacity with an investment of Rs.1,000 crore," Emami Paper executive director P.S. Patwari said here.

The Balasore's board unit, commissioned in April 2015, will begin commercial production from December.

Competing with ITC, JK Paper and Century in the segment, the company asserted its fortunes will not be affected when Tamil Nadu Newsprint and Paper limited's (TNPl) 2-lakh tonne capacity multi-layer double coated board plant in Tamil Nadu becomes operational by year-end.

"TNPl's commercial production is still several months away. And the market is growing by over 15 percent. People are now going for better packaging - be it fast-moving consumer goods, white goods or others products. So new players' entry will not affect us," Emami Group director Aditya Agarwal said.

Agarwal said from 2016-17 onwards, at least 60 percent of the company's revenue will come from high-end packaging paper segment.

Despite being the country's largest newsprint manufacturer, Emami Paper said it will not invest in the segment and continue to focus on packaging paper.

"The country's total consumption of newsprint is 27 lakh tonnes per annum, of which only 10 lakh tonnes is produced domestically and the rest imported. 

"local tax is levied on domestic newsprint but there is no such levy on imported newsprint. Thus, Indian newsprint industry is facing a crisis," said Patwari.

Patwari said the government's "unfavourable" outlook is pushing the Indian newsprint makers to the brink.

"Nearly one third of the newsprint mills have closed and companies are diversifying. We have tried to raise the issue with the government but to no avail," he said.