• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

Chennai , Aug. 13

TAMIL Nadu Newsprint and Papers Ltd may go for a bond issue to fund its Rs 750-crore expansion programme, according to the company's Chairman and Managing Director, Mr P. Rama Mohana Rao.

Addressing shareholders at the annual general meeting here today, he said that the company would be able to generate over Rs 300 crore internally and plans to go for market borrowings for Rs 300 - 400 crore.

Officials said that the company would be taking up a detailed project report and detailed market report for the expansion and the instrument for tapping the market for funds will then be decided.

The company is well set to report a turnover of about Rs 650 crore during the current year (against Rs 539.87 crore in 2002-03.) The export target is also hiked to 36,000 tonnes with an FOB value of over Rs 100 crore against exports of 25,871 tonnes in the previous year, Mr Rao said.

He said that the higher production and turnover targeted were the result of the increased output from existing paper machines which have stabilised following the upgrades costing Rs 140 crore.

The proposed expansion has been driven by the need to modernise the pulp mill, which has to adopt a process that avoids use of elemental chlorine. The capacity of the pulp mill has to be augmented to reduce dependence on imported pulp. The pulp mill alone will cost over Rs 400 crore in the expansion programme, he said.

The expansion will take the production to 3,30,000 tonnes from the existing 2,30,000 tonnes. This will take the production capacity to international standards while its commitment to low cost production will ensure global competitiveness, he said.

The company's flexibility to produce printing and writing paper or newsprint has helped it to adapt to market situations. The outlook for printing and writing paper is optimistic with prices ruling firm during 2002-03 and the trend holding in the current year. Newsprint prices are also looking up with international manufacturers hiking prices, he said.

Tamil Nadu Newsprint has been holding the production of newsprint down as compared with printing and writing paper with the ratio at 12:88 during the 2002-03. The variable cost of producing printing and writing paper has been brought down to Rs 14,417 per tonne from Rs 15,936 in 2000-01, he said.

Though newsprint prices have shown some increase in August the company is not likely to change the production mix radically, according to officials. Printing and Writing Paper offers better profitability and unless newsprint prices increase drastically, production would be kept down, they said.

According to the annual report, the company plans to set up a biotechnology research and study centre to focus on plant, microbial and environmental biotechnology. These will help arrive at solutions relating to pulp and paper industry which depend on plant-based raw materials.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Fiat wage pact

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line