Date:16/06/2006 URL: http://www.thehindubusinessline.com/2006/06/16/stories/2006061602160300.htm

Back Khanna Paper plans Rs 270-cr expansion

Dharini Nagarajan

New Delhi , June 15

The Punjab-based Khanna Paper Mills is embarking on an expansion programme in order to tap the writing and printing segments of the paper industry.

The company has said that it will invest Rs 270 crore to put up a waste paper-based writing and printing paper unit in Amritsar with a capacity of 250 tonne per day (tpd).

Currently, the company has capacity of 400 tpd of writing and printing paper and 300 tpd of duplex board.

Mr Rahul Khanna, Managing Director, said: "Post-expansion, we would have a capacity of 950 tpd of copier paper, which we plan to lunch in the market by September."

Funding

According to him, the company plans to use Rs 80 crore from internal accruals and raise the rest of the money from financial institutions.

Mr Khanna added that the company might also consider an IPO if additional financial aid is required to finance its expansion plans.

Further, the company also plans to invest in setting up a captive power generation plant.

"Work has already started on our new paper plant, which will be set up in the vicinity of our existing unit," Mr Khanna said, adding that the new plant would be commissioned by end of 2007.

The company expects a jump in its revenues after the new plant goes on stream. It hopes to achieve a turnover of Rs 900 crore by 2008-09; it achieved Rs 419 crore in 2005-06.

Khanna Paper exports its products to markets such as Sri Lanka, Bangladesh, and Africa and South America.

Exports contribute 15 per cent to the total production; last year, they accounted for Rs 42 crore of the total turnover.

The company is the first manufacturer in the country to produce high-grade paper from wastepaper.