Key takeaways of the meeting

Paper production in the first four months of current fiscal i.e. April-July 2008 was 85456 MTs. And the capacity utilisation was about 107.9%.

The imported newsprint prices during April –Jun 2008 increased to USD 750-800/ MT from USD 600-650/ MT till Dec ’07. Against this the domestic newsprint prices was Rs 35000/ MT during April-Jun 2008 compared to Rs 28000-29000/ MT till about Dec ’07. Inspite of rise in newsprint prices the company produced only Printing & Writing Paper during the first quarter of current fiscal as newsprint production from virgin fibre is not economical.

In May 2008, the company completed Mill development plan, under which the bleaching sequence has been changed from conventional chlorine bleaching to environmentally benign elemental chlorine free bleaching, in-house pulp production capacity augmented to 720 tpd (from 520 tpd) and the paper production capacity was augmented to 245000 tpa from 230000 tpa.

Life Cycle Extension of Paper Machine I will be completed by Feb 2009.

The company will take up Mill Expansion Project during the current year and will be complete it by June 2010. Under the Mill Expansion Plan, the company will install a state of the art new paper machine of a capacity of 15500 tonne per annum will be installed to increase the paper production capacity to 400000 tonnes per annum. The in-house pulp production capacity will be increased to 880 tonnes per day.

Setting up of 400 tpd mini Cement Mill at an estimated cost of Rs 45 crore is only with the prime focus on waste management not an unrelated diversification. Since the mini cement plant will use lime sludge generated in the process of paper manufacturing and with fly ash and some line stone that could be converted into a salable commodity the company is venturing into cement. It does not have any intention apart from that.

Similarly setting up of IT Park on the 63.5 acres of land owned by the company at Ambattur Industrial Estate under BOOT basis is to get some return on the land. For the first EOI for setting up an IT part under BOOT basis there is no good response, but for the second one there is 3 responses. Since the rentals for IT space in an IT park is falling in Chennai, the company is rethinking of proceeding with the project.

Normal capex planned for the current fiscal will be Rs 30 crore.

Lower exports in 2007-08 are largely on account of lower realisation in exports compared to domestic realisations on account of rupee appreciation. The company will export about 52000 tonne as rupee depreciates.

With the economy growing at the rate of 8-8.5% and the literacy level steadily going up, the demand for newsprint and printing & writing paper is on the rise. The growth rate is projected at 5% for newsprint, 7-8% for non-surface sized papers, 9-10% for surface sized papers and 15% for cut size papers.

Paper prices have increased in international market in tandem with pulp prices. Similarly with steep rise in cost of fuel, chemicals and other inputs, the paper prices have increased by Rs 2000/ MT in July 2008.