J&K Paper plans Rs 1,400-cr expansion | business | Hindustan Times
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J&K Paper plans Rs 1,400-cr expansion

Amid strong signs of the economy recovering, JK Paper is looking to buyout paper mills in the country, as part of a Rs 1,400-crore expansion plan.

business Updated: Jan 10, 2010 21:18 IST
Mahua Venkatesh

Amid strong signs of the economy recovering, JK Paper is looking to buyout paper mills in the country, as part of a Rs 1,400-crore expansion plan.

“We have decided to expand capacity and we are open to both organic and inorganic growth,” Harsphati Singhania, managing director, JK Paper told Hindustan Times.

Singhania, who is president of Federation of Indian Chambers of Commerce and Industry (Ficci), did not divulge details of the acquisition plans.

He, however, said the company would raise Rs 1400 crore through a mix of debt and equity instruments, and make the investments over a period of three years.

JK Paper earned Rs 1,268 crore in revenues in 2008-09. It has already announced plans to add to its current paper production capacity of 2.4 lakh tonnes per annum.

The company is giving final touches to the broad contours of the plan; Singhania said exuding confidence that the paper industry would grow despite rapid computerisation of processes across economic activities.

“There is a huge demand for paper, especially with the literacy level going up and the growth of the economy,” Singhania said.

The paper industry was hit hard as commodity prices peaked last April in the wake of the economic meltdown.

Demand had all but collapsed as customers focused on correcting inventory positions (using existing stocksto keep production lines and marketing activities rolling).

“The industry has gone through some tough times in the last few months due to the low GDP growth,” but it “is gearing up for growth,” he said.