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Paper industry to see high growth

?Organised retail will give a major boost to good quality packaging paper.", says Harsh Pati Singhania, MD JK Paper.

india Updated: Apr 06, 2006 12:20 IST

The paper industry in India is poised to put itself on a high growth trajectory.

The sector is projected to grow at seven per cent thanks to new emerging sectors like retail along with rural education and small office home office (SOHO) segment that are set to fuel the demand for better paper.

The per capita consumption of paper in India (which accounts for 16 per cent of the world population) is one of the lowest at about two per cent as against 18 per cent in China. However, the domestic paper industry is optimistic that it will get a thrust with new initiatives in other sectors.

Harsh Pati Singhania, Managing Director of JK Paper Ltd said, “Organised retail will give a major boost to good quality packaging paper.” “The government’s initiatives on education will lead to usage of more paper,” he said.

Singhania added, “We are positioning ourselves to be the leader with thrust on four segments—map litho (high quality writing and printing paper), photocopy paper, coated paper and packaging paper.” Commenting on the push for paperless office, Singhania claimed that it has proved to be counter-productive.

He pointed that for every one email circulat ed to four persons in an organisation, invariably three of them would take prints of these mails. Further, printers have started entering households which means children who do projects will take print outs.

He added, “If we look around us, a number of examples like these reiterate our confidence that we are in the right business and that this business is ready to see a boom.” The company has also announced some expansion projects for which it has set aside an outlay of Rs 337 crore.

The bulk of it, about Rs 235 crore will be spent on its new project to manufacture multiplayer packaging board at its Central Pulp Mills in Songadh in Gujarat.

To generate resources for the project, JK Paper Ltd recently raised a Rs 100 crore equity by allotting equity shares of Rs 50 crore each to International Finance Corporation, Washington and the Promoter Group at a price of Rs 65 per share on a preferential basis.