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Indian Paper Industry
 
  Paper Industry is regarded by Govt. of India as one of the 35 high-priority industries
  Number of Paper Mills in India - 515
  India's installed capacity in 2006 - 6.7 million tons.
  Average annual per-capita consumption in India in 2006 is only 6 kg, compared with 42 kg in 
    China, 55kg in the world as a whole. This low per-capita consumption infers that enormous scope     exists for the consumption to rise in India in future.
  Indian Paper industry is the 15th largest in the world and provides employment to 1.3 mn people
    in the country contributing Rs.25 billion to the Government.
  Being a priority sector industry, foreign collaboration and foreign equity up to 100% receive
   automatic approval by the Reserve Bank of India.
  With no major paper mills in neighboring countries like Sri Lanka, Nepal & Bangladesh, India can
    become the prime regional player.
 

Demand Estimates
 
  During 2005-06, Paper prices increased by 17-20% and demand grew by 6.3%
  As per CRIS-INFAC reports, overall demand for Paper & Paperboards in India is expected to rise
   by 6-7% pa due to increased literacy, newspaper readership and business & commercial activities
   and is expected to cross 8 mn tpa by 2010
  Annual demand in India is projected to grow from 6.8 million tonnes in 2006 to 8.2-8.5 mn tpa in
   2010 and to 11 mn tpa in 2015,thus keeping pace with overall Industrial segment growth of 7-8%
  Global demand for Writing & Printing segment is expected to grow at 1-2%
  As per FAO & Jaakko Poyry forecast Global demand in 2010 is around 420-425 million tonnes
  Current estimate is 385 million tones
 
Demand is expected to grow at :
  Writing & Printing Papers at 5-5% pa.
  A4 Copier Paper at 14-15% pa
  Coated Papers & boards at 20% pa and
  Newsprint at 10% pa

 

Project

Capacity: Manufacturing facility for 2.0 lac TPA

Product: Copier and Writing & Printing grades

Location: Bayyaram, Tallapudi Mandalam, near Kovvur, West Godavari District, Andhra Pradesh, India.

Estimated Project Cost: Rs.1600 crores (US $ 330 millions)

Source of Fiber: Primary & Secondary Fiber through import tie-up with M/s.Elof-Hansson, Sweden.

Future Strategy: Add pulping capacity by tying up indigenous Raw Material sourced through allotment of forest wood by the GoAP, Private suppliers and by implementing Social Farm Forestry Scheme.

Project Highlights & Social Benefits

  • First SEZ in Indian Paper Industry

  • Provides direct and indirect, equal-opportunity employment up to 10,000 persons

  •  Substantial contribution to the Government exchequer by way of taxes and duties

  • Increased utilization of Kakinada Port facility through bulk imports and exports.

Location Advantages:

  •  Project ideally located at Bayyaram hamlet of Tadipudu Village, Tallapudi Mandal, near Kovvur, West Godavari District, Andhra Pradesh State, India.

Availability of:

  • Water, within 5 kms from the perennial Godavari River

  • Power

  • Coal

  • Manpower

  • Proximity to National highway, Railway Station and 100kms from Kakinad Port

Govt. Support and Assurance

Memorandum of Understanding (MoU) : Memorandum of Understanding (MoU) signed between GoAP and Whitefield Paper Mills Ltd. on 27th March, 2006 with GoAP assuring full support on the below mentioned aspects.

  On GoAP recommendation, Govt of India declared this project as a Special Economic Zone (SEZ)
   on 21st August, 2006
  GoAP, Industries & Commerce (IP) Department issued Order vide G.O.Rt.No.323 dated.30th May,
    2006 confirming the MoU and the concessions & benefits.
  GoAP, Revenue (Assignment VII) department issued Order vide G.O.R.T.No.1227 dated 30th May,
    2006 alienating land to the extent of 203.00 acres & 68.35 acres (Total 271.35 acres) at
    Tallapudi Mandal, West Godavari District for setting up the Paper Mill Project
  GoAP handed over possession of the land to the Company on 12th July, 2006. GoAP has assured
    alienation of another 229 Acres of land in next phase for housing and other purposes.
  GoAP has assured grant for all subsidies, incentives, benefits and other support/assistance as
    required by the proposed Paper Mill, under the Industrial Investment Promotion Policy 2005-10.
  GoAP has appointed one Escort Officer specifically for expeditions implementation of the Project.
  GoAP has permitted water drawal from Godavari River
  GoAP has assured support for obtaining all other clearances under 'Single Window System'
  Company has received IEM Clearance from Government of India.

 

 Raw Material, Pulp & Marketing

 

  Tie-up with Elof Hansson, Swedon for total fiber requirement from Europe, North & South
    America, New Zealand and Far East Asia
  Buy-back of finished production
   Assistance in Engineering & Technology, Procurement, and Supply of Plant & Machinery with
    performance guarantees and Suppliers credit

About Elof Hansson Group:

  • An International Trading House in Forest, Industrial and
    Consumer products for more than a Century
  • Elof Hansson, India is actively engaged in selling machinery &
    consumables and pulp & waste paper to the Pulp and Paper
    Industry.

Water, Power & Fuel Requirements

 

Water:

  • Water draw up to 26 MGD from Godavari River

  • Project location at 5 kms. from Godavari River

 Power :

  •  Power requirement will be around 27 MW.
    Power plant of 40 MW is planned for the Project

  • AP Transco grid power during project construction stage

  • Sell surplus power to AP Tranco

Fuel :

  •  If coal is used, requirement about 700 TPD

  • If Natural Gas is used, requirement about 0.10 MMSCMD

  • Gas Authority India Limited (GAIL) agreed to supply required Natural Gas by 2009 - 10

Alternative Strategy: Natural Gas pipeline of ONGC passes through at a distance of 10 KMs from the proposed site location.  Government of Andhra Pradesh has recommended to allocate natural gas from States’ Quota.

Project Cost and Means of Finance

A.

            Particulars

Amount
 
    Land & Site Development

44.25
    Building & Civil Works

154.28
    Plant & Machinery

1094.87
    Engineering Services

29.60
    Miscellaneous Fixed Assets

55.12
    Preliminary & Preoperative Exp.

38.36
    Interest During Construction

77.78
    Working Capital Margin

36.99
    Contingency

68.91
TOTAL

1600.16

 

B.

         Means of Financing      

 
 
  • The project cost is proposed to be met through Equity of about the INR 160.16 Crores and FC Debt of about INR 1440 Crores.
  • Equity:
    Promoters would be contributing about INR 160.16 Crores by way of Equity..
  • Debt:
    External Commercial Borrowings (ECB)/ FC Loan of USD 300 million is being tied up for the entire amount of Debt..

 

 

Time frame for Project Implementation
 

 

Sr. No.

Activity

 Date of Commencement Expected Date of Completion

1

Acquisition of Land

 

Completed

2

Land Development

July’ 06

Completed

3

Building construction

March, 2012

April, 2012

4

Machinery Indent

March, 2012

March, 2012

5

Machinery Delivery

May, 2012

Sep, 2013

6

Arrangement for Power

September’ 07

Completed

7

Arrangement for Water

October’ 07

Completed

8

Overhauling & Erection

Sep, 2013

Nov, 2013

9

Recruitment of manpower

July, 2013

Sep, 2013

10

Raw Material Purchase

Oct, 2013

Nov. 2013

11

Trial Production

Dec, 2013

Jan, 2014

12

Commercial Production

Feb, 2014

Feb, 2014

13

Release of first batch of finished goods

March, 2014

March, 2014

                                                                  

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