September 29, 2014
Seshasayee Paper and Boards considers investing about Rs. 480 crore to expand raw material capacity and captive power generation. With the increase in paper pulp, paper production capacity will go up to 275,000 tonnes from the present 190,000 tonnes in its two mills in South Tamil Nadu.
With this expansion, the company focuses on increasing in-house pulp production to cut the imports. “The primary objective of the investment is to improve cost-competitiveness,” said N Gopalaratnam, Chairman, Seshasayee Paper. Besides, this investment also envisages captive power generation.
The project cost at the Erode unit will be about Rs. 300 crore with paper production increasing to 165,000 tonnes a year from the present 120,000 tonnes. The company will invest Rs. 180 crore at the Tirunelveli unit to expand paper production to 1.10 lakh tonnes from about 70,000 tonnes now. It also aims adding equipment to enable production of high-end printing papers.
With the proposed investment, hardwood pulp plant is set to increase its capacity to 145,000 tonnes from 115,000 tonnes. A 15 MW coal-based power plant will be added, taking the total captive capacity to 55 MW.
A chemical recovery island with a capacity of 630 to 950 tonnes a day will also be set up. A plan to modernize the bagasse pulp and waste water treatment plants is also in place. An 18 MW coal-based power plant will be established with the present 6 MW biofuel plant treated as a standby.
The deinking plant at the Tirunelveli unit will be restarted enabling a recycle of 1.32 lakh tonnes of used paper annually. This unit will also use surplus pulp from Erode.
The company considers funding about a third of the expansion cost from internal accruals and the balance from bank loans.