West Coast Paper plans $187 million expansion

Sep 06, 2005. /Lesprom Network/. The SK Bangur Group paper company, West Coast Paper Mills, is going for a INR820-crore ($186.7 million) expansion programme to set up an integrated paper unit at its existing plant in South India. In addition, West Coast is also scouting for overseas expansion, looking for joint venture partnership in South-East Asian nations. While almost all mid and large-sized domestic paper companies have announced plans to increase capacity, in terms of quantum of investment, this will be the third-largest capex by a single domestic paper company after ITC and Ballarpur Industries in recent times. Along with the investments announced for another group company, Rama Newsprint, the total group capex plan for expanding paper capacity will cumulate to INR1,200 crore ($273.3 million). The expansion project is expected to be completed in four years. This will take the current capacity of 1.75 lakh tonnes of paper to 2.85 lakh tonnes with some debottling exercise. The new unit will be set up at its existing plant at Dandeli in Karnataka. The project has already been discussed at the board level of the INR500-crore ($113.9 million) company and the details of the plan will be worked out now. As per sources, the funding structure is yet to be frozen. When contacted, V Subbaiah, vice-president sales and marketing, West Coast Paper Mills, confirmed the developments. "Half of the new capacity will be utilised for making copier grade of paper. That segment, which falls under the branded products category, is growing faster and we shall be pushing it further, which will bring greater upside to turnover and image." West Coast is looking at opportunities to strike a JV in South-East Asia. Representatives from the company had visited Thailand, Philippines and Vietnam recently. West Coast is looking for a pulp and paper company which would have a capacity of at least one lakh tonnes. West Coast had also been active in striking inorganic expansion plans in the country. A couple of years ago, the group had acquired Rama Newsprint which pitched it above the Singhanias as the second-largest player in the paper industry, both in terms of capacity and revenue.