Jan 30, 2006. /Lesprom Network/. Indian Ballarpur Industries to explore the possibility of acquiring assets in key South East Asian markets in a move to reduce production costs, the Economic Times reported. The move to look overseas is mainly as Ballarpur doesn't find many suitable opportunities in India. "It is part of our plan to strengthen the source of our raw material, which is fibre," group CFO B Hariharan told ET. "It can either be through cultivating the raw material overseas or by buying a pulp facility and then shipping the product to our units in India," he added. Hariharan did not put a figure on the kind of investment such an exercise would entail, saying that the company is still exploring all options. "We're looking at options in Vietnam, Malaysia and Indonesia," he said. The company had earlier said it would be investing about Rs 1,200 crore ($272,4 million) in a restructuring exercise that would include expansion of existing capacities and reduction in costs. "Pulp is a key raw material, and having our own source would control costs significantly," Hariharan said. Ballarpur would be needing about 250,000 tonnes of pulp, once the expansion exercise is completed, compared with the current requirement of about 100,000 tonnes to 115,000 tonnes. In 2004-2005, input costs per tonne produced were around Rs 26,000 ($590), stable as compared with 2003-2004. In the past year, pulp prices have remained stable. But the rise in demand is expected to push up pulp prices by about 5% to 10% to $550-$600 per tonne. Pulp acquisitions would enable Ballarpur to join the other Indian major, Grasim, which recently bought Canada's St Anne Nackawic Pulp Mill, for $100 million, one of the biggest acquisitions in Canada by an Indian company. Demand for paper is expected to stay firm as it is closely linked to the gross domestic produce. With the RBI forecasting a 7.5% to 8% GDP growth for the current fiscal and projecting a firm outlook in the coming years, it is expected that the demand for paper would remain healthy. The sector is currently growing at the rate of 6% to 7% which is far more than the 3% to 4% rate that developed countries are growing at. "Cultivation of raw material would mean growing our own plantations," said Hariharan, adding that, this option wouldn't require any major investment. Ballarpur is already into farm forestry as corporates aren't yet allowed to grow trees for their own consumption. In India, the company has farm forestry programmes in states such as Maharashtra, Andhra Pradesh, Orissa, Chhattisgarh, Haryana and Tamil Nadu, covering over 16,000 hectares of land.