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Higher operational efficiencies
The size of a paper machine is an important viability
parameter. Smaller units with high operating costs are
becoming unviable, while bigger and technologically evolved
units are attractively placed to achieve lower costs.
Emami Paper's third machine at Balasore with an installed
capacity of 85,000 tonnes per annum, by far the largest paper
manufacturing machine in India; as an extension, the company
has increased an aggregate installed capacity to 145,000
tonnes per annum, making it the largest newsprint maker in
India. This scale will not only enable the company to spread
its variable cost over a larger tonnage but increase its
bargaining clout in the purchase of raw materials.
In the current market scenario, there have been increasing
investments in brownfield expansions as opposed to the
greenfield route. This is on account of a relatively quicker
time in commissioning; comparatively lower capital cost,
faster product-to-market, quicker cash flow and shorter
payback. For instance, while the project cost for a greenfield
project (based on 100 per cent recycled fibre and captive
power plant) is estimated at around Rs. 65,000 per tonne, the
brownfield expansion at Emami Paper has entailed a competitive
capital cost of around Rs. 39,000 per tonne.
The Company has taken necessary steps to set up 400 TPD
(132000 TPA) Newsprint project at a project cost of Rs.500
crores. The project is likely to be set up in South India or
at existing location at Balasore. The Company is also in the
process of setting up 600 TPD (200000 TPA) wood based
integrated pulp and paper mill in Orissa alongwith necessary
infrastructural facilities and ancillaries. Steps are being
taken for evaluation of all parameters including land
acquisition, utility feasibilities, cultivation of plantation,
discharge of water etc. The project will be set up in 2 phases
and 1st phase of 300 TPD (100000 TPA) at a project cost of
Rs.1000 crores is likely to be completed in the year 2013-14. |