Khanna Paper Mills prepares for expansion in a big way

Amritsar, May 22: India's third largest waste paper-based mill in Punjab has envisaged a Rs 300 crore expansion plan to enhance its production capacity from the present 700 tonnes to about 1000 tonnes per day (TPD).

The ISO 9001:2000 certified and registered Export House, Khanna Paper Mills Pvt Ltd (KPM), manufacturers of high quality writing and printing paper and duplex board is single location plant at the outskirt of holy city of Amritsar.

KPM's future plan is to put up unit of 250 TPD capacity for producing writing paper which will raise total capacity of the company from 2.31 lakh tonnes per annum (TPA) to 3.13 lakh TPA, according to KPM Chairman B M Khanna.

For the expansion plan, the KPM will contribute Rs 80 crore from internal accruals and rest of the money of over Rs 200 crore would be mobilsed from the banks and other financial institutes.

Talking to mediapersons on a plant visit here on Saturday, Mr Khanna, however, stoutly denied that they had been delving with an option of going in the capital market for raising the required funds for the ambitious expansion projections.

As the plant is using 85 per cent of raw material - waste paper imported from UK, USA, Australia and EU countries and 15 per cent procured from domestic sources, the mill is toying with the idea of shifting the plant to coastal local- most desirable in Gujarat.

On the other hand, 85 per cent of the total mills poduction is domestically consumed and the rest is exported to Sri Lanka, Bangladesh and a dozen of African countries.

The high cost on transporting of imported waste paper from a sea port to interior location of Punjab, invariably jack up the overall cost of the raw material and makes dent into the net profit, the KPM board members felt.

With a modest beginning in 1985 with manufacturing of mere 10 tonnes of writing paper a day, the plant equipped with modern technology, has travelled a long way to raise its capacity to produce 400 tonnes of paper and 300 tonnes of board a day.

The plant's sales have been growing steadily over the years which touched Rs 425.20 crore in fiscal 2006 with projection for next year at Rs 560 crore leaving behind a net profit of Rs 66 crore (2006-07).

The company will soon diversify in production of A4 copier paper later this year, said Dr S S Sandhu, one of the director of the mill.

Now the plan has co-generation facility of 27.50 MW with arrangement of power connection of 12 MW from Punjab State Electricity Board (PSEB).

The plant, also recognised as a green enterprise, plans to 100 per cent recycle its effluents, mainly acidic water. At present it uses the excess steam produced from the coal based power generation facility for mulching paper fibre which is processed into different types of paper and board after de-inking the waste. It has also installed coal particle precipitator to keep the environment amount clean.

Using the waste paper is itself an eco-friendly act as for manufacturing one tonne of paper, 17 trees had to be cut for that. But India does not have proper collection facilities for domestic waste papers, the mill has to depend more on the imported waste paper and also for the quality purpose.

UNI