JK Paper to receive Rs 325 crore financing from IFC


JK Paper Ltd. (JKPL), a leading producer of office paper, packaging boards, printing, writing and specialty paper, has lined up an investment of around Rs 650 crore for capacity expansion and efficiency improvement, capital expenditures at its two plants and debt refinancing among others. Around half of this investment will be accounted for by the International Finance Corporation (IFC), which will provide the credit for improving the company’s productivity and restructuring its balance sheet.

The proposed IFC investment is in the form of secured non-convertible debentures (NCDs) worth Rs. 325 crore to be used in JKPL’s project locations in Rayagada, Odisha and Sonagadh, Gujarat. The financing is aimed at supporting JK Paper’s efforts to increase energy efficiency in its plants by reducing the use of water and coal. Additionally, the project supports the company’s efforts in sourcing pulp, which it does by supporting social farm forestry programs; in fact, JK Paper now plants more trees than it fells, thereby playing a vital role in enhancing green cover in the country.

The company has been making efforts to enhance capacity for quite some time now, which indicates its seriousness in charting a healthy growth story. About a year ago, JK Paper had made a non-binding offer to buy two units of Ballarpur Industries (BGPPL) in Maharashtra but the deal failed due to the reluctance by Avantha Group to part with these plants. Back then, JK Paper had stated that its non-binding offer was preliminary and subject to customary conditions, including but not limited to initiation and completion of satisfactory due diligence, finalization and execution of definitive agreements, and receipt of applicable corporate and regulatory approvals.

Meanwhile, JK Paper is on advanced stage discussions for the purchase of the paper division of Century Textiles and Industries Ltd. (CTIL), owned by the BK Birla Group. JK Paper’s current production capacity at its Sonagadh plant is 160,000 tons per annum (tpa) of paper and paper board while the Rayagada plant has a production capacity of 295,000 tpa of paper. Part of the Rs. 650 crore investment is aimed at acquiring technologies to achieve energy efficiency, which the company feels will determine its future sustainability.

The company is also streamlining its raw material sources by supporting forest eco-systems and communities living in and off forests. In Sonagadh, JK Paper purchased around 26,000 tpa of bamboo from tribal villagers, who enjoy bamboo harvesting rights by the Gujarat Forest Department. Additionally, about 202,000 tpa of wood (eucalyptus, casuarina and subabool/leucaena leucocephala) is bought directly from about 2,500 farmers engaged in farm forestry, at a guaranteed fixed price. The plant needs 250,000 tpa of wood and the shortfall is tackled by importing pulp.

This article has inputs from Business Line and Live Mint.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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