JK Paper to receive Rs 325 crore financing from IFC

Investment for capacity expansion and improve efficiency

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JK Paper

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 nonbinding 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.

In 2024, we are looking at full recovery and growth-led investment in Indian printing

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. It created the category of privately owned B2B print magazines in the country. And by its diversification in packaging, (Packaging South Asia), food processing and packaging (IndiFoodBev) and health and medical supply chain and packaging (HealthTekPak), and its community activities in training, research, and conferences (Ipp Services, Training and Research) the organization continues to create platforms that demonstrate the need for quality information, data, technology insights and events.

India is a large and tough terrain and while its book publishing and commercial printing industry have recovered and are increasingly embracing digital print, the Indian newspaper industry continues to recover its credibility and circulation. The signage industry is also recovering and new technologies and audiences such as digital 3D additive printing, digital textiles, and industrial printing are coming onto our pages. Diversification is a fact of life for our readers and like them, we will also have to adapt with agility to keep up with their business and technical information needs.

India is one of the fastest growing economies in nominal and real terms – in a region poised for the highest change in year to year expenditure in printing equipment and consumables. Our 2024 media kit is ready, and it is the right time to take stock – to emphasize your visibility and relevance to your customers and turn potential markets into conversations.

– Naresh Khanna

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