ITC recently announced the acquisition of Century Pulp and Paper from Aditya Birla Real Estate for Rs 3,498 crore, expanding its capacity, and gaining a stronger foothold in the North Indian region.
While ITC’s paperboards and specialty papers business has an annual capacity of over 1 million metric tons, Century Paper has an installed annual capacity of 480,000 metric tons.
ITC’s paper facilities are mainly located in South India although it operates a tissue mill in the north, while the Century paper factory is at Lakuan in Uttarakhand. Notably, Century added a paper machine for producing high quality packaging board several years ago, the segment in which ITC’s P&SPD is the industry leader.
“The acquisition will immediately add significant scale and economies to existing operations with potential for further capacity expansion, provide a locational advantage for efficient customer servicing and proximity to key raw material sources, mitigate operational risks through multi-site operations, and enhance resilience across industry cycles through portfolio diversification,” ITC said in an exchange filing.
Out of ITC’s overall FY24 revenue of Rs 69,446 crore, the paperboards, paper, and packaging segment contributed Rs 8,344 crore, while Aditya Birla Real Estate’s pulp and paper division had revenue of Rs 3,375 crore.
In a separate filing, the Aditya Birla group said the sale of the pulp and paper business will help it pursue growth opportunities in its core real estate business. RK Dalmia, managing director, Aditya Birla, said the sale is a strategic portfolio choice. “The company has embarked on a transformational growth phase, and this move will further sharpen its focus on real estate to drive sustained value creation,” he said in the filing. Century Paper makes and sells writing paper, printing paper, tissue paper, paper board, rayon grade pulp, paper grade pulp, and more.
