Emami Paper Halts INR 2000 Cr. Multi-Layered Packaging Board Project in Gujarat

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Read the News update on Emami Paper's upcoming Multi-Layered Packaging Board Project in Gujarat.

Emami Paper Halts INR 2000 Cr. Multi-Layered Packaging Board Project in Gujarat

Gujarat | 26 August 2019 | The Pulp and Paper Times:

For the last six months paper mills are feeling heat of market slow down. Poor market conditions are restricting paper mills to sell their products at good price. After hovering clouds over Asia Pulp and Paper’s investment in India, Emami Paper has come up with the announcement of surrendering the plot which was allotted to it for the development of 2,25,000 tonnes per annum packaging board plant at Bharuch Gujarat.

“The management don't see the present business environment is going to change in a short period of time and hence, it has been decided against investing in Gujarat Project until the market improves, banking sector getting better to offer finances,” said Emami Paper in a statement submitted to BSE.

The Management of Emami Paper Mills Ltd has conveyed on 26th August 2019 its intention to surrender the plot 119, 121 to 126 admeasuring 414930.894 Sq.Mt at Sakhya Industrial Estate, Bharuch, Gujarat (plot allotted for Gujarat Project).

A Letter has been submitted to Gujarat Industrial Development Corporation (GIDC), Ankleshwar, Gujarat, on 26th August, 2019.

“However, for the current economic slowdown and depressed capital market conditions, the required fund raising plan by the issue of further shares or otherwise is pending. Our Company is exploring an appropriate time for fund raising through QIP or otherwise within the validity period of 2nd November, 2019 as aforesaid,” Emami Paper said in written statement to BSE on 17th August 2019.

“In view of the current economic slowdown and uncertainty in lending by banks, we have decided to defer (work on) Gujarat project. We would review the situation and then take a call on renewing construction,” PS Patwari, Executive Director and CEO, Emami Paper, told to BuinessLine on the sidelines of the company’s annual general meeting.

Keen to expand its footprint directly in the western region of the country, Emami Paper Mills, part of the Rs 600 billion Emami Group, is investing Rs 20 billion in Gujarat to set up a 0.23 million tonne (mt) multi-layered coated packaging board manufacturing plant.

The packaging board plant will come up in two phases – having a capacity of 2,25,000 tonnes per annum in each phase. The first phase is expected to be operational in 2020 at an estimated cost of Rs 1000 crore. The project will cover 103 acres at the Saykha Industrial Area.

Packaging board finds its usage in FMCG, food packing, medicines and pharma, playing cards, visiting cards and a variety of other industries.

“The plant will help leverage our activities in West India and is expected to boost revenues by Rs 1,000 crore. Right now we are catering to West Indian markets from our existing facility at Balasore and the costs are obviously higher. The Bharuch plant will also give us a cost advantage,” said Mr. Aditya V Agarwal, Director, Emami Group, in media report earlier.

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