NEPA to Enhance Production Capacity to 1,00,000 MT; Rs.469 Crore Revival Package set path for Disinvestment

NEPA to Enhance Production Capacity to 1,00,000 MT; Rs.469 Crore Revival Package set path for Disinvestment 

Nepanagar | 25 December 2018 | The Pulp and Paper Times   

The halted operation of NEPA mill may soon start with enhanced capacity.  After the clearance of revival package of Rs. 469 crore from Centre Govt., the closed paper mill will be able to complete its Revival & Mill Development Plan (RMDP). The revival package includes infusion of Rs 277 crore as equity for completion of RMDP which shall enhance production capacity to 1,00,000 MT per annum from 83,000 MT per annum, diversify output, improve quality of products and also help resume production," an official statement said.   

As per the financial Report of NEPA, The Revival Plan has its major components as installing a new 300 TPD De-inking Plant, Refurbishment of both Paper Machines, Renovation of 12.27 MW Captive Power Plant and renovation of existing 132 kv substation. The company is currently executing this revival and modernization plan that would enhance the production capacity to 100000 TPA and will result in a diversified product portfolio including high brightness newsprint and writing and printing paper. 

“The 60-year-old machinery was left incompetent. We needed to increase production, and hence, money was needed to dismantle the two production units,” said A N Sonsale, CMD of Nepa Limited, while talking to The Logical Indian.

Revival Package

The Union Cabinet has approved a Rs 469.41 crore package for the revival and mill development plan (RMDP) of NEPA Ltd in October 2018. The decision for the package was taken by the Cabinet Committee on Economic Affairs (CCEA). The package includes infusion of Rs 277 crore as equity for completion of RMDP, Loan of Rs 101.58 crore for the payment of salary, wages etc and a sum of Rs 90.83 crore for the voluntary retirement scheme of 400 employees.

Disinvestment

The centre's decision to disinvestment NEPA is a welcome move and it will open path for private player to hold the equity of the giant. The strategic disinvestment of NEPA Ltd on completion of the RMDP at an appropriate time has also been approved. 

History

Established in 1948, the mill started operations in 1956 with a capacity of 30,000 tonnes per annum. Subsequently, the mill underwent expansion projects in 1967, 1978 and '89 to increase its production to 80,000 tonnes per annum. Considering the fact that the mill is a Public Sector Undertaking (PSU), talks of reviving it started in 2009 and 2010, which later materialised in the form of financial assistance of Rs. 1026 crore which was given by the then Congress-led UPA II.

The mill which served as the only newsprint supplier in India in 1981, lost much of its relevance during the post-globalization days. Reducing sales as well as paper qualities led Nepa Limited to incur recurring losses.

Web Title: NEPA to Enhance Production Capacity to 1 00 000 MT Rs 469 Crore Revival Package set path for Disinvestment