Andhra Paper intends to invest INR 2000 Cr. in a new Paper Board machine with a 175,000 TPA capacity

Andhra Paper intends to invest INR 2000 Cr. in a new Paper Board machine with a 175,000 TPA capacity

Rajamahendravaram | 31st January 2023 | The Pulp and Paper Times:

Indian packaging industry is expected to report a CAGR growth of 5-6% between 2022 to 2027. Packaging is a fast-growing industry catalysed by rising disposable income, growing consumer awareness and rise in processed food offtake.

Gauging the growing demand for board market in India, One of the largest integrated paper and pulp manufacturers in India- Andhra Paper Limited (APL) has accorded an in-principle approval to prefeasibility report to exploit opportunities in Paper Board Segment through expansion and capacity addition by setting up an integrated Green Field Project at Unit Kadiyam.

Pursuant to the provisions of Regulation 30 (4) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ('SEBI LODR Regulations"), we wish to inform that the Board of Directors at their meeting held on January 31, 2023 have accorded an in-principle approval to prefeasibility report to exploit opportunities in Paper Board Segment through expansion and capacity addition by setting up an integrated Green Field Project at Unit Kadiyam. 

The submission to SEBI says, It is proposed to install approximately 175,000 Ton per annum board machine (KA#4) along with ancillary and support infrastructure concerning the project. The existing production capacity is 87,000 TPA. The proposed capacity addition is 2,21,000 TPA (Pulp) and 1,56,000 TPA (Paper Board). In this regard, the Company will file necessary applications with the Ministry of Environment & Forest for Climate Change (MOEF) for Environment Clearance and further approvals concerning the project shall be sought from concerned regulatory authorities including local, state and central authorities as may be necessary for the proposed project. The final approval for the project shall be granted by the Board subject to the Company obtaining the requisite approvals from concerned authorities.

The project commencement will be subject to approvals from MOEF & other concerned authorities and thereafter a comprehensive final proposal will be put up to Board for approval.

In India, Paperboard demand is expected to grow sharply 9-11% CAGR over fiscal 2022 to fiscal 2026. E-commerce boom, Super markets, Ban on single use plastic, packaging of processed food stuff, better quality packing, environment friendly measures has led to opportunities in the paper Board segment where the Company sees a good opportunity for capacity expansion through investment in new Machinery and requisite infrastructure subject to necessary approvals.

In volume terms, the Indian paper and packaging board market is expected to have grown by 13% in 2021-22 compared to a de-growth of 17% in 2020-21. The printing and writing paper segment is expected to have grown by 23% in 2021- 22 compared to a de-growth of 34% in 2020-21. The packaging board segment is expected to have grown by 31% in 2021- 22 compared to a contraction of 20% in 2020-21. The coated paper segment is expected to have grown by 28% in 2021-22 as against a contraction of 39% in 2020-21.

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