Financial Daily from THE HINDU group of publications
Friday, Jun 18, 2004
BILT plans to increase farm forestry coverage programme
New Delhi , June 17
BALLARPUR Industries Ltd (BILT) plans to increase its farm forestry programme coverage and provide technical know-how to the local farmers to improve productivity to meet its high raw material requirement.
Raw material is the largest cost component in paper manufacturing at 32 per cent of the total cost.
While India is one of the fastest growing markets in the world for paper consumption, it has a shortage of raw material and its demands are being met by increasing imports.
"Demand for paper consumption in India is growing at a 6.5 per cent as compared to 1.8 per cent in North America and 4.3 per cent in South Asia. China, another attractive market, is growing at 4.9 per cent," said BILT's head of forestry operations, Mr Raj Chaurasia.
According to a CII study, Asia will account for 34 per cent of the world's paper consumption by 2010, while North America will account for 28 per cent and Europe will account for 22 per cent.
In this backdrop, BILT is gearing up to source its raw material requirement from within the country. "Across the six States where the company operates, BILT plans to increase its farm forestry area by around 50 per cent within 2004 itself," Mr Chaurasia told Business Line during a plant visit to their unit in Orissa.
While till 2003, the company had a total of 14,876 hectares, it plans to add 7,620 ha in the current year.
In terms of farmers involved, while there were around 13,216 farmers involved at present, BILT will involve another 5,875 farmers this year. In 2005, the company plans to add another 11,700 ha and involve an additional 9,000 farmers. Under its farm forestry programme, the company encourages farmers in the vicinity to grow eucalyptus in their wasteland.
Using farm forestry, in order to further reduce the costs, BILT plans to source its raw material increasingly from the vicinity of its manufacturing plants. For example, in the southern sector where BILT currently has three manufacturing units, it sources 25 per cent of its wood from within 350 km radius, around 52 per cent from 350-600 km radius and around 23 per cent from 600-900 km radius. By 2008-09, BILT aims to source 47 per cent of its raw material from within 350 km radius of the manufacturing units, 51 per cent from 350-600 km radius and around 2 per cent from 600-900 km radius.
Additionally, the company is providing technical expertise to the local farmers for increasing productivity. It is providing the farmers with seedlings at a subsidised cost that would give 30 per cent more yield of saleable pulp, as compared to the present seedlings, said Mr Chaurasia.
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