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Wednesday, Feb 23, 2005

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ITC Paperboards eyes growth through backward linkages

Our Bureau

Kolkata , Feb. 22

ITC Paperboards & Specialty Papers Division (PSPD), having absorbed a total investment of Rs 750 crore in the last two years, particularly on paperboards business, is now looking at growth options through backward fibre linkages.

Market penetration plans are being studied and strategies have been drawn to work closely with channel partners, especially in the FMCG and sweetmeats sectors.

Having added a fifth production line at a cost of Rs 250 crore at Bhadrachalam, ITC-PSPD aims to touch a production capacity of around 4 lakh tonnes per annum (tpa) soon from 3.5 lakh tonnes through de-bottlenecking operations. It envisages doubling this capacity in four years and attaining a leadership position in the Afro-Asian region.

Production at ITC's newly acquired 65,000-tpa unit in Kovai, already integrated with business operations, has been scaled up to 85,000 tpa (after investment of an additional Rs 50 crore mainly on a captive power plant here after acquisition).

Addressing newspersons here on Monday after formally unveiling the high quality ECF (elemental chlorine-free) mark for customers of its paper and paperboards products, Mr Pradeep Dhobale, CEO of ITC-PSPD, said the company was well positioned in terms of cost and quality to partner with leading FMCG, foods and pharmaceutical industries to increase sales in domestic and international markets. Mr Dhobale put the ECF investment at Rs 250 crore.

The Bhadrachalam paper mill is the first in the country to adopt an ECF fibre line.

ECF paperboards, he said, were the preferred packaging material worldwide, as they are non-contaminating and have greater durability compared to recycled or virgin paperboards that are not chlorine-free.

Asked how competitive the company's products could be in the domestic sector, given the highly fragmented nature of the paper sector, Mr Dhobale said efforts were on to keep the prices of high quality ECF-brand boards for food-grade packaging at a reasonable level.

"We are now in the process of creating consumer awareness for such packaging boards, and working closely with channel partners."

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ITC Paperboards eyes growth through backward linkages

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