India’s Star Paper Mills alters expansion scheme

SINGAPORE, March 24, 2008 (RISI) - India’s Star Paper Mills is revising its expansion plans for the Saharanpur facility in Uttar Pradesh state.

The company previously intended to boost the mill’s capacity from 80,000 tonnes/yr to 150,000 tonnes/yr of printing/writing and kraft paper. But now the firm is looking at installing a 140,000 tonne/yr machine to increase the plant’s total capacity to 220,000 tonnes/yr.

Since Star Paper is opting for a higher capacity boost at its existing facility, it will most likely drop plans to build a greenfield pulp and paper plant in Uttaranchal state, according to a spokesman. “The move to expand the existing mill instead of building a new facility makes more financial sense,” he said. A final decision on this is expected by mid-2008.

The Saharanpur expansion scheme, which also includes a new 100 tonne/day bagasse pulp line and a 5 MW power plant, is now expected to cost more than the original estimate of Rupee 5 billion ($124 million). But the final cost has not been determined as the firm is yet to decide whether to install a new paper machine or a second-hand unit.

Negotiations with potential suppliers for the pulp line and for some converting equipment are under way. Funding for the project, which will take two years to complete, will come from loans and cash flow. The company intends to begin construction work before the end of the year.

The Saharanpur facility currently houses four machines which produce uncoated woodfree and kraft papers, as well as an 80,000 tonne/yr unbleached kraft pulp line.