Emami to invest Rs5 bn in paper plant

Emami to invest Rs5 bn in paper plant

Mumbai: Diversified Emami Group plans to set up a new newsprint facility in the eastern state of Orissa at an investment of Rs5 billion, a top official said on Thursday.

“We have plans to set up a new newsprint plant. It will be set up by Emami Paper Mills Ltd, a group firm, and the investment will be Rs5 billion (Rs500 crores)," Aditya Agarwal, group director told Reuters in a telephonic interview.

The capacity of the plant will be 500 tonnes per day and it will be fully operational in 2-3 years.

“We expect revenues of 10 billion rupees from our paper business in the next 3 years," he said.

Emami Paper Mills has two existing mills, one each in West Bengal and Orissa, while a pulp and paper project in West Bengal will come on stream in the next two and a half years.

The group’s business interests include the edible oils business under Emami Biotech Ltd, which is expected to clock revenue of Rs50 billion in the next 3 years, Agarwal said.

“As far as edible oil is concerned we want to complete the chain starting from cultivation, refining and bringing it to the consumers..for cultivation our investment would be Rs400 crores (4 billion) in Ethiopia over the next 3-4 years," he said.

“We are putting up two new refining plants in Andhra Pradesh and Gujarat at a total investment of Rs500 crores (5 billion), this is in addition to our West Bengal plant."

The Andhra unit will have installed refining capacity of 1,000 tonnes palm oil and 200 tonnes sunflower oil, while the Gujarat unit will have a capacity of 1,000 tonnes of palm oil and 200 tonnes of groundnut oil per annum, Agarwal said.

The firm recently launched its ‘Healthy and Tasty’ brand of edible oil in West Bengal and has lined up a pan-India launch in the coming 3-6 months.


The maker of personal care and consumer good brands, under Emami Ltd, is planning to raise prices by 2-5 percent across product categories after the excise duty hike, director Harsh V. Agarwal, who also joined the tele-call, said.

“We are evaluating where all we can increase the prices, the range we are looking at 2-5%," he added.

The firm had earlier said it was looking at price hikes of up to 7%.

The maker of brands such as Boroplus, Sonachandi Chyawanprash and Fair and Handsome, expects to garner revenues of Rs13-14 billion in the upcoming fiscal year, a growth of 25-30% year-on-year, he said.

Emami Ltd has also earmarked more than Rs1.5 billion for advertising and promotions and plans a capital expenditure of Rs100-200 million in FY11.

The firm, which acquired Zandu Pharmaceuticals Works Ltd in 2008, is currently scouting for acquisitions in Africa in the healthcare, haircare and skincare space.

“We are open to acquisitions in India and abroad. Overseas we are looking at the more developed markets of Africa such as Kenya, Nigeria etc," Harsh Agarwal said.

The asset size can be between Rs500 million to Rs10 billion or beyond and will be funded through internal accruals.

Shares of Emami Ltd ended up 2.86% at Rs602.45 in a firm Mumbai market.