KPPL to begin operations on January 1

To begin full scale operations in 46 months and to provide jobs to more than 3,000 people

Marking the end of long process involving complex legal disputes, the defunct Hindustan Newsprint Limited in Velloor will resume operations as the Kerala Paper Products Limited (KPPL) on January 1.

According to Industries Minister P. Rajeeve the new company under the State government will achieve full scale operation in four phases over a period of 46 months and the unit will be able to provide employment to more than 3,000 people upon being fully operational.

A three-member board comprising the Industries Secretary A.P.M. Mohammad Haneesh, KINFRA MD Santosh Koshy Jacob and special officer Prasad Balakrishnan, will lead its operations. Chief Minister Pinarayi Vijayan is slated to carry out a formal inauguration of the unit in May, next year.

“An amount of ₹34.3 crore has been allotted for modernization of the factory. In the second phase, production will start in three to six months at an expenditure of ₹44.9 crore and it also requires a working capital of ₹75.15 crore.” said the Minister.

According to the Minister, the factory will run its operations on a trial basis in the first few months.

“The company will mostly use imported pulp when resuming production. Small quantities of recycled pulp, virgin pulp and mechanical pulp will be used for paper making. The third phase will require an investment of ₹650 crore and the company will see a significant change in profits in nine months. After the commencement of operations, the funds will be raised through the company’s own system and with the support of the banks,” Mr. Rajeeve said, adding that the company is expected to churn in profits worth ₹350 crore with a production of 3.50 lakh tonnes in the fourth phase in 17 months.

While the production will begin with newsprint, it will be diversified into premium paper products including tissue paper in the subsequent phases. In the final phase, it is expected to become a leading company with a turnover of ₹3,200 crore.

Meanwhile, the Minister also clarified that the company had been taken over after paying all dues as per the resolution plan for the old company and hence the new company would not take up any liabilities of the existing employees. “Depending on the nature of the work the company will hire workers on a contract or daily basis with due consideration to the outgoing workforce,” he said.

Mr. Rajeeve added that the management had been given full responsibility and freedom to make the company profitable.

The previously central PSU, located on the 700 acres provided by the State government, had shut down its production plant about two years ago citing financial losses. The State government took over the company after the union government had initiated plans to privatize the unit.

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