Sree Sakthi Paper Mills to enter capital market

Corporate Reporter

To expand capacity to 240 tonnes a day

CHENNAI: Sree Sakthi Paper Mills, engaged in the manufacture of kraft paper and duplex board, is entering the capital market with an initial public offer of 83.33 lakh equity shares of Rs. 10 each for cash at a premium of Rs. 20 per share aggregating Rs. 25 crore.

The issue will be open from January 17 to 21. The funds are required for expansion of capacity to 240 tonnes from 140 tonnes daily at the company's units located in Edyar and Chalakkudy (Kerala).

The company will also be setting up a 2 MW cogeneration power plant.

Addressing presspersons here on Wednesday, S. Rajkumar, Managing Director, said the company was incorporated in 1991 with an installed capacity of 15 tonnes of kraft paper daily and it gradually carried out expansion schemes.

The last leg of expansion saw the combined capacity increasing to 140 tonnes in 2004 from 120 tonnes in 2002.

The benefits of the last expansion would be fully derived in the current financial year.

Besides, the co-generation plant would help reduce the cost of power significantly, Mr. Rajkumar said.

After completing the expansion plans the combined capacity of kraft paper and duplex board would go up to 70,000 tonnes annually, he said. The Centre had been extending sops to paper mills by reducing the excise duty to 12 per cent with the first 3,500 tonnes produced by a mill attracting only eight per cent. This would help the company to report a healthy bottomline, Mr. Rajkumar said.

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