Tamil Nadu Newsprint & Papers Share price

TAMIL NADU NEWSPRNT AND PAPERS LIMITED - popularly known asTNPL - was promoted by the Government of Tamil Nadu (GOTN)for the manufacture of Newsprint and Printing and WritingPapers using bagasse as the primary raw material. Bagasseis the solid fibrous material left after the extraction ofjuice from the sugarcane and is normally burnt as in-housefuel in the sugar mill boilers to generate steam and power.The Company has an interesting history.Despite research and development efforts throughout theworld for more than hundred years progress was slow incommercial production of Newsprint from bagasse. While theuse of bagasse in the production of Printing and Writingpaper has been well established its use in Newsprintproduction was relatively unknown with many failedexperiences around the World. In the 1950s two commercialbagasse based Newsprint plants were set up in Cuba and inLouisiana USA which however suffered from high operatingcosts and less than satisfactory products. In the late''70s based on a new process developed by Dr Cusi ofMexico two new mills were set up in Peru and Mexico. Themills faced technical problems and were found unavailable on along term basis.TNPL project was conceptualised against this backgroundbased on bagasse to meet the twin objectives of conservingthe fast depleting forest resources and to reducedependence on imported Newsprint. The Company wasincorporated on April 16 1979 under the Companies Act1956.An optimum product mix consisting of 50000 tpa ofNewsprint and 40000 tpa of Printing and Writing Paper(PWP) was designed for the project due to the lowadministered prices of Newsprint then prevailing and thefiscal incentives that were available for PWP units using75% bagasse pulp. Inclusion of Printing and Writing Papersin the product mix was also considered as a fall backarrangement for safeguarding the investment in the eventthe innovative technology adopted for production ofNewsprint from bagasse takes time to become commerciallyviable.Having framed the idea thus search went on for identifyingthe technology for manufacture of Newsprint from bagasse.M/s Beloit Corporation USA was finally chosen fordevelopment of technology related to manufacture ofMechanical Pulp a major ingredient in production ofNewsprint out of bagasse. After extensive research in theBeloit Corporation Research Centre Massachusetts U.S.A.the Mechanical Pulping process for bagasse was developed.At the early stages of the formulation of the Company''soriginal project the Company installed adequate chemicalpulping facilities for manufacture of PWP as a fall backmeasure since the technology for manufacture of mechanicalpulp was not commercially proven. The pulping plant istherefore designed for an output of 100000 tpa ofNewsprint or 80000 tpa of PWP so that adequate pulp isavailable to manufacture PWP for the entire capacity ifNewsprint production based on bagasse proves to bedifficult. The process for manufacture of mechanicalbagasse pulp was however established in time forcommercial exploitation by the Company.In recognition of the pioneering effort behind thisproject and in view of its importance to India and othersugar cane producing countries the World Bank supportedthe project. It made US$ 100 million available to TNPL forpart financing the cost of the original project. The fundswere routed through IDBI.As the project was the first of its nature and thetechnology was not commercially proven it was notconsidered advisable to raise equity from the public.Therefore to supplement the equity contribution made byGOTN its undertakings and sugar co-operatives IDBIsubscribed to the initial equity capital of the Companythat would normally have been offered to the public.The mill was established at Kagithapuram in Trichy Districtof Tamil Nadu in 36 months. The original cost of the millwas Rs.239 crores. Commercial operations commenced inOctober 1985. TNPL has over the years successfullydemonstrated its ability to produce on a commercial basisgood quality Newsprint using a high proportion of bagassepulp.Existing BusinessTNPL manufactures and markets Newsprint and Printing &Writing Papers. The mill has an installed capacity of50000 tpa of Newsprint and 40000 tpa of Printing &Writing Papers and has the flexibility to vary the productmix depending on market situation.The mill is located at Kagithapuram in TiruchirapalliDistrict of Tamil Nadu about 400 kms South West of Madras.The location has advantages in terms of nearness to thesugar mills supplying bagasse proximity to river Cauveryfor sourcing water access to broad gauge railway track fortransportation of coal and a well developed roadinfrastructure. TNPL is implementing an expansion project todouble its capacity from 90000 tpa to 180000 tpa at itsexisting plant site.TNPL is also operating a 15MW Windfarm in Tamil Nadu.