By IANS
Bangalore : The International Finance Corporation (IFC), the private sector arm of the World Bank group, is lending $40 million (Rs.1.64 billion) to West Coast Paper Mills Ltd, an integrated printing and writing paper manufacturer based in north Karnataka.
According to an IFC statement here Tuesday, the long-term loan is intended to enhance the mills' competitiveness and environmental performance.
The loan will help the company modernise and expand capacity. A part of it will be used to install a chlorine-free fibre line to eliminate a major source of pollutants from pulping operations.
"The loan will help strengthen West Coast's cost competitiveness in the paper industry and achieve international standards in environmental and social performance. The project will enable it to increase the capacity and enhance productivity," IFC South Asia director Paolo M. Martelli said.
The key demand drivers for paper consumption in India are a rising GDP, literacy levels, corporate spending and industrial activity. At 7 kg per capita consumption, India ranks far below the global average of 56 kg a year.
The loan will also improve West Coast's debt profile, aligning its debt service requirements with its ability to repay.
West Coast chairman S.K. Bangur said the Indian paper industry was fragmented, with a capacity of 6.8 million tonnes per year distributed among 500 players, majority of them in the unorganised sector.
"With IFC's support, we hope to improve the sector's efficiency and enhance our competitiveness," Bangur stated.
IFC holds a portfolio of $1.3 billion in India. During 2006, it committed about $400 million in new investments across the country.