By IANS
Ahmedabad : Leading newsprint maker Gujarat-based Rama Newsprint and Papers Ltd has decided to produce writing and printing paper to generate higher revenues.
In a communication to the Bombay Stock Exchange, the company has said the decision was taken because better margins are currently possible in the writing paper segment.
M.R. Venkatesh, Rama’s vice-president, marketing, told IANS that while a tonne of newsprint fetches Rs.23,000, one tonne of writing paper sells at Rs.34,000.
He said no fresh investment is needed to make the switch. “We have two machines each capable of producing 6,000 tonnes of paper per month. We propose to make writing and printing paper in one of the machines,” he said.
Venkatesh added that there would be increase in productivity due to the switch. The company can actually produce 7,500 tonnes of writing and printing paper per month. “Our production capacity will increase to 13,500 tonnes a month,” said he.
The company claims that it is now India’s largest private sector newsprint and printing and writing paper manufacturing firm at a single location in the country, with 22 percent of India’s newsprint production capacity.
Set up with an equity of Rs.2.33 billion, the manufacturing unit is spread over 450 acres of land in Barbhodhan village in Surat district, about 300 km from Ahmedabad.
In the last fiscal, Rama Newsprint notched up net sales income of Rs.3.25 billion and a profit after tax of Rs.245 million.
There was a time in the ’60s and ’70s when Indian paper mills were wary of manufacturing writing paper, especially the quality needed in schools and colleges. The government reportedly had to compel the companies to commit a part of their production for writing paper and sell it under a fixed price.