CHENNAI, Mar 13: Newsprint manufacturer Sun Paper Mills is coming out with a public issue on March 23 this year to set up a cogeneration plant.The issue is for 82,50,000 equity shares of Rs 10 each for cash at par aggregating to Rs 8.25 crore. The total project cost is estimated to be Rs 23.50 crore, according to company estimates. The company proposes to use biomass (rice husk, deoiled bran cake, saw dust) as fuel which would be supplemented with lignite. The company, which has a factory in the Tirunalveli district in Tamil Nadu, is producing 22,000 mt per annum using pulp from Odai trees. About 65 per cent of its production is used by group companies like Daily Thanthi (a vernacular daily).
Some of its other clients include publications like Kerala Kaumudi, Matrubhoomi and Andhra Jyoti from the adjacent states.
The company does not have any immediate plans to enhance its capacity. But with the cost of power and fuel constituting 30 per cent of the cost of production and with decreasing stability inthe availability of power from the state electricity board, cogeneration was the only option for the company.
IDBI has sanctioned a term loan of Rs 14 crore for the project. While the existing steam requirements are met by a 10 TPH low pressure boiler, a high capacity boiler - 32 TPH - is to be put up. The additional steam thus generated is to be condensed to produce power. The capacity of the plant will be 5.8 mw which will satisfy the current requirements. The company will list its shares on the Madras Stock Exchange (MSE). However, the shares of the company have not been traded for the last three years. The management's response to this is that the existing capital base is very low (Rs 61.51 lakh) and with the present increase in capital, there would be a greater liquidity in the scrip.
The company foresees a sales of Rs 45.35 crore and profit after tax (PAT) of Rs 1.39 crore for 1997. For the half-year ended September 31, 1997, the company posted sales of Rs 26.05 crore and PAT of Rs 34.86 lakh.
