While the falling rupee is helping the company on one side, TNPL is cutting down on coal costs to the extent of 50 per cent - or Rs 20 crore - through imports. It has already planned to import 1 lakh tonnes of coal at Rs 1,600 per tonne (which is cheaper than Indian coal by Rs 400 per tonne approximately and of bettercalorific value). Already some 25,000 tonnes have been contracted.

TNPL's total expenditure for 1997-98 has gone up by Rs 36.23 crore on sales of Rs 421 crore. About Rs 20 crore of this has been attributed to higher production of newsprint (52,410 tonnes up from 36,891 tonnes). The variable costs for newsprint manufacturing amount to Rs 15,000 per tonne and the company produced 15,519 tonnes more of newsprint for the year ended 1998. Remaining expenses have been attributed to higher costs of coal, bagasse, power. Bagasse prices went up to Rs 850 per tonne from Rs 700 the previous year. However newsprint production is to be stepped up this year to 60,000 tonnes, variable expenditure notwithstanding, because conditions appear to be more favourable now. Also the first paper machine has been fully depreciated last year and anything coming out of it would be advantageous, according to officials. Writing and printing paper target has also been fixed at 1,25,000 tonnes from 1,18,208 tonnes last year. The two papermachines would be judiciously used for producing both newsprint and printing and writing paper (instead of restricting each to one use as was originally envisaged) to lessen downtime.

The company has already paid back a Rs 45 crore loan taken from the state government last year. Though it owes IDBI Rs 100 crore and has a working capital limit of Rs 35 crore, falling interest rates have helped contribute to a marginal reduction of interest from Rs 70.61 crore in 1996-97 to Rs 67.6 crore for 1997-98.TNPL has also entered into a bulk supply contract with Modi Xerox for copier paper as an OE supplier and is looking out for similar tie-ups elsewhere.