It maybe recalled that Titagarh Paper Mill (a sick unit with a capacity of 45,000 tpa) was taken over by Titagarh Industries and the paper company has now become a division of the latter. A sum of Rs 21 crore was paid by way of acquisition costs to the financial institutions.

The funds for this project are to be generated from enhanced equity, rights issue, loans, internal accruals. Chowdhary said Rs 300 crore out of the Rs 460 crore had been tied up. Titagarh was putting in Rs 45 crore through internal accruals and the equity of Titagarh Industries which is Rs 12 crore is going to be enhanced to Rs 90 crore. The two-phase paper project will be completed by the year2000. However the plant will start operating at 60 per cent capacity from next year.

The products produced will be a mixture of newsprint, printing and writing paper, tissue paper and security paper (stamp paper, other government documents and share certificates).

After completion, the capital cost of newsprint produced will be 26,000 per tonne initially, considered to be among the lowest in the industry. The debt equity ratio will be 1:1.6, Chowdhary said.

There is a demand of 1.5 lakh tonnes of newsprint from the east, which is currently being met by imports and from other manufacturers elsewhere. Apart from trying to close this gap, the company plans to make 15,000 tonnes to 20,000 tonnes of security paper. Jute pulp will be used for this purpose (jute fibre is five times the length of bamboo and yields greater quantities of pulp in comparison). The other kinds of pulp to be used will be wood and bamboo-based pulp and pulp from waste paper which will be utilised for printing and writing paper andnewsprint respectively. The West Bengal government is planning to chip in with bamboo plantations linked to a social forestry programme.

Meanwhile, the de-inking plant to be used for waste paper treatment is ready for use and the company is currently searching for finance to source two more paper machines. It has already got six paper machines with a capacity of 70,000 tonnes. One of the machines would be an imported second-hand one from Europe having a capacity of one lakh tonnes. The sizes of paper mills globally have increased to 3 lakh tonnes and mills in Europe were willing to dispose of their 1 lakh tonne capacity machines which had become obsolete, Chowdhary said.

Titagarh Industries has separated its wagon-making unit to a separate company. This year Titagarh Wagons Limited has got an order of 1,500 wagons from the Indian Railways (net value of order Rs 40 crore). Titagarh Industries, an engineering company manufacturing railway components, frames coaches also undertaking defence projects ordershad a turnover of Rs 82 crore last year with a net profit of Rs 7.79 crore.