CM to inaugurate KPPL on May 19

Press Release

• 18-05-2022

Kottayam, Kerala : The state-owned Kerala Paper Products Limited ( KPPL ) ,Velloor is soon to start producing Newsprint. As part of restructuring the unit, Chief Minister Pinarayi Vijayan will inaugurate the manufacturing of newsprint on May 19 at 11 am. The first phase of restructuring was completed before the scheduled time said Industries minister P Rajeeve informed the media at the press conference held at KPPL, Velloor. During the inaugural function, Industries minister P. Rajeev, Co-operation minister V.N. Vasavan, M.P s Jose K Mani, ThomasChazhikkadan, MLA’s Oommen Chandy, C.K.Asha, Mons Joseph, Industries Principal Secretary A.P.M. Mohammed Hanish, and KPPL special officer Prasad Balakrishnan Nair will participate.

 In pursuance of the Industrial Development of the State, a long-term Principal Agreement was entered in the year 1974 betweenGovernment of Kerala and Hindustan Paper Corporation Limited (HPC)(which was under the administrative jurisdiction of Government of India) for the establishment of a large-scale Paper Manufacturing unit at Velloor, Kottayam. Government of Kerala (GoK) has agreed to provide specified quantity of wood raw materials, water, power anddevelop required infrastructure for facilitating the establishment of the unit.  In addition,in the year 1979, GoK has acquired and leased about 700 acres of land for the operations of this paper manufacturing unit as Hindustan Newsprint Limited (HNL).The story of HNL commences from these benevolent initiatives by the State of Kerala. During the year 1982, the plant got commissioned and the operations started. The performance of the company which exhibited scintillating record during the first three decades, started declining during the subsequent decade due to various reasons and finally the operations got stopped in January 2019.

At this juncture, as the foremost benefactor and key stakeholder, GoK expressed its willingness to take over the reins of the company and turn it around.  Government of India has not heeded to this request and subsequently Corporate Insolvency and Resolution Process (CIRP) was initiated by NCLT Kochi Bench on 28.11.2019. As part of the CIRP, Expression of Interest (EoI) was invited from prospective Resolution Applicants. Kerala Infrastructure Development Corporation (KINFRA), on behalf of Government of Kerala has submitted its Resolution Application.  NCLT, Kochi has approved the resolution plan submitted by KINFRA and accordingly the company was taken over by the State Government. The Registrar of Companies (RoC) has accorded approval and issued the Certificate of Incorporation dated 20.12.2021 for the incorporation of the company as Kerala Paper Products Limited (KPPL). After thetakeover, the Government hasimmediately initiated necessary steps to revive and restart the operations of the Company on a priority basis and a detailed strategic plan in four phases for the sustained survival of the company was rolled out.

The revival of the existing plant and machineries, the ‘Revival and Restart Programme (RRP)’, is configured into two Phases. Phase 1 of the restart  programme entails the revival of Paper Machine, De-inking Plant and  Power Boilers and associated auxiliary plants and utility services. An amount of Rs 34.30 Cr wasallocated for the repairs and maintenance in Mechanical, Electrical and Instrumentation engineering areas in the Phase 1 plants. As per the original plan, duration of the Phase 1 programme was 5 months.  Phase 2 of the restart programme is focusing on the revival activities in Mechanical and Chemical Pulping Plants which are using wood raw material along with their auxiliary plants. The duration for Phase 2 is 6 months with a total expenditure of Rs 44.94 Cr.

By the completion of Phase 2, the entire existing facility shall be fully functional and paper production shall be undertaken with own pulping streams( recycled pulping stream and the wood pulping streams) and thereby doing away with the requirement of purchased pulp. The total outlay for the revival plan is Rs 154.39 Cr including the working capital component of Rs 75.15 Cr (Phase 1 & 2). At the successful completion of the revival programme, KPPL shall be able to commence the operations with the production of lower grammages of Newsprint (42 GSM & 45 GSM) and un -surface sized grades of Writing and Printing Paper (52 GSM-70 GSM), mainly for notebook and textbook segments.

Domestic and Global markets are witnessing furious growth for the packaging and paper board industry, both Industrial and Retail packaging, in line with the growth in the e-commerce sector, online retail, FMCG, pharmaceuticals, food & beverage etc., and the growing regulations regarding the single use plastics. With a view on long term sustained survival, KPPL intends to leverage these emerging opportunities by rolling out the Capacity Expansion cum Product Diversification Programme, by strategically venturing into the Packaging and Paper Board segments.

Phase 3 of the strategic plan for capacity expansion and product portfolio diversification, entailing an investment of Rs 650 Cr and 27 months for implementation for the manufacture of various grades of paper board shall commence immediately after the completion of Phase 2. Phase 4 which is centering around rebuilding the existing machine for the production of packaging grades of kraft paper requires an investment of Rs 350 Cr and a timeline of 17 months for implementation. The funds for Phases 3 and 4 are expected to be raised with the support of Banks and other Financial Institutions. The completion of all the four phases in about a total timeline of 46 months shall propel KPPL as one of the leading players in the Indian Paper Industry with a turnover of about Rs 3000 Crores (at the current market prices) and a production capacity of more than 5, 00,000 MT per annum.

Exactly as planned,the company was re-opened and the Phase 1 revival activities commencedon January 1, 2022 as a new year gift to the State of Kerala. As part of the Phase 1 of the Revival and Restart Programme (RRP), maintenance activities were simultaneously launched in Paper Machine, Deinking Plant&Power Boilers on January 1, 2022. Currently the revival activities have been completed and production trials successfully completed in the Deinking and Power Boiler plants and Production trials are being carried out in the Paper machine plant. First reel of paper after the revival  is set to roll out on 19th May, 2022. Production trials and initial production is planned using own Deinked pulp and purchased pulp from Tamilnadu Newsprint and Papers Limited (TNPL). It is significant to note that the Phase 1 programme which is scheduled to be completed by May 31, 2022, as per the original plan is getting successfully completed ahead of schedule  as a result of theintense and committed efforts undertaken by all sections of the employees for the last four monthssince January 1, 2022. The Phase 2 programme was launched on March 17, 2022 and is progressing as per schedule. Currently 252 employees, both managerial and non-managerial combined, are engaged for the restart activities of Phase 1 & 2.

In order to ensure sufficient availability of wood raw material for the operations of the own wood pulping streams, two high level meetings were held by Minister for Industries in the presence of Minister for Forest on 21.04.22 and 26.04.22 respectively and the proposal for meeting the immediate requirement of KPPL is being submitted to the Cabinet for approval. Also, a state-wide ‘used paper collection mechanism’ to meet the raw material requirement for the re-cycled pulping plant is being formulated by leveraging the extensive ground level network of the Kudumbasree Mission and the programme is set to be rolled out shortly.

The revival of erstwhile HNL, which was under the administrative jurisdiction of Government of India and which was closed for more than 3 years and was on the verge of liquidation and extinction, as Kerala Paper Products Limited is a gigantic leap in the Industrial scenario of the State of Kerala. This definitely signals an alternate model of Industrial development and a big message for the entire country.This is a historical, ‘one of its kind’ of moment as rarely these kinds of ‘coming back’happens in the Industrial history of the country.

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