Orient Paper to set up 1,500 crore cement plant

KOLKATA: The board of Orient Paper & Industries (OPIL) on Friday cleared the company's proposal to set up a Rs 1,473-crore three million tonne per annum (mtpa) greenfield cement manufacturing facility at Gulburga, Karnataka. The board also approved plans to set up a 50 MW power plant entailing an additional investment of Rs 247 crore.

Information trickling in suggests OPIL has already obtained the Karnataka government’s approval for the proposed project as well as its goahead to buy some 1500 acres-plus for the same.

The location of the proposed power plant and its use couldn't be ascertained. The greenfield Karnataka unit will, in all likelihood , be part financed by a mix of internal accruals, debt and equity, sources close to the group indicated.

The move to add 3 mtpa cement capacity is in sync with OPIL's aim to become a 12-15 million tonne cement manufacturing firm by 2015-16 .

OPIL board also approved the issue of convertible warrants aggregating Rs 1.20 crore to two promoter group companies namely Central India Industries and Shekhavati Investments and Traders at Rs 57.25 a piece to raise some Rs 70 crore long-term capital for the venture. An extraordinary general meeting has been convened on March 7 to seek shareholders' approval for the preferential issue.

The company has been looking to build up its cement capacities for sometime now. It has recently expanded the capacity of its Andhra Pradesh and Maharashtra units, boosting its overall capacity from 3.4 mtpa to 5 mtpa. A 50 mw captive power plant has also been installed at Devapur (Andhra Pradesh) plant.