Paper manufacturing company JK Paper Ltd has joined hands with Japan’s Oji Holdings Corporation and Marubeni Corporation for manufacturing and sales of corrugated packaging products of Oji India Packaging Pvt Ltd (OIPPL), the company said in a filing to stock exchange.
OIPPL, which was set up four months ago, is setting up a manufacturing facility at RIICO Neemrana Industrial Park Phase 3, Rajasthan. The plant will absorb investment worth Rs 150 crore and the company has been set up with a paid up capital of Rs 75 crore. Oji will hold 60 per cent and remaining 40 per cent will be split equally between Marubeni and JK Paper. This means JK Paper would bring in around Rs 15 crore ($2.8 million).
This new plant will have a capacity to manufacture 34,000 tonnes of packaging products per annum. The firm is targeting its consumers in the areas of auto components, high-end electronic and consumer durables sectors for corrugated packaging products.
After the stake acquisition, OIPPL will be renamed as Oji JK Packaging Pvt Ltd.
Founded in 1962, New Delhi-based JK Paper Ltd offers both paper and paper board, including coated-paper, branded-cut size copier paper and packaging board. It is one of the top organised sector players in paper manufacturing behind Bilt and is especially strong in the branded copier segment of the market. Consumer products giant ITC has a large presence in the packaging segment of paper products in the country.
In 2011, April, JK Paper raised Rs 225 crore from a consortium of Dutch, French and German development financial institutions (DFI), through an issue of foreign currency convertible bonds (FCCBs). Prior to this in 2006, IFC and Goldman Sachs invested $22.53 million and $17 million respectively in the company.
Oji, which clocked around $1.3 billion in revenues last financial year, is one of the largest Japanese paper producers. Its move to build presence in India with a plant mirrors signs of interest by other international paper companies to set up India operations. Last year, world’s largest paper company, International Paper, had acquired majority stake in Andhra Pradesh Paper Mills in the biggest inbound deal, a rare move in a sector where global giants have largely skipped the market due to lower scale of operations and entrenched local players.
The other partner in the venture, Marubeni, is involved in the handling of products and provision of services in a broad range of sectors. These areas encompass importing and exporting, as well as transactions in the Japanese market, related to food materials, food products, textiles, materials, pulp and paper, chemicals, energy, metals and mineral resources, transportation machinery, and includes offshore trading. The company's activities also extend to power projects and infrastructure, plants and industrial machinery, finance, logistics and information industry, and real estate development and construction.
(Edited by Prem Udayabhanu)
