Rainbow Papers Planning Paper Mill Joint Venture in Nigeria

July 8, 2010 - India's Rainbow Papers recently announced plans to set up a 150,000 tons per year paper mill in Nigeria, which would serve African markets.

Ajay Goenka, chairman and managing director of Rainbow Papers, said the company hopes to form a joint venture partnership with a Nigerian company.

Rainbow said that it has received firm commitment for concessions from the Nigerian Government. “Of the total cost of Rs 350 crore, our investment would depend on the equity structure we finalise with the joint venture partner,” Goenka said.

Gujarat, India-based Rainbow Papers exports about 70,000 tons of paper products to African countries, and with a production unit in Nigeria, would be able to tap that market more efficiently along with saving on logistic costs.

Considering Pulp Mill Purchase
In an effort to secure its pulp supply requirements, Rainbow is exploring the possibility of acquiring a pulp plant either in Canada, Indonesia or Malaysia, Goenka said.

According to a report in the Hindu Business Line, Rainbow has drawn up a capex plan of Rs 500 crore in the next two years and is weighing various options for fund raising. “We have to put up these proposals before the Board for approval before deciding on the fund raising proposals, which would take about two years,” Goenka said.

About Rainbow Papers
Rainbow Papers Ltd. operates a paper and paper board mill with a total production capacity of about 550 tons per day. The faciltiy houses 5 paper machines which are equipped with seven layer mould sections, MG cylinders, size press, 3 units of coaters and gloss calenders, two cast coating systems and one creping machine. The company is currently underway with an expansion plan that will increase production capacity to 1135 tons per day by January 2011.

SOURCE: Hindu Business Line and Rainbow Papers

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