Tamil Nadu Newsprint and Papers Ltd expects to achieve financial closure for its two-lakh-tonne packaging board project by October-end, according to reliable sources.

The Rs 1,200-crore greenfield plant, to come up in Tiruchi district, will be funded with 80 per cent debt and 20 per cent internal generation. The company has called for global tenders for 30-MW power plant equipment, two 85-tonne boilers and board machines.

The project is expected to be completed by March 2016 and will add to TNPL’s current capacity of about four lakh tonnes of production annually.

Responding to shareholders at the company’s AGM, A. Velliangiri, Deputy Managing Director, said the multilayered coated board plant will produce specialty boards including white-line chip board, folding box board and cup stock – board used to make disposable cups and related products. This is a high-growth segment that is expanding at more than 12 per cent a year, vis-à-vis paper, which is growing at about half that rate, he said.

The company is comfortable on the funding side, with debt relating to its previous expansions almost completely repaid. Loans relating to the Rs 525-crore pulp mill development plan have been fully repaid and more than half the debt linked to Rs 780-crore paper production expansion has been paid and will be completed by June 2015. At no point will the debt-equity ratio exceed 1:1, Velliangiri said.

balaji.ar@thehindu.co.in