BILT will fully integrate its paper operations by expanding pulp capacity for raw material security. Expanding its pulp mill capacity to fully meet its requirement is necessary to protect its margins, which were under pressure last year because of its dependence on imported pulp. The company which produced 8 lakh tonnes of printing and writing paper with net sales of Rs 3,795 crore is among the largest in India. BILT would put up two pulp mills, one in Malaysia, where work is now on, and another at Ballarpur.
The 40 per cent shortfall in pulp self sufficiency resulted in its margins of 26-27 per cent dropping to about 22 per cent because of non integration. In 2009-10 it produced nearly 2 lakh tonnes more than the previous year. But now the short fall will be bridged in two years. BILT has five paper units in India and one in Malaysia, which it acquired in 2007 for over $ 260 million. It had then announced it would double pulp capacity to 2.40 lakh tonnes. The expansion plan slowed down in the international finance crisis of 2008-09 and came back on track last year.
BILT would also put up a 300,000 tonne a year multilayer board machine in the next two years, indicating the company's plan to the packaging paper segment. Its operations have so far been in printing and writing paper, in which it is a market leader.