ITC strengthens paperboard biz with acquisition of Aditya Birla Real Estate's CPP for ₹3,498 cr

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Established in 1984 at Lalkuan (Nainital, Uttarakhand), CPP is a major player in the Indian Paper industry, with an installed capacity of 4.8 Lakh MT per annum
ITC strengthens paperboard biz with acquisition of Aditya Birla Real Estate's CPP for ₹3,498 cr
India is the fifth-largest producer of paper and paperboards in the world. Credits: Getty Images

Diversified group ITC Limited will acquire major paper manufacturer Century Pulp & Paper (‘CPP’) from Aditya Birla Real Estate Limited (‘ABREL’), strengthening its position in paperboards and specialty papers business. The total transaction value of the deal is ₹3,498 crore.

Established in 1984 at Lalkuan (Nainital, Uttarakhand), CPP is a major player in the Indian Paper industry, with an installed capacity of 4.8 Lakh MT per annum.

B Sumant, Executive Director, ITC, says the acquisition will engender new opportunities in the domestic and international markets. "The acquisition aligns with the Company’s strategy of driving the next horizon of growth in the Paperboards and Specialty Papers Business by expanding capacity at a new location, considering that the existing facilities are already saturated."

Sumant says the strong linkages to afforestation and livelihood creation pursued by both entities contribute meaningfully to national priorities. "We are delighted to welcome CPP into the ITC fold and together we will continue to set new benchmarks in customer satisfaction, operational excellence and sustainability.”

India is the fifth-largest producer of paper and paperboards in the world, with an estimated production of around 23 million MT per annum and an annual industry turnover of over ₹80,000 cr. India’s per capita consumption at appx. 16 Kg. per annum is as low as compared to the global average of 57 Kg.

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The demand for paper and paperboards is growing at 6%-7% per annum in India, translating to an incremental demand of over 1 million MT annually. End-user industries such as FMCG, food service or quick service restaurants, pharmaceuticals, e-commerce, education & stationery and increasing demand for sustainable packaging solutions are expected to be the key drivers of growth going forward.

ITC’s Paperboards & Specialty Papers Business is a major player in the industry, offering a range of products manufactured at its four facilities with an annual throughput of over 1 million MT.

A statement says CPP is a one-of-a-kind asset with a strong strategic fit with ITC’s Paperboards & Specialty Papers Business. The acquisition is expected to add scale and economies to existing operations with potential for further capacity expansion.

The business expects to drive structural improvement in the profitability of CPP through several value unlock interventions such as capacity debottlenecking, product quality upgrade, efficiency improvement leveraging TPM/Digital initiatives, supply chain optimisation, overhead rationalisation, and procurement efficiencies.

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