Our Profile – Seshasayee Paper and Boards Limited

Seshasayee Paper and Boards Limited (SPB), the flagship company belonging to ‘SPB-ESVIN GROUP’, owns and operates

An Integrated Pulp, Paper and Paper board Mill at Pallipalayam, Erode, District Namakkal, Tamilnadu, India
A Paper Mill at Tirunelveli District, Tamilnadu, India

SPB, incorporated in June 1960, was promoted in association with a foreign collaborator M/s Parsons and Whittemore, USA. After commencement of commercial production, having fulfilled their performance guarantee obligations, the foreign collaborators withdrew in 1969.

Main promoters of the Company as on date are a group of companies belonging to the SPB-ESVIN group headed by Sri N Gopalaratnam.

1960 – 1970

SPB commenced commercial production in December 1962, on commissioning a 20000 tpa integrated facility in its Erode unit, comprising a Pulp Mill and two Paper Machines (PM-1 and PM-2), capable of producing, writing, printing, kraft and poster varieties of paper.
The capacity of Unit : Erode was expanded to 35000 tpa in 1967-68, by upgradation of PM-2 and addition of a third Paper Machine (PM-3).

1970 – 1990

In the second stage of expansion in Unit : Erode, undertaken in 1976, capacity was enhanced to 55000 tpa, through addition of a 60 tpd new Paper Machine (PM-4). A new Chemical Recovery Boiler and other facilities were added for enhanced requirement of utilities.
The Company’s paper plant at Erode was originally designed for using bagasse, as the primary raw material mixed with 20% bamboo fibre. Bagasse was being obtained from nearby sugar mill on substitution basis using oil fired boilers. With sharp increase in oil prices in 1970-71, the Company shifted over to the use of hardwood, at the time of its expansion undertaken in 1978. Raw material mix underwent a substantial change, with bamboo and hardwood forming 60% and 40%, respectively, of its raw material consumption. Soon Company started apprehending difficulties in procurement of bamboo. In 1981, it added one more digester, to increase the share of the hardwood in the furnish mix to 80% and restricting bamboo use to only 20%. With the commissioning of more wood based industries in Tamilnadu, there was again an apprehension about availability of hardwood.
As a long term strategy, the Company at this time decided on restructuring use of bagasse which was seen to be the most reliable source of fibre for the entire Industry.
In 1984, the Company promoted Ponni Sugars and Chemicals Limited, a sugar manufacturing unit as the captive source for bagasse supply. It added bagasse handling systems and modernised PM-1 and PM-2, to shift over to the use of bagasse.

1990 – 2000

SPB undertook various equipment balancing and modernisation programmes, for improving its operating efficiency, captive power generation capacity, etc., upto 1992-93.
The Company embarked on an Expansion / Modernisation Project in the year 2000 to enhance its production capacity from 55000 tonnes per annum, to 1,15,000 tonnes per annum by addition of a pre-owned Paper Machine – PM-5 and upgradation of some of the existing facilities, in its Unit : Erode.
The current installed capacity of Unit : Erode stands at 1,15,000 tonnes per annum while the annual production is in excess of 1,30,000 tonnes.

2000 – 2010

The Company in the year 2004 had set up a 21 MW Coal Based Captive Power Plant in its Erode unit, which made the unit self sufficient in power.
The Company embarked on a Major Mill Development Plan during 2006-07 in its Erode Unit, to improve and sustain the Environmental Compliance performance of the Company in line with the Charter on Corporate Responsibility for Environmental Protection (CREP). The project envisaged total replacement of the existing Wood Pulping Equipment of the Mill which is more than 30 years old with a 400 tonnes per day Pulp Mill from USA, equipped with advanced technological feature like RDH Pulping and installation of a new modern Chemical Recovery Boiler, a Black Liquor Evaporation Plant, a Lime Re-burning Kiln and a 16 MW Turbo Alternator Set.
This Mill Development Plan – I helped the Erode unit of the Company to be self-sufficient on pulp, with in-house pulp completely replacing the costlier imported pulp.

2010 – 2015

The Company in the year 2011, on a detailed techno commercial evaluation, decided to acquire a sick unit in Tirunelveli (Subburaj Papers Limited (SPMPL) – which had a capacity of 90,000 tonnes per annum), under a Scheme approved by the Hon’ble High Court of Madras.
SPL was originally set-up as a de-inked waste paper pulp based Paper Mill. This unit commenced operations in August 2009. The project encountered huge cost and time overruns. Despite all financial support from Banks to complete erection and commissioning, the unit could not be operated continuously. The promoters of SPL expressed inability to invest further funds and requested SPB to takeover the unit as Management Buyout.
With 100% Equity buyout from the promoters, SPB had acquired SPMPL and the name of SPMPL was then changed to SPB Papers Limited (SPBPL). SPB, while finalising the acquisition of SPBPL had clear plans to amalgamate the same with itself at the appropriate time. In the business interests of SPB and SPBPL and having regard to the synergistic linkages that exist between them, in the year 2012, the entire undertaking and the business of SPBPL was amalgamated with SPB.
SPB, with its technical, financial and managerial inputs, has successfully de-bottlenecked the plant operations of this unit and has stabilized production during 2011-12. The Company has successfully turned around this unit into a profitable operation.

2015 – 2018

During this period, the Company completed Phase – I & II of the Mill Development Plan – II (MDP – II), at a cost of Rs 125 crores, in Unit : Erode. The successful implementation of MDP – II has helped the company to increase the production of Paper to 132 000 tonnes per annum and the production of Unbleached Wood Pulp to 145 000 tonnes per annum, in Unit : Erode.
The Company had also successfully completed in the year 2017, a Mill Expansion Plan in its Tirunelveli Unit, at a cost of Rs 75 crores to upgrade the quality of the products.

2019 – 2022

In the FY 2019-20, the Company had embarked on an expansion cum modernisation project in Unit : Erode -- Mill Development Plan – III, at a Cost of ₹ 315 crores, with key objective being upgradation and modernisation of paper machines, wood pulp mill and recovery island.
Midway in the project, Covid-19 pandemic broke out resulting in nationwide / global lockdowns. Also, the stand-off between India and China resulted in logistics challenges and non-availability of on-site engineers from China.
Also, during this time, Packaging Industry witnessed unprecedented growth opportunities and as part of de-risking strategy, the company decided to get equipped with facilities to manufacture multi-layer products like Kraft Liner Boards, Cup Stock, Carton Boards, etc.
All these had resulted in altered scope of equipment than originally envisaged in the Project documents. The Company altered the project scope with utmost care to ensure that the critical objectives of the project were not diluted. Accordingly, the Project Cost was down revised to Rs 288.0 crores.
Major upgradation works in Chemical Recovery Plant, Wood Pulp Mill, Paper Machine – 5, Paper Machine – 2 and Paper Machine – 4 have been successfully completed and the machines are running at designed capacities and efficiencies. The project cost, in entirety, has been met out of internal accruals, with prepayment of the Term Loans availed.
The Company has achieved the following objectives successfully from the project MDP-III and has started realising the benefits from the project, in its Erode unit :

Paper Capacity has been increased to 1,65,000 tonnes p.a.
Pulp Capacity has been increased to 1,54,000 tonnes p.a.
Recovery Island has been upgraded
Successful foray in to multi-layer boards Segment, by altering 2 machines to manufacture Boards.

2023

Acquisition of assets of M/s. Servalakshmi Paper Limited, On a Going Concern basis

SPB had emerged as a successful bidder on the e-auction held for Sale of assets of M/s. Servalakshmi Paper Limited.
Company is awaiting Closure of liquidation formalities to commence the work on repair, refurbishment and upgradation of the Plant & Machinery of this unit.
Once refurbished and upgraded, this mill is expected to have a capacity of 75000 tpa of Fine Papers.
Production expected to commence in 12 months’ time.

Mill Development Plan – IV (MDP-IV) in Unit : Erode

Environment Clearances applied for project Mill Development Plan – IV (MDP – IV) in Unit - Erode, to augment

Paper Capacity from 1,65,000 tonnes p.a. to 2,31,000 tonnes p.a. and
Pulp Capacity (Wood and Bagasse) from 1,80,000 tonnes p.a. to 2,52,000 tonnes p.a.

Phase-I of the project will consist of activities for enhancing the pulp capacity to 2.52 lakh tonnes p.a. with a marginal increase in paper capacity.
Enhancing pulping capacity will help to replace costlier purchased pulp (imported pulp / deinked pulp).
Project expected to be completed in 30 months after receipt of Environmental Clearances.