A new development is unfolding in the Paper Industry. ITC Limited, a conglomerate renowned for its diverse portfolio ranging from cigarettes to consumer goods, is reportedly leading the bid to acquire Century Pulp and Paper (CPP) from the Aditya Birla Group.
Not far behind is West Coast Paper Mills, a prominent player in the paper manufacturing sector. This potential acquisition, valued between ₹3,000 to ₹3,500 crore, could reshape the landscape of the Indian paper industry. economictimes.indiatimes.com
The Contenders: ITC and West Coast Paper Mills
ITC Limited’s Paperboards and Specialty Papers Division has a well-established presence in the paper and packaging sector. The acquisition of CPP would boost ITC’s production capacity and enhance its market share in the paper industry.
On the other hand, West Coast Paper Mills, promoted by the Bangur family, is also vying for CPP. Known for its extensive range of paper products, acquiring CPP would significantly strengthen West Coast’s position in the market.
According to sources, JK Paper was also vying for the acquisition, but its offer is no longer being considered at this stage.
Century Pulp and Paper: A Valuable Asset
CPP, a part of the Aditya Birla Group, is a significant player in the pulp and paper sector. The company boasts a diverse product portfolio, including writing and printing paper, tissue paper, and paperboards. Its state-of-the-art manufacturing facilities and a strong distribution network make it an attractive acquisition target for companies aiming to expand their footprint in the paper industry.
Aditya Birla Group’s Strategic Shift
On September 18 last year, the Aditya Birla Group rebranded Century Textiles Ltd as Aditya Birla Real Estate, signaling a shift in the company’s priorities. The group expanded its business portfolio by investing in real estate development around eight years ago. The pulp and paper division continues to operate under this newly rebranded entity.
CPP’s Production Capacity and Key Markets
Century Pulp and Paper (CPP) operates a plant in Nainital with an annual production capacity of 480,000 tonnes. The company generates operating profits between ₹600 and 700 crore.
CPP manufactures a diverse range of paper products, including writing and printing paper, copier paper, tissue paper, and paperboard.
Paperboard, a strengthened form of paper, is widely used as packaging material in the consumer goods, pharmaceutical, and cosmetics industries. The cigarette industry is also a significant consumer of paperboard.
CPP Key Details | |||
Set up year | Capacity | Operating Profit | Division |
Aditya Birla Group’s Pulp & Paper Division Set up in 1984 | 480,000 Tonnes Paper Making Capacity | ₹600 – ₹700 Crore | Division of Aditya Birla Real Estate |
Strategic Implications of the Acquisition
For ITC, acquiring CPP aligns with its strategy to diversify and strengthen its non-cigarette FMCG (Fast-Moving Consumer Goods) portfolio. Adding CPP’s assets would enhance ITC’s capabilities in the paper and packaging segment, supporting its various businesses, including packaged foods and personal care products.
By acquiring CPP, West Coast Paper Mills would significantly boost its production capacity and product offerings, enabling it to cater to a broader customer base and explore new markets.
CPP Acquisition: The Background Story
According to industry insiders, discussions surrounding the acquisition of Century Pulp and Paper (CPP) gained traction in December. The Aditya Birla Group had previously explored selling its pulp and paper business in 2017 but ultimately decided against it.
The divestment of CPP is expected to generate significant capital for the Aditya Birla Group, one of India’s largest conglomerates with interests spanning metals, cement, financial services, retail, and telecom. The group has also expanded its footprint into new sectors, reinforcing its diversified business strategy.
The Road Ahead
Industry observers keenly watch the developments as discussions progress. The Aditya Birla Group had previously considered divesting CPP but did not proceed.
This time, with advanced-stage talks and substantial offers, a decision is anticipated soon. The outcome of this acquisition battle could have far-reaching implications for the Indian paper industry’s competitive dynamics. economictimes.indiatimes.com
Conclusion
The potential acquisition of Century Pulp and Paper has set the stage for a significant shift in India’s paper industry. The coming weeks are crucial, with ITC Limited leading the race and West Coast Paper Mills in close pursuit.
Stakeholders and industry analysts await the final decision, which can reshape the market landscape and influence future strategies within the sector.
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FAQs
What is ITC bidding for?
ITC has placed a ₹3,500 crore bid for Century Pulp and Paper, a division of Century Textiles and Industries. This acquisition would expand ITC’s presence in the paperboard and specialty papers sector.
Who is the competitor?
West Coast Paper Mills is also competing to acquire Century Pulp and Paper. The outcome of this competition will determine the company’s future ownership.
Why is ITC interested in Century Pulp and Paper?
This acquisition aligns with ITC’s strategy to diversify its business portfolio and strengthen its position in the paper industry. It would provide ITC access to Century’s production facilities and customer base.
What does this mean for Century Textiles?
Century Textiles’ sale of its pulp and paper division would allow It to streamline its operations and focus on its remaining businesses, such as real estate and chemicals.
What is the significance of this deal?
This deal is significant due to its size and the involvement of major players in the Indian industry. The outcome could reshape the competitive landscape of the paper sector.
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I’m Archana R. Chettiar, an experienced content creator with
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