KOCHI: In a major boost to Kerala’s public sector manufacturing revival, the State Cabinet on Wednesday approved a Rs 741-crore expansion project for Kerala Paper Products Limited (KPPL), the state-owned paper manufacturer at Velloor in Kottayam district.
The expansion is aimed at enhancing production capacity and diversifying product lines to tap into rising demand for high-quality paper and packaging products, driven by plastic restrictions, changing consumer preferences and the rapid growth of e-commerce, food delivery and retail sectors.
KPPL was formed after the Kerala government acquired the assets of Hindustan Newsprint Limited (HNL), a Central Public Sector Undertaking that was shut down in 2019. The National Company Law Tribunal had approved the State government’s Rs 146-crore bid to take over the company’s assets. The unit was rebranded as KPPL in 2021 and officially commenced commercial operations under the State government in 2022.
Of the Rs 741-crore outlay cleared by the Cabinet, Rs 175 crore will be infused as State government equity and Rs 25 crore as equity participation by the Kerala State Industrial Development Corporation (KSIDC). The remaining Rs 541 crore will be mobilised through a consortium of banks.
The project focuses on strengthening KPPL’s presence in writing and printing paper, copier paper, specialty grades and high-quality packaging boards. Though daily demand for such grades is high in Kerala, they are largely sourced from other states at higher freight costs. The expansion also envisages the development of a paper cluster to fully leverage the potential of the sector.
Once the project is completed and the upgraded plants become fully operational, KPPL is expected to achieve an annual turnover of Rs 1,500 crore. The expansion is slated for completion within 24 months.
Industries Minister P Rajeeve said the revival and expansion of the erstwhile HNL marked a historic milestone in India’s industrial history. He noted that this was perhaps the first instance in the country where a State government had taken over a closed Central PSU, successfully revived it and proceeded with a large-scale expansion plan.
Describing HNL as once India’s largest newsprint manufacturer with significant scale and technology, the Minister said bringing the unit back into operation after more than three years of closure and steering it towards diversification and growth was an achievement without parallel.