Andhra Pradesh Paper Mills Limited

closed

Economic/Social Impact of the Project International Paper, USA a FDI company entered the Indian market by acquiring The Andhra Pradesh Paper Mills Limited, in short APPM, in the year 2011. The acquisition process was done through the due process of obtaining RBI approval being under the Automatic Approval process under the FDI guidelines. APPM is a public listed company. After acquisition, the Board of APPM resolved to change the name of the two units in terms of their geographical locations, which is Andhra Pradesh Paper Mills Limited Rajahmundry and The Andhra Pradesh Paper Mills Kadiyam. Both these Units had a running 5 year Coal Supply Agreement with Mahanadi Coalfields Limited since 2008. As the coal supply agreement was valid till June,2013 and July, 2013 respectively for the two units, an application was made to the Ministry of Coal in May, 2012 to effect those name change. Inability of the Coal Ministry to approve the name change has led to the situation where both the Units may have to be closed down due to non-supplies of coal to its captive power plants. The agreements lapsed already and renewal could not happen as the Ministry of Coal has been unable to issue a letter to Mahanadi Coalfields Limited so far. The Units jointly employs 2500 direct employees and an equal number of indirect labour, all of whom would be rendered jobless. International Paper has further plans to invest US$ 800 Million in greenfield projects which has been put on hold on account of the lack of certainty of government approvals.