JK Paper III

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 JK Paper Limited ("JKPL" or the "Company"), an existing IFC client, is a leading Indian producer of office papers, packaging boards, printing and writing papers, and specialty papers, and is publicly listed on both the Bombay Stock Exchange and the National Stock Exchange of India. IFC’s investment aims to help the Company improve its productivity and restructure its balance sheet, in the process preparing the Company to capitalize on growth opportunities expected to be available in the sector in the short to medium term.  The proposed project consists of (i) capacity and efficiency improvement capital expenditures at the two existing plants and (ii) refinancing of existing debt (together, the "Project").  JK Paper has two integrated pulp and paper facilities: Central Pulp Mill (CPM) located at Fort Songadh near Surat in Gujarat state, and JK Paper Mill (JKPM) near Rayagada in Odisha state, both in India. Current production capacity at CPM is 160,000 tons per annum (tpa) of paper and paper board. JKPM has a capacity of 295,000 tpa of paper. At CPM, about 26,000 tpa of bamboo is purchased from tribal villages that have been given bamboo harvesting rights by the Gujarat Forest Department. Further, about 202,000 tpa of wood (Eucalyptus, Casurina and Subabool/Leucaena leucocephala) is procured directly from farmers engaged in farm forestry on a guaranteed fixed price purchase basis at mill gate. In all, the plant needs 250,000 tpa of wood and the shortfall is made up by imported pulp. CPM purchases the wood from about 2500 farmers representing a farm forestry acreage of about 50,000 ha. At JKPM, no bamboo is currently being procured or harvested. Previously, JKPM used to undertake bamboo working/harvesting in forests under a bamboo harvesting concession from Odisha Forest Department. About 1,000,000 tpa of farm forestry wood is procured at JKPM: (a) directly from farmers; (b) suppliers who procure from farmers; and (c) two cooperatives of tribal farmers who undertake farm forestry through the cooperatives. The cooperatives have about 2100 members. JKPM’s farm forestry program for private individual farmers is spread over an acreage of more than 100,000 ha and farm forestry through cooperatives is over an acreage of about 2400 ha.