RSE COVID JK Paper

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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 (BSE) and the National Stock Exchange (NSE) of India. JKPL has three integrated pulp and paper facilities (all three in India): Central Pulp Mill (CPM) located at Fort Songadh near Surat in Gujarat state, JK Paper Mill (JKPM) near Rayagada in Odisha state, and Sirpur Paper Mill (SPM) at Kagaznagar in Telengana state (with SPM held through a step down subsidiary “The Sirpur Paper Mills Limited”). The proposed IFC investment would fund (i) the incremental working capital needs due to the impact of COVID-19; and (ii) any potential shortfall in cash flow generation for planned and future capital expenditures (together, the “Project”).JKPM has a capacity of 295,000 tpa of paper. Current production capacity at CPM is 160,800 tons per annum (tpa) of paper and paper board. JKPL is implementing a project at CPM to increase the paper and paperboard production capacity from existing 160,800 tpa to 360,800 tpa. The existing pulp mill of capacity 60,000 bone dry (BD) tpa will be replaced with elemental chlorine free (ECF) Chemical Wood Pulp (CWP) mill of 160,000 tpa capacity, which will be shifted from JKPM, Rayagada unit and re-installed at CPM. A new Bleached Chemi Thermo Mechanical Pulp (BCTMP) of 100,000 air dry (AD) tpa capacity, De-Inking Plant (DIP) of 150 tons per day (tpd) capacity and Secondary Fibre Treatment (SFT) Plant of 400 tpd capacity are also proposed as part of the project.The project also involves installation of new: 200,000 tpa paperboard machine; chlorine di-oxide (ClO2) plant; oxygen generation plant; evaporators; 950 tpd recovery boiler; 140 tpd lime kiln; 2000 m3/day re-causticizing plant; 190 tonne per hour (tph) boilers and 41.75 MW turbine-generators; upgradation of water treatment and wastewater treatment plant to meet increased hydraulic load; 7000 NM3/hr producer gas plant; and 100 tpd ground calcium carbonate plant. Some of the existing facilities will be decommissioned including the existing: pulp mill; ClO2 plant; oxygen generation plant; recovery boiler; two coal fired boilers of 50 tph steam capacity; and two turbo-generators of 3.125 MW capacity each. The project facilities will be installed within the existing premises of CPM plant.CPM requires about 1,63,000 tpa of wood (Eucalyptus, Casuarina and Subabool/Leucaena leucocephala) procured directly from farmers engaged in farm forestry on a guaranteed fixed price purchase basis at mill gate.  Since 2002 till date, CPM has undertaken farm forestry operations on 61,901 ha engaging 57,285 farmers (on their private land) from 11,985 villages across 3 states of India. CPM’s farm forestry operation involves farmers growing Eucalyptus, Subabool & Casuarina on their privately owned farmlands. CPM has developed capacity to produce high yielding, disease resistant, & site specific clonal plants to the tune of 13 million per annum and with this, CPM is covering 6500 hectares new farm forestry plantations every year. Post project, CPM’s wood raw material requirement will increase by 352,000 tpa, which will be met entirely from its own existing farm forestry operations.