Defunct Central PSU becomes centrepiece of alternative industrial development model by Kerala

Bogged down by inept administration, the Hindustan Newsprints Limited – a centrally-owned public sector unit that had long dominated Kerala’s industrial scene – ceased operations almost four years ago. But this iconic piece of industrial infrastructure, located on the banks of the Muvattupuzha river, is now the centrepiece of an alternate model of development propounded by the Left Democratic Front (LDF) government of the State.

On Tuesday, when the State celebrated its 66th birth anniversary, the erstwhile industrial colossus resumed commercial production of paper. The first load of paper, rolled out by the unit, was flagged off by Finance Minister K.N. Balagopal at a function presided over by Industries minister P. Rajeeve.

“Kerala is scripting a new history by taking over a defunct Central PSU through auction and resuming its industrial-scale operations,” said P. Rajeeve, the minister for industries. The company, according to him, is expected to rake in profits from March onwards and with this, it will start recruiting employees on a permanent basis.

“The company intends to achieve an annual turnover of ₹3000 crore with a production target of five lakh metric tonnes. In the process, it will also create as many as 3000 jobs, which is equal to the total jobs that the public sector could create in the State over a period of four to five years,” he added.

The company sources said the commercial operations had begun with the production of high quality 45 gsm newsprint. “As the plants attain stability in production, the unit will also focus on the production of 42 gsm newsprint and 52-70 gsm writing and printing paper,” they said.

The HNL had been facing liquidation when the Kerala government took it over with a National Company Law Tribunal approved bid of ₹146 crore. The fund, mobilised through the Kerala Infrastructure Investment Fund Board (KIIFB), was disbursed through the Committee of Creditors – a consortium of banks.

Afterwards, the State has chalked out a revival of the unit in four phases, which resumed operations as the Kerala Paper Products Limited (KPPL) from January, 2022.

The outlay for the revival plan comprising the first two phases was ₹154.39 crore and the third phase envisages capacity expansion and product portfolio diversification, entailing an investment of ₹650 crore in 27 months.

The fourth phase of operations would be centered on restructuring the existing machinery towards production of packaging grades of craft paper. It requires an investment of ₹350 crore and a time period of 17 months for implementation. The development activities in the third and fourth phases aim to move into diversification after increasing productivity.

To address the shortage of raw materials, a decision to launch commercial cultivation of bamboo has also been made.

Alongside reviving the paper production unit, a land utilisation plan for the 700 acre property too has been initiated, which envisages opening an industrial park for natural rubber based industries under Kerala Rubber Limited.