According to the agreement signed on Friday, ITC will pay BIPCO Rs 233 crore over five years. The transaction is expected to be completed over the next 45 days.
This acquisition strategically positions ITC to leverage its world-class capability in paperboards towards realising the vision of becoming a leader in the Afro-Asian region, a company statement said, quoting YC Deveshwar, chairman, ITC.
Kolkata-based ITCs existing paperboards facility is already operating at full capacity, and the acquisition will enable ITC to service the growing demand for high quality paperboards in the domestic market, as well as to widen its product footprints in the export markets, the company said.
The paperboards and specialty paper business is an important segment for ITC. With the company having invested heavily in pulp-making, poly- extrusion and super-calendering facilities, value-added products account for nearly half the total paperboard sales.
The Tribeni Tissues division and Bhadrachalam Paperboards division were integrated as the paperboards and specialty papers division during 2002-03. During the year, the combined entity reported a production of 2,33,574 tonnes.
With Indias total installed capacity adding up to one million tonnes spread across 100 players, ITC is betting on integration, scales and quality to grab market share. According to the company, Indias value-added paperboards segment is expected to grow by over 20 per cent a year, against the six per cent projected for the paperboards industry as a whole.