Andhra Paper to invest US$20.29M in PM-3 upgrade at Rajahmundry unit

INDIA — Andhra Paper Ltd (APL), one of India’s leading integrated pulp and paper manufacturers, has announced a capital expenditure of ₹178 crore (US$20.29 million) to upgrade and rebuild its Paper Machine-3 (PM-3) at the company’s flagship Rajahmundry manufacturing unit in Andhra Pradesh.

The investment, approved by the Board of Directors on 5 August 2025, is aimed at boosting PM-3’s production capacity by 60 tonnes per day (TPD).

This translates to an additional 21,600 tonnes annually, significantly increasing the machine’s current output of 36,000 tonnes per annum (TPA).

Once completed, the Rajahmundry facility’s total output from PM-3 is expected to rise by 60%, supporting growing demand for high-quality paper products in both domestic and export markets.

The project will be financed through a mix of internal accruals and bank funding, with completion targeted within 13 months.

“This upgrade is part of our strategic focus on operational efficiency and product diversification,” said Chairman Shree Kumar Bangur.

“Our modernization drive since 2023 has already seen investments of ₹520 crore (US$59.29m) across the Rajahmundry and Kadiyam units, enhancing pulp mill capacity, improving energy efficiency, and expanding our product portfolio.”

Founded in 1964, APL is the only virgin pulp-based paper mill in Andhra Pradesh, supplying a wide range of writing, printing, and specialty papers.

The Rajahmundry unit, strategically located along the Godavari River, plays a central role in the company’s production and distribution network.

The latest investment comes at a time when India’s paper industry is experiencing steady growth, driven by rising literacy rates, government education initiatives, e-commerce packaging needs, and substitution of single-use plastics.

According to the Indian Paper Manufacturers Association (IPMA), domestic paper consumption is expected to grow at 6–7% annually over the next five years, with writing and printing paper alone projected to reach 5.4 million tonnes by 2027.

Upgrading PM-3 is also expected to improve operational sustainability, as modern paper machines are typically designed to consume less energy and water while delivering higher output.

Industry analysts note that such capacity expansions will help Indian manufacturers compete with imports, particularly from Southeast Asia, and cater to the premium segment’s increasing quality requirements.

APL’s broader modernization program has already yielded results, with improved product acceptance in export markets and an expanded customer base in Africa, the Middle East, and Southeast Asia.

The PM-3 upgrade is seen as a crucial next step in cementing the company’s position in a competitive and evolving industry.

Subscribe to our email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE