Jakarta (Big Wire) India’s Aryanav Paper Mills Private Limited has raised 21 million in low cost debt as it fights rising cost of recycle waste paper pulp, one of the raw material for manufacturing of Kraft Liner paper.
It entered into a long term financial association with Linetrust International Offshore Limited of the UK . Under this association the UK based firm will provide 21 million dollar as long term debt.
This was announced at a function to organize the joint association ceremony at the Inter-Continental Mid Plaza Hotel, Jakarta, Indonesia.
The Telangana based Aryan paper mills is engaged in the business of manufacturing of Hi-BF Kraft Liner and Top White Liner in the state.
The company will use the money to setup a 54,000 tonne per annum Hi-BF Kraft Liner and Top White Liner manufacturing unit.
“This association can change the dynamics of the paper industry in India. Currently banks and financial institutions lend to corporates at around 11 and 12% per annum. With Linetrust providing long term debt at 4% max par annum will have a huge impact on the bottom-line of the company” said DhruvGoel , director of Capitico PRG Pvt. Ltd.
“This will help Aryanav Paper to leverage its strength by filling the vacuum created by the debt ridden paper manufacturing companies in India who have either reduced their production capacities due to increased raw material costs or have been forced to shut down operations due to dearth of cheap working capital.”
Citing the example of Ballarpur Industries Limited, one of the largest makers of writing and printing papers in India, who have run into problems recently due to a heavy debt burden and are forced to sell its holding companies to raise capital, Goel said , “other companies too are facing similar problems. Low cost debt will definitely help companies to turn around.”
According to “India Paper Industry Forecast & Opportunities, 2017” the paper industry in India is expected to grow at the CAGR of around 9.6%.
This will make the revenues of paper industry of India to reach up to USD 11.83 Billion by 2017. About 70% of the total installed capacity of paper production in India is accounted by Gujarat, West Bengal, Orissa, Andhra Pradesh, Karnataka and Maharashtra.
Linetrust International in its statement has underlined the need for low cost debt for corporates to fight rising cost of recycle waste paper pulp, one of the raw material for manufacturing Kraft Liner paper.
With affordable debt under 4% p.a. to corporates, Linetrust will help create a major impact on the topline and bottomline of companies.
The Linetrust Group, whose ASEAN office is in Jakarta, Indonesia, has been in the business of lending in the traditional brick and mortar sectors has now seamlessly aligned its business strategies to adopt to the new age technology financing viz. bio-technology, e-commerce and other information technology related business verticals.
The trade finance business of the firm finances cross border transactions. It’s a form of working capital.
The group has decided to open a close ended fund to the tune of US$ 600 Mn to exclusively cater to the ASEAN markets with prime emphasis on the Indonesian Markets, shareholder Manoj Todi said.
Sailesh Hiranandani , another shareholder handling ASEAN debt fund market has been of the opinion that all these will help improve the manufacturing sectors which are fighting increasing interest costs and rising raw material prices affecting the domestic industries.
Amit Gupta, Director, Aryan Paper Mills said “This association with Linetrust will help us to create a venture which will be useful in creating the best Liner Papers in the market.
“With the cost of debt coming down drastically, it will have a direct bearing on our topline and bottomline thus enabling us to compete healthily vis-à-vis our peers who have been battling rising raw material costs and high interest debt burden.”
Aryanav group was established in 1948 in Mumbai with a small capital and a large vision. It focuses on the latest technology so that it can take utmost care of ecology. The low cost debt which it will receive from Linetrust will help it achieving its goals.