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Sunshine Papers India limited

Strictly Private & Confidential. Sunshine Papers India limited . Information Memorandum.

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Sunshine Papers India limited

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  1. Strictly Private & Confidential Sunshine Papers India limited Information Memorandum Factory: Donthamuru Village, Balabadrapuram - Rajanagaram Road, Rangampeta Mandal, East Godavari District, A P , INDIA October 2013

  2. Paper Machine Tissue Machine

  3. Concept • To Set up Export Oriented Tissue Paper Mill (EOU) to produce International standard Premier quality Specialty Tissue paper using imported primary & secondary fiber with latest and fully automized paper machine.

  4. Project Scope • Capacity : 15,000 TPA Tissue Manufacturing Facility • Product : Tissue Paper in Rolls, Sheets & Converted Tissue • Location : Donthamuru village, Balabadrapuram – Rajanagaram Road, Rangampeta Mandal, East Godavari District • Estimated Project Cost : Rs 55 Crores ( US $ 9 million) • Raw-Material Primary Fiber (Wood Pulp ) and Secondary Fiber (Recycled Fiber / Waste Paper) Gas for the Power Plant • Future Strategy : Add 250 TPD Board Manufacturing Facility

  5. Promoters The Core Promoter Management team consists of professionals having vast experience in India and abroad in project mgmt, technology & engineering, fiber mgmt, marketing & commercial, etc. The core team has over 140 man-years of direct experience in general management, Paper Making, Paper Marketing Financial Management and networking

  6. Location Land: The company has acquired 29 acres of land at Donthamuru village, Balabadrapuram - Rajanagaram Road, Rangampeta Mandal, East Godavari District. Advance Paid for another 9 Acres adjacent land and Registration is under process. • Location Advantage: • Proximity to the National highway, Railway Station & Airport (Rajahmundry) 25 Kms, Sea Port (Kakinada) 35 Kms. • Abundant water available in the site and also near by lake and canal • Effluent Disposal: Already built drainage is passing adjacent to the site, which facilitates for the disposal of effluent if any. • Availability of trained man-power • Proximity to Natural gas

  7. Raw-Material • Raw-materials required are Primary Fiber (Wood Pulp / Virgin Fiber) and Secondary Fiber (Recycled Fiber / Waste Paper) for the paper unit and Gas / Coal for the Power Plant Wood Pulp The annual requirement of wood pulp is estimated at 3,000 tpa and this will be imported from Europe, North / South America, and Indonesia Waste Paper: Requirement of waste paper is estimated at 20,000 tpa .We shall procure waste paper from USA and Europe. Gas Efforts are on to secure 1500 mmbtu Natural Gas sanction. Ministry of Petroleum and Natural gas. referred the proposal to Bagyanagar Gas Authorities for further action.

  8. Product Mix • Product Profile The paper machine will have an installed capacity of 15,000 TPA of Tissue paper. • Soft tissue 20 Tons per day • Soft Tissue for Conversion 5 Tons per day • Hard Tissue 25 tons per day Company has the flexibility to change product-mix to cater to the changing market demand/ requirements from time-to-time to maintain and improve profitability.

  9. Marketing Arrangements • Export – 70% Tissue Paper in Jumbo Reels and Sheets to Identified Prospective converters in Middle East & Africa • Domestic – 30% Tissue reels/sheets/converted tissue packs through established distributors / convertors

  10. Market Scenario Global tissue paper business is $30 billion, and volume is over 20 million t. North America and Europe account for over 60% of consumption. World average per capita consumption of tissue paper is 3.4 kg. India’s per capita tissue paper consumption is dismally low at 0.01 kg as compared to China at 4.5 kg and 23 kg in North America. The Indian tissue paper market is at an inflexion point and is expected to grow at a CAGR of 20% in the next 3 – 5 years, with the organized segment growing even faster. This growth will be driven by increasing hygiene awareness, disposable income and deeper penetration of organized retail. World tissue paper demand is forecast to grow by 3.2%/yr up to 2010. The annual increase is about 780,000 tonnes, and the market is expected to reach 28.3 million tonnes by 2010. The growth corresponds to the combined capacity of 26 medium-size (30,000 t/yr) or 13 large (60,000 t/yr) tissue machines per year. Growth prospects are best in China and other Asia, where economic growth, rising standards of living, rapid growth of travel, hotel businesses and fast food chains all contribute to the demand growth. The eastern European market is also likely to grow clearly above average during the next 10 years.

  11. Product Usage • Product Usage Tissue paper is a thin, strong, translucent paper used in sanitary products, such as toilet tissue, paper towels, facial tissue, kitchen towels and napkins At-home" Tissue market accounts for about 63% of the entire tissue market and away-from-home" market, represents the remaining 37%. Tissue Paper targeted customers are wholesale to janitorial supply companies, hotels, offices, restaurants, schools, and the government. A small quantity of tissue is used in absorbent products (such as diapers, wipes, and feminine hygiene products) and is also used for wadding and as a base stock for waxing and wrapping. . Tissue paper consumption patterns vary between regions. Toilet paper is the main product in all regions except Middle East, where facial tissue dominates for religious and cultural reasons. Tissue paper is a consumer product, and branding is a vital part of its marketing. In addition to manufacturers' brands, the leading retailers have introduced their own private-label brands. In Western Europe, about half of all consumer tissue is sold under private labels. In some countries like Germany and Switzerland, the share of private labels is already well over 60%. In North America and many other regions, the share of private labels is much smaller, though gradually increasing. The consolidation and globalization of retail chains support this development

  12. The total project cost is estimated at Rs 55 Crore. The total cost has been arrived based on the initial estimates by company’s Technical consultant and indicative quotations received by the company. A summary of the Cost of project is furnished in the table below:

  13. Means of Finance The project is proposed to be funded at a Debt/ Equity ratio of 1: and the financing pattern for the project is proposed as under:

  14. Project Profitability DSCR Average 2.31 IRR 21%

  15. Current Status

  16. Project Implementation schedule

  17. Justification • Tissue is a Specialty Paper and generates higher revenues • Usage of Tissue Paper is growing at a rapid speed all over the World • Per Capita consumption of Tissue paper in China, India, Africa and Rest of Asia is below 2 Kg as against per capita consumption of 22 kg in North America and 13 kg in Europe and Japan. This indicates significant growth potential for Tissue Paper in Asia, Africa and China • New volumes to depend on imported fiber due to shortage of wood supplies in India and thus making premier grades of Specialty varieties such as Tissue paper generates higher revenues and project is more viable.

  18. Thank You

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