Orient Paper Approves ₹213 Crore Project for New Tissue Machine, Scraps ₹475 Crore Plan

Project Update and Board Approval

Orient Paper & Industries Limited's Board of Directors, in a meeting on March 27, 2026, approved changes to its capital expenditure at the Amlai facility. The company will install a new tissue machine with advanced technology, replacing earlier modernization plans.

This new project will require an investment of approximately ₹213 crore, an increase from the previously planned ₹125 crore.

The company has also decided to cancel its previously approved ₹475 crore modernization project.

The planned addition of 23,400 tonnes per annum (TPA) capacity will build upon the facility's existing 100,000 TPA capacity.

Strategic Shift for Tissue Segment

This move signals a focused strategy on advanced technology for the tissue paper segment, rather than a broad modernization effort.

The company expects this upgrade to improve operational efficiency, enhance product quality, and strengthen its cost competitiveness in the fast-changing tissue paper market.

This decision reflects Orient Paper's adaptation to market demands and its commitment to updating manufacturing for future expansion.

Background: Past Plans and Industry Context

Orient Paper, part of the C K Birla Group, operates a key facility in Amlai, Madhya Pradesh.

Previously, in August 2025, Orient Paper had announced a ₹125 crore investment for its Amlai plant to add 8,500 TPA capacity over 24 months.

This new plan replaces a larger ₹475 crore modernization project approved in March 2023, which was also expected to take 24 months.

The Indian paper industry is projected to grow at a compound annual growth rate (CAGR) of about 9.8% from 2025 to 2031, largely due to demand from packaging and education sectors.

Key Changes and Project Details

The capital allocation for the Amlai facility has been revised to ₹213 crore for the new tissue machine technology.

The company's focus has shifted from general modernization to a targeted technological upgrade in its tissue segment.

The tissue paper segment capacity is expected to increase by 23,400 TPA.

Advanced technology is anticipated to enhance operational efficiency and product quality.

Potential Risks and Financials

The project's estimated cost has risen to ₹213 crore from ₹125 crore, increasing the initial capital commitment.

With full capacity not expected until FY2029-30, the timeline is extended, which could delay returns on investment.

Orient Paper reported a widening net loss in Q4 FY24, suggesting ongoing operational issues.

The company also faces significant contingent liabilities of ₹3,487 crore as of March 2023, alongside historically low return metrics, which are important financial considerations.

Competitive Landscape

Orient Paper operates in a competitive market alongside major players like ITC Limited, JK Paper Ltd., West Coast Paper Mills Ltd., and Century Pulp and Paper. In the tissue paper sector, its competitors include Century Papers and Pudumjee.

Project Timelines and Capacity

The revised investment is ₹213 crore, with implementation expected to conclude by FY2027-28.

The previously canceled modernization project had an outlay of ₹475 crore.

The new project aims to add 23,400 TPA capacity to the existing 100,000 TPA.

Full operational capacity is anticipated by FY2029-30.

Looking Ahead: Key Factors to Monitor

Investors will be watching the progress of the new tissue machine installation and commissioning.

Tracking actual project spending against the ₹213 crore budget will be important.

The company's ability to achieve full operational capacity by FY2029-30 will also be a key indicator.

Assessing how the new technology impacts operational efficiency and product quality will be crucial.

Further updates on financial performance and cash flow after the capital expenditure will be closely monitored.