TNPL hopes to export 30,000 tons this fiscal which would contribute Rs.80 crore export revenue.

Meanwhile, the increasing coal and ocean freight costs have put TNPL''s bottomline under pressure. TNPL is India''s lowest cost manufacturer of paper. The higher demand for coal by the Chinese is said to be behind the price increase.

TNPL imports around 40,000 ton of coal per month to fire the boilers installed at the sugar mills. The company entered into unique bagasse-steam exchange contracts with various sugar mills in Tamil Nadu. TNPL, in exchange for bagasse, would meet the cost of boilers and coal at those sugar mills.

As a matter of fact, the company''s plant at Pugallur is the world''s largest bagasse based paper plant.

Also the world''s largest bagasse based paper manufacturer, TNPL recently expanded its capacity by 50,000 tonne to 2.3 lakh tonne per annum (tpa) requiring more bagasse which in turn necessitates increased usage of coal to generate steam at sugar mills.

According to officials, the company is taking suitable measures to optimise the available coal usage and reduce the adverse impact. TNPL like any other paper exporter has also been affected by the 4 per cent reduction in the duty entitled passbook (DEPB) scheme and the strengthening of the rupee.

Meanwhile, production at TNPL''s overhauled paper machine I and II has stabilised. The company will close this year with production of 1.9 lakh tonnes, which by next fiscal is expected to touch 2.2 lakh tonnes.

Not long ago a major newsprint manufacturer in India, TNPL''s production today mainly consists of printing and writing paper (PWP). Only 8 per cent of the total production is newsprint, due to the lack of demand for domestic newsprint.

The realisation in the case of PWP is around Rs.28,500/tonne as against Rs.22,500/tonne from selling newsprint.

The company has trained its focus on value added PWP mix like branded copier, map litho and lower grammage papers where competition is lower. TNPL has reintroduced 50 grams-per square- metre paper as this low-weight variety has good demand without India and in the export markets.

TNPL is yet to finalise on adding one lakh tonne capacity at the same location at an estimated cost of Rs.750 crore. According to officials, the company is studying the report submitted by the Canadian consultancy firm AMEC. TNPL does not find any problem in sourcing bagasse.