ITC acquires Century Pulp and Paper for INR 3,498-crore

ITC has signed a business transfer agreement to acquire Century Pulp and Paper (CPP) from Aditya Birla Real Estate (ABREL) for INR 3,498-crore. The acquisition will enhance ITC’s Paperboards and Specialty Papers Division (ITC PSPD), allowing it to scale up operations and expand its footprint in the growing Indian paper industry.

CPP, located in Lafkuan, Uttarakhand, has been a significant player in the paper industry since its establishment in 1984. With an annual production capacity of 4.8-lakh tonnes, the business is known for its operational excellence and commitment to sustainability. This strategic acquisition is expected to strengthen ITC’s market position, particularly as India’s paper industry grows at a rate of 6-7% per year, driven by sectors such as FMCG, pharmaceuticals, and eCommerce.

B Sumant, executive director of ITC, said, “This acquisition will strengthen ITC’s Paperboards and Specialty Papers Business and open new opportunities in domestic and international markets. With our existing facilities reaching full capacity, this acquisition aligns with our growth strategy by expanding operations at a new location.”

India’s paper demand is rising, with per capita consumption still significantly lower than the global average. At 16-kg per person annually, India lags behind the global average of 57-kg, offering a significant opportunity for growth. The acquisition of CPP allows ITC to capitalise on this market potential while improving its sustainability credentials. Over 50% of ITC’s energy needs are met from renewable sources, and its integrated business model helps achieve cost efficiencies.

The acquisition will allow ITC to drive several value-creation initiatives at CPP, such as capacity debottlenecking, product quality improvements, and efficiency upgrades through total productive maintenance (TPM) and digitalisation. Additionally, ITC aims to enhance supply chain optimisation and reduce overhead costs.

RK Dalmia, managing director of ABREL, said, “This strategic divestment unlocks value for our shareholders and sharpens our focus on real estate. CPP’s strong performance and sustainability make it a good fit for ITC, and we are pleased to hand over the business to a credible, established player.”

The transaction is subject to regulatory approvals, including from the Competition Commission of India. JM Financial acted as the exclusive financial advisor, while AZB & Partners provided legal counsel to ABREL during the deal.