2010VP04 Sree Sakthi Paper Mills

Sree Sakthi Paper Mills Limited (Rs. 24.65) in diversification path
BSE: 532701 ISIN: INE266H01014
The company is engaged in the manufacturing of Kraft Paper and Duplex Board catering to both local and export markets.
It was incorporated in 1991 with an installed capacity to produce 15 tonnes of kraft paper per day. It slowly graduated
to manufacture of 70 TPD each of both kraft paper and Duplex Board at two of its plants in Cochin, in the State of
Kerala.
SSPML is one of the largest manufacturing outfit in South India. SSPML’s two manufacturing units namely Kraft
Paper Units situated at Development Area, Edayar, and Duplex Board Unit situated at Kanjirapilly, Chalakkudy. Both
the plants are well equipped with latest technology of Paper making and fully supported by infrastructures and other
utilities.
SSPML has expand its activities at Edayar by enhancing its capacity to 240 MT per day to meet
growing demand from its customers and to emerge as one of the bigger players in South India by March 2008
The total capacity as on 31/3/2009 is as follows 100,000 MT/p.a. which consists of kraft paper 75,000 MT/p.a Duplex Board 25,000 MT/p.a also has an asset of 2 MW co generation for power at a cost of Rs 7 crore .
Results

The Net Fixed asset and Turnover as on 31/3/2005 Rs 18.11 crore Rs 50.55 crore respectively has increased to Rs. 47.73 crore and Rs. 138.68 crore as on 31/3/2009
An Compound annual growth rate of 40.8% in Fixed assets and 47.6% for Sales, Share capital and book value
The current capital base of the company is Rs 16.44 crore (1.644 crore share of Rs 10 each ) Out of which promotors hold close to 52.41 % that is 0.86crore shares and rest 0.78 crore held by public held by public (which includes held by Corporation Bank 2.8 lakh shares)

The book value as on 31/3/2009 is around Rs 21.50 and balance sheet is around 68 crore.
Debt equity ratio is only 0.6

At Current market price of Rs 24.65 the share trades at 9.45 x the eps (2009-10 )
of 2.2 for 2008-09 and 6 x the expected EPS 2.6 for 2009-10
The company is expected rake funds from market shortly by way of right issue / QIB placement .

To meet requirments for
1) Paper Expansion Project to Scale capacity to 1lakh ton
2) To fund Hydro Electric Power project of 11.25 MW
Government of Kerala has allotted 3 small hydro power projects to the company for implementation.
Palchuram Project :5.25 mw
Alamparathode Project :3.00 mw
Mukkuttathode Project:3.00 mw
Total:11.25 mw

All Projects are located at North Kerala
Hydrology Reveals Steady Rainfall
Minimal Forest Area Involved
Eligible for Subsidy and Carbon Credit
The projects have been allotted on BOOT basis for a period of 30 years

As per the Government order, the Company hasto implement the projects through separate Special Purpose Companies. Accordingly three new companies have been incorporated.
Sree Kailas Palchuram Hydro Power Ltd
Sree Adisakthi Mukkuttathode Hydro Power Ltd
Jalashaayi Alamparathode Hydro Power Ltd

Government of Kerala has conveyed the approval to the new implementation companies for the execution of the
project and also allowing signing up the implementation agreement by the said new
companies.
In this connection Technical Evaluation and Feasibility Reports (TEFR) for the two projects have been approved by the Government and for third project, the Technical Evaluation and Feasibility Reports (TEFR) is under preparation.
3) To Meet the Capital requirments /contribution towards Group project of logistic park
Sree Kailas Group –launching logistic park in Chennai in technical collaboration with BPS Global,Singapore.
The group is planning for a 300 crores project specializing in Logistics Park, Villas and Comfort Homes.
Sree Kailas Logistics Park is to be built on a site of around 35 acres and situated at a prime location on the National Highway 45 nestled between, to the one side, the vastly growing automotives sector and, to the other side, access to the quickly developing consumer area, close to the major Chennai port.
The logistic park proposed at Chennai is spread over 35 acres(1524600 Sqr feet),which will be benefit the trading community, corporate, etc. The proposed facility is constructed on world-class pre-engineered structure, which has insulation on roof and walls to reduce heat. The facility has floor loadings, numerous numbers of loading bay doors and sufficient space for auction yard besides protection from rodents.
The Logistics Park is proposed at Urgadom, Chennai , which is strategically the best location for logistics , where we can serve both industry as well as FMCG. The project is very near to industries viz, Nokia, Hyundai, Saint Gopan Glass, Flextronics, Dell, Delfi and very near to Renolt Nissan, KOmatsdu, Avera, Tristler Ltd, Ashok Leyland , Ford Ltd, etc.


The promotor are try to increase their stake to 76% from present 52.4% to enable them to raise capital in near future retaining the major shares

Conclusion with caution
Please evaluate independantly before investing

Kailas group having business interest in paper, transportation, real estate the only listed company is sree sakthi paper mills (SSPML).
The company (SSPML) s having fund requirement for Expanding Paper Mfg capacity and for diversification into Hydro power project. The group is having fund requirement for setting up logistic park