The massive machinery that had been gathering dust for the past three years has started running again. The workers are busy removing the overgrowth and painting the buildings. And hope glitters in the employees’ eyes. 

The gloom that prevailed in Velloor township is retreating and the residents expect the good old days, of the area buzzing with activity, to return. While the disinvestment of Hindustan Newsprint Ltd (HNL) — a leading central public sector unit (PSU) — devastated the lives of Velloor residents, the state government’s intervention to revive the factory as a state entity is being seen as a new dawn.

When Chief Minister Pinarayi Vijayan switches on the paper-making units of the Kerala Paper Products Ltd (KPPL) at Velloor on Thursday, Kerala will be scripting a new chapter in the history of public sector enterprises. 

“Reviving the unit has been tough as it was idle for over three years. We refurbished the machinery one by one and have started the trial run. The production will officially start on Thursday and we are looking forward to starting commercial operations in August,” said KPPL special officer Prasad Balakrishnan Nair. 

Initially, the unit will produce newsprint from recycled wastepaper pulp. The company is procuring pulp from Tamil Nadu Paper Products and is planning to collect waste paper through Kudumbashree units. In the second phase, the chemical mechanical plant will be revived, for which eucalyptus wood and bamboo reeds will be sourced from the erstwhile plantations of HNL. The industries minister has held two rounds of talks with the forest department in this regard, Prasad said. The wood will be chipped and heated to turn it into pulp.

“We aren’t bothered about the market for newsprint as there is a scarcity in the domestic market and prices are high in the international market. We have appointed 250 ex-employees on contract and some retired workers have offered to provide technical knowledge. Our aim is to provide quality paper at an affordable price,” Prasad said.

While the government hails it as a major step in the state’s industrial development, investment experts are sceptical. “It is not the government’s business to run a commercial enterprise. We should keep ideology and politics aside and work to make it viable. We have the experience of KSRTC and other PSUs that have become a liability to the state. The government shouldn’t see it as an enterprise to provide salary and pension to some people. The Centre decided to disinvest the unit as it couldn’t run it profitably and the state doesn’t have the expertise in the sector,” said Centre for Public Policy Research Chairman D Dhanuraj.

HNL becomes KPPL

HNL started commercial production in 1982

700-acre campus

Facilities

  • Power: 22 MW steam turbo power generator
  • 11 KV substation
  • Machinery: German Voith paper machine
  • Capacity: 750m paper with 7m width per minute
  • 1 lakh tonne paper per year
  • Power boiler for generating steam
  • Plant shut down on June 9, 2019

Govt’s investment

Rs 146 crore for takeover
Rs 154 crore for refurbishing and working capital
Phase 1 – Rs 34 crore
Phase 2 -Rs 45 crore
Working capital – Rs 74 crore

250 employees

  • Pulp-making plants
  • De-inking plant to recycle waste paper
  • Chemical mechanical plant for bamboo reeds
  • Chemical plant to pulp hardwood

CPPR Chairman Dr D Dhanuraj comments in a article published in the The Indian Express on 17 May 2022, Click here to read

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