Sirpur Paper Mills has acquired the German paper plant of Hoffmann & Engelmann in a 3.3-million euros (approximately Rs 18 crore) deal. The acquisition is part of the capacity expansion plan of Sirpur Paper. Due to financial problems, the German company had initiated insolvency proceedings last year and closed down a few months back, and its assets were up for sale.
Domestic paper manufacturers have been increasing capacities with their production units closing on to full capacity utilisation levels, robust demand and paper commodity cycle on an uptick.

While Sirpur has acquired the main paper making unit, a Spanish company is learnt to have acquired the coated paper manufacturing unit of Hoffmann. The Hoffmann acquisition brings an additional capacity of 50,000 tonnes per annum for Sirpur, which would be part of the Rs 300-crore expansion programme that the mid sized paper company had initiated early this year.

The acquisition takes the overall paper capacity of Sirpur from 80,000 tonnes per annum currently to 1.3 lakh tonnes. The production unit of Hoffmann, which is located near Mannheim, is being dismantled and brought back to Sirpur's existing manufacturing set-up at Adilabad district in Andhra Pradesh.

Devashish Poddar, COO of Sirpur Paper, said, "The plant will be operational
by early 2007. We have already tied up funds for the expansion, and the programme is on schedule." Sirpur is also investing in setting up supporting infrastructure for the plant.