Kolkata, June 15 (PTI) Kesoram Industries Ltd is planning to infuse fresh capital of Rs 60 crore for the turnaround of Cygnet Industries Ltd, its wholly owned subsidiary, to transform it into a leading global supplier of cellulose transparent paper, a senior company official said on Thursday.
The Manjushree Khaitan-led company is the only one in south Asia that manufactures non-toxic, biodegradable cellulose transparent paper, also known as cellophane paper, used to wrap food and protect it.
There is growing demand for cellulose transparent paper in developed economies of the world as well as in the country. The strategic investment will allow Cygnet to improve its manufacturing capability, widen its product portfolio and achieve better quality standards, he said.
"We are in discussions to bring in strategic investors, including with our technical partner Futamura, who can add value. Given the rise in demand, there is a shortage in the global supply of transparent paper and India can be a major supplier," Kesoram Industries whole time director and CEO, P Radhakrishnan told PTI.
The company, he said, is not willing to dilute its majority stake and may restrict it below 26 per cent.
The B K Birla group company had signed a technical MoU with Futamura Group of Japan two years ago. The Japanese company may take a financial stake in Cygnet depending on valuation.
Radhakrishnan said that Cygnet is capable of generating an EBITDA of Rs 60 crore per annum after the proposed capital infusion and support from the new technical and financial partner. But the EBIDTA can increase to Rs 90- Rs100 crore with the support of the strategic partner.
Cygnet is also in the business of viscose rayon filament yarn and chemical manufacturing verticals and has around 2,500 employees. In FY23 it registered a turnover of Rs 260.62 crore and a loss of Rs 78.61 crore.