The board of directors of Seshasayee Paper and Boards Ltd. (SPB) has approved a 20% increase in the production capacities of paper and pulp under the project Mill Development Plan IV, Phase I (MDP-IV-PI) at Erode costing ₹405 crore.

As per the plan, the expansion will lead to increase in paper production by 12,500 TPA, pulp production by 35,000 TPA and black liquor dry solids firing capacity from 950 TPD to 1,500 TPD.

The work on proposed expansion will commence by October and commercial production is slated to commence by April 2026.

SPB currently consumes costlier imported deinked pulp/imported pulp in its Tirunelveli unit. The surplus in-house pulp from Erode can be transferred to Tirunelveli unit to replace the costlier pulp, thereby improving the EBIDTA margins of the current operations, the company said in a regulatory filing.

On Friday, SPB board considered the detailed techno-economic feasibility report and thereafter submitted an application to secure environmental clearances for MDP-IV-PI. It is currently under review by the EAC and of MoEF&CC, said the company.

Meanwhile, SPB said that NCLT Chennai Bench approved the sale of Servalakshmi Paper Ltd. as a going concern in favour of SPB.

SPB has taken steps to restore electricity and water supply and also approved a capex of ₹100 crore towards speedy revival, refurbishment and expeditious recommencement of the operations of unit-III.