By: ICN Bureau
Last updated : May 12, 2025 10:24 am
The company had entered into an Assets Purchase Agreement on 11th March, 2025 to sell the plant and machineries of the CPP division
Kanpur Plastipack Limited is a leading manufacturer and exporter of Flexible Intermediate Bulk Container (FIBC)/ Bulk Bag/Jumbo Bag, PP Multifilament Yarn, PP Woven Sacks, CPP (Cast Polypropylene) films and a wide variety of Fabrics like Sulzer Fabric, Ventilated Fabric, Circular Fabric, etc. Located in Kanpur, India, and with over 50 years of experience in Industrial Packaging.
KPL has an excellent track record for providing high-quality products and customer satisfaction. The company had diversified into CPP film manufacturing in 2023 when it commissioned its CPP plant.
The company had entered into an Assets Purchase Agreement on 11th March, 2025 to sell the plant and machineries of the CPP division on 'as is where is' basis to SRF Limited. To give effect to the sale of plant and machines of CPP division, the CPP (Cast Polypropylene Film) division of the company henceforth closed with effect from 7th May, 2025 after due settlement of the terms.
Going forward the sale of these machineries will be a cash positive activity as the entire proceeds from the sale is being used to repay the outstanding term loan on these assets thereby considerably reducing the debt burden. The losses of CPP will no longer drain the profitable Raffia division of the company. Savings on account of interest outflow will further enhance the bottom line of the company.
The decision to exit the CPP business was driven by continued financial underperformance, challenging market conditions, and the strategic focus on strengthening our core business segments-namely FIBCs, PP Fabrics, and woven sacks.
The company remains committed to our long-term growth strategy and are confident that this move will contribute significantly to enhancing shareholder value and business sustainability.
Significantly, the infusion of funds by the promoters in the form of preferential issue of warrants to the tune of Rs 20 crores, recently completed, will also help in increasing the liquidity of the company. The Raffia division itself has shown a healthy profit trend in the last two quarters which is expected to continue.
With both these exercises the debt structure of the company stands reduced and the Balance Sheet of the company will significantly strengthen. It is estimated that the reduction in interest cost itself shall be about Rs. 10 crore per annum. The management is confident of a bright future ahead. Plans are underway to strengthen the core Raffia business and improve its performance through value added products.