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Kanpur Plastipack Closes Down CPP Facility, Sells Divison to SRF as a Strategic Rebalance Towards Core Business

Updated: May 07, 2025 19:26

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Kanpur Plastipack Ltd. has formally shut down its Cast Polypropylene (CPP) facility with effect from May 7, 2025, its significant strategic exit from the business of flexible film packing. This follows the announcement by the company that it has agreed to sell its entire CPP business to SRF Ltd. for ₹49.25 crore as part of efforts to streamline its focus on core Raffia business and improve its financial position.
 
Key Highlights:
  • CPP Unit Closure: The CPP division, that was started in 2023, faced recurring losses thanks to overcapacity in the world, poor demand from the FMCG and consumer industries, and non-economic pricing, rendering the business unsustainable.
  • Asset Sale to SRF: On March 11, 2025, Kanpur Plastipack entered into an asset purchase agreement with SRF Ltd. where the CPP division plant and machinery was sold by them on an 'as is where is' basis for ₹49.25 crore. The assets will be shifted by SRF to its facility in Indore to grow its own flexible packaging portfolio.
  • Financial Impact: All the proceeds from the sale will go towards repaying term loans due, substantially lowering the company's debt burden and interest expenses. The action should bring the CPP unit's losses to an end and prevent them from siphoning profits off the core Raffia division.
  • Focus on Core Business: Management will now focus on growing the profitable FIBC, PP fabric, and small PP sacks business. The Raffia division has been witnessing a healthy trend of profitability, and steps are being planned to grow its capacity further.
  • Positive Outlook: With the closure and sale, Kanpur Plastipack expects a better balance sheet, increased liquidity, and sharp focus on its core competencies, making the company ready for a brighter, more sustainable future.
Source: VCCircle, Fibre2Fashion, Indian Chemical News, Moneycontrol

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