Kolkata, July 24 - Tobacco-to-hotels major ITC Ltd is planning to set up a $1-billion greenfield paper plant and expand its hotel business, a top company official said here Friday.

'We are looking at an investment of Rs.4,000-5,000 crore for paper plant. The paper plant is likely to require 1,500-2,000 acres,' ITC chairman Y.C. Deveshwar said.

The company is scouting for land in three states - Gujarat, Madhya Pradesh and Andhra Pradesh - but has not been successful in bagging any plot yet.

Asked about the size of the paper plant, he said: 'It will be a half-a-million-tonne paper plant.'

According to Deveshwar, the paper industry, which currently grows by 5-6 percent every year, has a huge potential.

ITC's Paperboards and Specialty Papers Division (PSPD) is the largest in the country.

It caters to packaging, graphic, communication, writing, printing and specialty paper requirements.