Indian Recycle Paper Industry Needs a Breather, Otherwise Prices of Finished Paper May Skyrocket
20 May 2020
Indian Paper Recycling Industry is largely dependent on imported waste paper from various countries. The price of waste paper mainly determines the price of finished paper. In 2019 alone, there was a 30% downward trend in imported waste paper prices, and Indian Kraft Paper Mills had to reduce prices of finished paper by around 30% even after having export orders in hand. This implies that they had an excess supply even after fulfilling domestic demand, said Sunil Agarwal, President of GPMA (Gujarat Paper Mills Association). Beginning of 2020 saw an upward trend in waste paper prices globally, which forced Indian Paper Mills to hike prices by around 20% pre lock-down, which was yet to be absorbed by the packaging industry.
Then came lock-down due to COVID-19 pandemonium. During this lock-down, loads of containers full of waste paper were detained at various ports due to shutting of courier services, transportation, offices of shipping lines and restriction of movement of manpower, resulting in heavy detention charges, demurrages, ground rent, interest, late filing fees etc.
Then lock-down 2 gave permission to few paper mills to operate for essential packaging demand of paper, which were catered somehow by the mills taking stock of the inventories being diluted, but this would not have held for too long. Then came lock-down 3, making it more difficult for the Industry, salary to workers, fixed and various other expenses had become a big pain to survive with the increase in various additional costs due to the extended time frame. Post lock-down, after re-opening, paper industry fears that there will be a huge hike in price of finished paper as waste paper availability has also gone down drastically as many countries are incinerating waste paper out of fear of the spread of virus, and many sending the waste paper to landfill.
Mr. Agarwal further emphasized that the prices of Kraft paper will skyrocket in coming times due to waste paper availability issues domestically and abroad coupled with additional cost burden due to above mentioned factors.
It is estimated that around Rs. 1000 crores will be going down in vain only to shipping lines by way of detention charges etc., a burden, which the paper industry cannot absorb, and it will die, resulting in the closure of paper mills. The employment/manpower involved, directly and indirectly, in this paper industry is to the tune of around 100 lacs and many would be jobless post lock-down."
Therefore, for the survival of Paper Industry, Gujarat Paper Mills Association (GPMA) earnestly requests the Government of India, the following:
It is very much feared that unless a proper relief package is given by the Government, the Paper Industry will be doomed.
Lalit Garg, Hon. Secretary - GPMA