Rising Imports Pose Threat To Paper Mills In India

Rising Imports Pose Threat To Paper Mills In India

Paper imports during the first nine months of the current financial year rose 40% to 1.47 million tonnes or almost 15% of the total consumption in the country, posing a threat to the domestic industry, according to industry sources.

Domestic manufacturers faced issues such as high energy cost and inadequate raw material availability, said Saurabh Bangur, president, IPMA, in a statement. Overseas manufacturers, however, had easy access to captive plantations and lower energy costs. They also enjoyed nil import tariffs in India, thus giving the foreign firms a competitive edge.

‘No major investment’

Though India is one of the fastest growing markets for paper with almost 7% growth a year, no major greenfield investment for capacity addition had taken place in the last two years, Rohit Pandit, secretary general, IPMA, told The Hindu.

“The consolidated production of large paper mills is stagnant, with a drop in capacity utilisation from 92% in 2015-16 to 83% in 2016-17,” said Mr. Pandit.

Raw material cost accounts for about 40% to 50% of the total cost of production.

The mill delivered cost of domestic wood in India was higher by almost $30-$40 per tonne compared with other Asian countries. This had pushed up the cost of paper production in India by $100 for a tonne of paper, Mr. Pandit said. Read More

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