Paper sector of India: few points

Sep 1, 2017

I was reading articles and thought to share few points from that.

I read that paper companies are facing import problem from many years. Govt want to make in India but do very little for the industry. Sometimes they do and reduce taxes but not much beyond that.

Our industrialists seems to be not ready or uncompetitive in global market. Free trade agreements are not helping India. India could not increase its export that much but import has improved faster after many free trade agreements.

Paper companies are similar sector where Indian govt policies are harming it. See how progressive is the import, which is bad for our local paper manufacturers.

Industry want anti-dumping duty on Import.

This is happening due to pulp/fiber is not available as much as the requirement in India. Wood is costlier in India and that make competition tough for Indian. Paper Industry want to raise pulp tree at sparse space in India in collaboration with Govt.

You know interest rate on loan is too high in India, which every industry faces. but makes our industries uncompetitive.


GST on import will provide some relief to local paper manufacturers.
Import from South Korea will be at 0% import from Jan, 2018. Don't know, if new GST won't affect or affect it.
Under the India-Korea CEPA, the basic customs duty has been progressively reduced and will be 0% with effect from January 2018. Imports of paper and paperboard into India from ASEAN in the last six years have grown at a CAGR of over 42 per cent. Imports from South Korea have grown at a CAGR of 60 per cent.
Unorganized players are facing environmental compliance issue and will face tougher challenge post GST.



Also, due to old technologies, energy cost is higher for unorganized sector.


India is a fiber-deficit country. With raw materials accounting for around 50 per cent of the cost of production, availability of fibre is the biggest constraint faced by Indian paper industry. Power and Fuel constitute about 16% of sales.

More

Printing and writing paper accounts for nearly one-third of the total estimated demand of about 15 million tonnes.

Worldwide paper industry is facing muted demand but in India, growth is there and will stay for 5 years atleast.


Paper mills’ performance: As TNPL, Ballarpur slip, peers improve Q1 profits: West Coast Paper, of which Bangur is the Vice-Chairman, tripled its net profit in the first quarter and is targeting the mass market segment in copier paper.

The growth will be largely driven by printing and writing and packaging and paper board segment. Newsprint paper can face more problem due to import. Imported part is also more in newsprint paper.


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