INDIA – Rising raw material costs are pushing Indian paper and paper packaging companies into increasing their product prices, some by as much as 8%.
Indian paper and paper packaging giant JK Paper increased the prices of its products by up to 5% in August. This price increase affects three product categories, including copier paper and paperboard packaging. This is JK Paper’s second price hike for the year, the first of which was announced in May.
“It’s mainly due to the rise in basic costs,” explained JK Paper vice president Santosh Wakhloo. “Basically, the cost of raw materials and chemicals are going up.
“In the paperboard packaging sector, 50% of our raw material is imported and that has been substantially hit and we would shortly announce another hike in that category.”
Meanwhile, Ballarpur Industries increased its paper prices across all varieties between 5-8% from 1 September, according to managing director and chief executive Yogesh Aggarwal: “(This is) partly because of a spurt in wood prices from local sources. Also, import of pulp has become costlier because of a drastic depreciation in the rupee.
“Therefore, we will pass on this cost push to consumers,” said Aggarwal.
Not only have the prices of wood from domestic sources increased by 10-15%, its import cost has also increased in proportion to the rupee’s depreciation despite little movement in global pulp market prices.
About 40% of coated paper volumes in India are imported, with annual imports averaging at between 550,000 tonnes and 600,000 tonnes.
ICRA Limited, an Indian investment information and credit rating agency, estimates that the Indian paper industry - with a total consumption of 11.6 million metric tons - will grow at a rate of 6-8% in the medium to long term.
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