Raju Suneja: We do not see a major change in the near-term future

By 23 Jun 2018

As per a representation by a printer body, there’s a 25% hike in the cost of input materials. Since January 2018, the cost of US dollar has risen to Rs 68.

In conversation with Raju Suneja, director, Sona Papers, we find out what print desires under the rising dollar

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You represent a business which is dependent on crude oil volatility and the currency price fluctuation. Will the dynamics be altered in the short-term? 
Forex rates are a function of various macro-economic factors – both domestic and international. We do not see a major change in the near-term future.

Will this raw material inflation temper your company’s outlook for the year? What is the percentage you are looking at?
No enterprise that is dependent on imports will be able to absorb the vagaries of base price increase. In the short term a marginal absorption may be possible; but not definitely in the long run.

Will this 25% industry-wide raw material inflation temper your company’s outlook for this year? What is the percentage you are looking at?
Where raw material input constitutes 45% – 70% of the product cost; a 25% increase in input cost would increase the cost of the end-product by an estimated average of 12% – 18%, which in today’s scenario would be a very high percentage point to pass on to the end-consumer. Well, a certain percentage would need to be passed on. This will definitely have a direct effect on the topline and the bottomline. Our estimate in value terms would be a southside movement of 20%.

From an export point of view, a strong dollar will boost turnover. Your comments?
A stronger dollar would definitely have a greater impact on exports earnings presuming other cost parameters would remain the same or reduce. That is not the case. Unit dollar value of export would increase, reducing offtake, increasing Opex, and shrinking margins.

When the top-level delegation met the GoI representatives, they were asked what is the revenue the print and packaging industry contributes to the Exchequer? Can you hazard a guess?
It would range from 0.1% - 0.5% of the GDP.


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