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Indian paper makers to benefit as China bans waste paper import

26 February 2018

China has stopped imports of several grades of waste paper. This is due to a sustained campaign against foreign garbage, which has created shortage of raw material and impacted the production of paper.

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According to insiders in China, capacities close to three-lakh tonnes per annum are shut down due to lack of environmental compliance.

As a result, the price of recycled packaging board in China has increased. Indian manufacturers using waste paper stand to benefit on account of lower global waste paper prices (on excess supply) and higher realisation for recycled paper.

The Indian paper manufacturers like West Coast Paper, TNPL and NR Agarwal Industries which majorly import waste paper for manufacturing processed recycled paper are expected to improve margins on account of falling waste paper prices.

[[Read: Share prices of paper companies have surged to a new high last month]]

Indian market potential

Today, the per capita paper consumption in India is just about 13 kg, less than one-fourth of the global average of 57 kg.

AS Mehta, president, JK Paper stated, “As far as the paper industry and the growth outlook is concerned India is going to be the fastest growing paper market so the Indian paper industry will see a growth of something around 6% to 7%." He added, "As far as the operations are concerned India is one of the lowest cost producers today and our effort will remain on the better-operating efficiencies and parameters will improve upon the operations and improve upon the operating margin further."

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