The letter says, for a print or packaging firm "to survive, it seeks an immediate revision in existing selling price."
As per the letter, the BMPA and MMS have studied the cost structures; and recommends that the increase should be as below:
1. Products made of Recycled boards and Kraft – 15%
2. Products made of FBB/SBS/VAP boards – 10%
3. Products made of Maplitho and other papers – 15%
The twin print associations of Mumbai represent more than 800 print and packaging businesses from across the city of Greater Mumbai, Navi Mumbai and surrounding areas. As per the letter which has been shared with PrintWeek India, both BMPA and MMS are "joined by associations from South, East, North who together comprise the New Delhi-based All India Federation of Master Printers (AIFMP) which together represents the entire country’s Indian print and packaging industry."
An industry veteran while speaking to PrintWeek India said, "While there is a buoyant mood in the industry after PrintPack and the UP election results in favour of the ruling party, at the moment, there is an increasingly insistent murmur that prices may impact the bottomline of innumerable print and packaging firms. Print and packaging firms have struggled for years to pass on any price increases. One reason is, price hikes never work as someone is always prepared to supply cheaper. It’s not the same as the paper mills who manage to impose increases. But (from a growth perspective) India needs a rise in price; the market hasn’t recovered from the last round of currency fluctuations, plus the impact of raw material price rises and demonetisation.
One week ago, in a statement issued by Indian Corrugated Case Manufacturers Association (ICCMA), the president Kirit Modi said, “The corrugated box industry in the country with 300 automatic units and more than 12,000 semi-automatic units is facing imminent closure on account of rising kraft paper prices and supply disruptions.”
Facts about paper prices: BMPA and MMS document
• Recycled duplex and FBB/SBS board rates have increased by Rs 3.25 to 3.50/kg. This constitutes an increase of over 10%.
• Maplitho and other grades of paper has seen unprecedented price increase in the last one year. At an average the prices have increased by nearly 25%. The price of Maplitho has gone up from Rs 58/- a year ago to Rs 70/- which is the price as on date.
• Kraft prices have increased by Rs 7.25 to 7.50/kg and the indications are that there would be a further increase of Rs 3/kg within a month. This constitutes an increase of over 30%.
• International prices of pulp and finished paper have shot up over the last few weeks. The price of Virgin Wood Pulp has risen by USD 125 PMT (approx 11/- per kg landed), which has led to higher demand of waste paper. This has a direct impact on prices in India, as majority of pulp and waste for recycled board is still imported.
• The volatile petroleum prices have ensured an increase in film, glue, ink and press chemical prices ranging from 6-13% over the last few months.
• BOPP/PET Film rates and adhesive rates have also increased over the last 1 year or so. This constitutes an increase of over 7.5%.
• Packing material costs have gone up by over 30%, due to a sharp increase in kraft paper prices.
• Overhead costs have also sharply shot up post demonetisation where salaries and wages have increased. The increase in labour costs has been more than 20% considering the insistence of the Government to bring the entire labour force of the factories into the banking system, and consequent costs of compliance.