Print industry fears price hikes will cause major crisis

Industry leaders have warned that the lack of availability of key raw materials as well as significant price increases could end up as the biggest crisis of 2021.

12 Mar 2021 | By Charmiane Alexander

Haymarketsac's print head Prasad Gangurde, who oversees production of the group's magazine titles, said, "We purchased 170 gsm art paper at Rs 95/kg in Hyderabad. A similar story is unfolding with maplitho.”

Aurangabad-based Kapil Bhargava heads a print and packaging firm. The company has a 28x40-inch five-colour machine. They produce corrugation e-and f-narrow flute.

Bhargava said, "The situation will get worse. The credit period from the dealer has reduced drastically. Every second day, the rates are rising. The paper mills have orders in their hands."

According to Bhargava, print firms that have orders from the FMCG majors, two-wheelers and four-wheelers, or packaging and export orders will survive. For the rest, "it is going to be very tough."

Kalnirnay's Jayraj Salgaokar in Mumbai said, "Books and notebooks (we are included) will suffer paying higher prices. Right now, prices of white paper are rising with the temperature. In the monsoon it will be a washout."

Dot Printer's Tushar Dhote in Mumbai said, "Paper mills are citing various reasons such as fewer imports due to restrictions on China. Also, the European mills are producing less; availability of containers as well as logistics and power costs are impacting the final pricing."

"They are hedging the losses incurred during the initial period of the lockdown in 2020," Dhote said. "Commercial printing has been hit very badly. I don't think it will recover very soon."

Bhargava said, "We are selling scrap waste at Rs 20/kg. This has never happened before. Every second day the prices of duplex and kraft are increasing without any intimations."

Salgaokar said, "The top cargo shippers in the world have stopped carrying waste paper used for pulping. This makes the cargo prices higher and the availability dearer." Also, the global shortage of shipping containers has led to a sharp rise in transport costs.

Salgaokar added, "China, as a policy matter, has completely stopped deforestation. This has resulted in the rise of imports of pulp and paper." He felt the government should consider reducing exports of pulp and paper.

Bhargava concurred with Salgaokar. He said the paper mills have joined hands. "Unless exports are stopped, this situation will continue unabated."

Given that paper comprises the majority of the overall cost of publishing print magazines, this trend will have a major impact on our operations," said Gangurde.

Dhote said, "There were problems of downslide much before the Covid-19 pandemic, but the escalation has taken place after one year of business lull. I do not think 2021 will see profits for most of the commercial printers."

On 15 March, the BMPA, the MMP, the MMS and the PPOA will be hosting a press conference at the Press Club in Mumbai. The main theme of the press conference is to highlight "the indiscriminate price of paper and raw materials." In a tersely drafted note, the associations stated, "There is a cartel among the paper traders who are trying to make up the losses." The four prominent associations are seeking "a ban on exports of paper by the paper mills."

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