Rising paper prices challenge printer’s profitability

The Offset Printers’ Association, Ludhiana (OPA) informed PrintWeek India that the association has received a communication from Niraj Sinha, vice president, Ballarpur Industries, announcing the decision. 

In the letter Sinha states that paper mills are being impacted severely by the domestic fiber deficit scenario and its impact on wood prices. Wood is being transported across the length and breadth of the country and is defying the generally accepted practice of procurement from the catchment area. Also, for the first time in the history of Indian paper industry, import of wood has become a reality.  As per Sinha, this cost push has further been compounded by increase in prices of specialty chemicals, energy, transport and logistics, making it increasingly difficult for them to operate profitably.

For Copiers, Poster Paper, Sunlit Cartridge, Ledger and BCB, an increase of Rs.1500 PMT is expected. These increases will be effective from 1 December, 2013.

Commenting on the issue Parveen Aggarwal of OPA said, “Paper mills already increased the prices by 12% in the month of September due to higher Dollar price, and now with this increase of about 15% in the current prices, the paper products, like note books, corrugated and duplex boxes, labels and other stationery items are bound to increase. If the current trend of increase in paper prices keeps on moving like this it’ll be very difficult to survive for the printing and packaging industry.”

On the other hand, the increase will also mean the burden of price correction will be shifted to the end consumer. Prices of school books, packaging, office stationery, sweet boxes and notebooks etc., will too see a surge from January 2014. “It will be a severe blow to the total industry as each industrial unit will have to now pay more for every printed product they are using. This in turn will increase the overall pricing and is going to very seriously affect the end user,” Aggarwal added.

Kushal Jain of OPA advised all the printers to keep the track of the paper prices, as the fluctuating paper pricing can hamper the profitability of the printing units too. He appealed printers to a 15% increase the prices to absorb the rise cost of inputs.

Adding to Jain’s statement, Kamal Chopra, said, “It is to be noted that this is almost third revision in prices this year since January. Recently, paper mills had increased price effective 1 September, 2013 by Rs 3000/- PMT due to Dollar- Rupee volatility. Government agencies must control prices of paper otherwise it’ll increase the inflation to newer highs. School and college books will also cost more for the coming sessions.”