Indian Kraft Paper lured China's Corrugation Industry; Paper Mills may secure more orders if…

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Read the feedbacks of some Paper Mills during their business visit to China Sinocorrugated Fair 2019.

Indian Kraft Paper lured China's Corrugation Industry; Paper Mills may secure more orders if…

Delhi | 16 April 2019 | The Pulp and Paper Times: 

India's Kraft paper is becoming the first choice of China's Corrugators, converters and Traders. China's rising packaging paper demand is being partially met by Indian kraft paper manufacturers. The outcome of recently held 'Sino-Corrugated Exhibition' at Shanghai left Indian paper mills with plenty of orders for Kraft Paper. The three days event was loaded with Indian Paper Mills participation. Big Corrugators and traders from China and other countries took an immense interest in Indian quality and commitment to fulfil the orders on time. 

The Pulp and Paper Times checks the enthusiasm of paper mills owners over this scenario. Talking to us Mr. Hardik Patel, Director at Om Sree Papertek said “Our participation in Sino-Corrugated was completely fruitful to us. We managed to secure around 1000 tonnes paper orders which to be consigned in one or two months. Our Quality matched their standard.  I hope some of the paper mills will be having good orders in their export basket,”

The demand for paper and paperboard imports in China will continue to grow. The major driving forces include the lower average price of imports than domestic counterparts and the sluggish growth in domestic production of paper and paperboard resulting from the shortage of raw materials and the upward costs of labour, land, energy resources and other production factors. According to research, with the development of China's economy and the improvement of living standards, the per capita consumption of paper and paperboard shows an upward trend. Meanwhile, China's net annual population growth is between 8 million and 10 million, which leads to increasing demand for paper and paperboard in China and promotes the development of China's papermaking industry.

“It was home-like feeling at the exhibition, tremendous response directly from corporate companies and corrugators – was a never seen experience for us. They invited us to visit their corrugation lines and factory for creating better understanding while placing the orders. They looked very keen to indulge into long term sales agreement,” Mr. Shakti Bhargava, VP-Marketing of Astron Paper & Boards told.

“We experienced a good number of foot-fall at our stall during the exhibition, although our Paper mill will start in May 2019, Corrugators from China shown their keen interest in our paper quality and product-folio. We have received some valuable inquiries,” informed by Mr. Jalpesh Shah, Director at Bell Multi kraft Pvt. Ltd. 

Mr. Narendra Patel, Managing Director of Sezon Papers Pvt. Ltd. excitedly shares his experience with us. He said “We got much more response than expected from Chinese counterpart. It was our first visit to China for showcasing our paper products. We have secured good buying inquiries and they are at the negotiation stage. Few of Chinese buyers expressed their desire to visit our factory here in India, to vouch for our quality parameters and manufacturing,”

The Chinese government has set no administrative barriers against paper and paperboard import, e.g. making paper and paperboard exclusive to state-owned enterprises, or introducing import quota administration for paper and paperboard. But import tariffs vary greatly among China's paper and paperboard imports. For instance, the MFN rate and general rate on the commodity that has the heaviest tax burden is respectively 35% and 100%. The import tariffs on newsprint, kraft paper, etc. are lower with the lowest MFN rate being 2%.

“We have received very good orders from China but largely, we don't want to be dependent on China only, and we are seeking orders from other countries also. In the exhibition, we got the orders from Oman, Dubai, Egypt and Iran also. Recently we started our new Paper Machine-II of 200 TPD (light GSM) with the purpose of export,” Mr. Bhargava explained.

“The global paper market is slightly sounding low these days pampering European paper mills to sell their paper at less margin in to China. The margin pressure is becoming competitive for Indian paper mills. Although the price of paper of European suppliers is more or less equal to Indian supplier, this situation may continue for at least two more months,” Mr. Patel said.

Mr. Manish Patel, Managing Director at The South India Paper Mill has a different view over Chinese buying of paper "the Chinese market for lower grades of containerboard (also known as kraft paper in India) is extremely attractive in terms of pricing for Indian, Middle East and South East Asia paper manufacturers. Exports to China and other destinations in the Middle East, South Asia and Africa by Indian and other regional mills is not only sucking out the excess capacity in domestic markets but creating a shortage. This is driving up costs for all regional corrugated box manufacturers including those in India.

He explained how paper mills in South East Asia, India and the Middle East are trying to fill this deficit gap. He said, "The Chinese shortage of about 12-13 million MT/year) far outweighs excess international capacities. And so, how will large Chinese producers respond to source fibre for their mills in China? Will US recyclers be able to clean up their packaging waste? Will Indian paper mills shift their attention (and profit margins) to China instead of the local market?

Quality Standards:

“We have a production facility at Morbi manufacturing 150 TPD of Paper. There is much demand for Kraft liner, Test liner and Fluting Media in China and they follow strict parameters before buying the paper. They carry out various tests on our sample paper like it should be free from any kind of smell. Sometimes they demand to blend the US waste paper in the raw material,” Mr. Narendra Patel said.

“Quality is the First and Foremost thing for them, the runnability of a paper should be good and smooth, secondly Paper must be free from smell, you must have effluent Treatment Plant in your mill in order to avoid the rejection. They also prefer to jointless paper, the reel of paper doesn't have any joints, in case, they only allowed one joint in a reel. Chinese buyers require High RCT paper with below 40 Cobb value. The Cobb test determines the amount of water absorbed into the surface by a sized (non-bibulous) paper, paperboard, and corrugated fibreboard paper or paperboard sample in a set period of time,” Mr. Bhargava further told.

“The good thing in China market is that the size of the paper reel and GSM range in all over the country is fixed. Like 100 to 115 GSM paper used all over China, which is not in India,” Mr. Bhargava observed. 

Mr. Hardik Patel takes his stand on quality very firmly; he said “they have high-speed corrugation lines so they demand quality and better paper. They insist majorly on imported fibre so that breakage of paper could be avoided. They also want good rewinding parameters,”

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