Export of paper will balance the supply and demand; China Ban on OCC creating new opportunities

Export of paper will balance the supply and demand; China Ban on OCC creating new opportunities

Resonance Paper Mill is located in the strategic location of Rajkot-Morbi Highway, Gujarat. Also to be noted is its close proximity to Mundra and Kandla ports. The paper mill is spread in an area of 1,80,000 square feet. Resonance Paper Mill Private Limited manufactures multi-layer high-quality kraft paper, with a range from 16 to 35 BF and GSM from 110 to 300, using its paper machine with size press technology. Paper Mill use reliable and highly-efficient lab equipment for testing of manufactured paper. Its experts are constantly conducting research and experimenting to improve paper quality and save energy resources. The capacity of our plant is 48,000 metric tonnes per year.

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The administration of the company, and its sales team, in its headquarters in Morbi are constantly strategizing to boost business and build it as a bigger brand.

Recently The Pulp and Paper Times got the opportunity to Interact with Mr. Abhishek Agarwal, Director at Resonance Paper Mill. He shares his views on the current paper industry situation, Waste paper price hike, China Ban on waste paper and other issues. Here is the conversation… 

Morbi | 19th January 2021 | The Pulp and Paper Times:

Q1. During Lockdown, the consumption had plummeted in western countries and this has led to reduce collection and generation of waste paper, also Work from Home culture has had an impact on office waster generation as well. Considering the situation of the waste paper collection system, prices are soaring up. How do you see this situation and ensure the availability of waste paper in time & at minimum prices? 

As we all know, that this situation is not permanent and once the epidemic over the collection of waste paper also will become normalize as it was in the past. In the other side if we compare both demand and supply of finished and waste paper respectively, both are on the lower side. Things are going better since last 3-4 months in terms of shipments, but yes prices are going very high due to strong demand from all over the world. prices depend upon demand and supply ratio if demand becomes strong and supply becomes less then prices will definitely go up and if vice versa then price will down so in our paper mill business the recent demand of waste paper is high and raw materials supply is slow so prices are high recently. 

Q2. How do you see the complete ban on waste paper import by china government in its country and how do calculate the impact on market dynamics of supply and demand? 

ANS: China govt completely ban on solid waste import by Chinese companies from effective 1st January 2021 due to pollution issues and this decision brings many new opportunities for many Asian countries including India. According to me this decision of the Chinese government will be in the interest of their people because for last two to three years pollution has become very strong issue in china. Due to the shortage of waste paper materials in china the demand of OCC pulp and different kind of media paper demand continuously increasing and now Indian paper companies have one more option to sell their goods to overseas buyers. As we all know that Indian production capacity is larger than demand so I think export of paper will balance the supply and demand and this will be beneficially for our trade. 

Q3. The Lobby of the paper mills in Europe is now building up the case for a total ban of exports of any kind of waste strongly supported by media & NGOs. If this ban happens, there will be a significant drop in local prices of recovered paper thus make European paper mills more competitive when selling to China. This ban will have a significant adverse impact on Indian Paper Mills. Considering this demanded ban, how Indian Paper mills will arrange the quality recovered paper in a regular manner and being non-competitive, how the Indian industry will secure its global buying market? 

ANS: To be honest, I am not much aware of this news properly but according to my opinion European region have a surplus capacity of waste paper and their collection of waste paper is more than their production, so by utilizing demand-supply ratio they must have to export their waste paper to other countries and there govt is also supporting their decision regarding waste paper export. In India, we don't have a surplus capacity of waste paper and our domestic waste paper collection can’t fulfil domestic paper factories' demand so our govt allows import of waste paper without import duty and banned on export of waste paper from India to any other countries. In the present time Indian paper factories are more focus on quality and services so this is the reason that the demand of Indian paper increased from last two year and global market open for Indian factories. Competition in every business increasing day by day and for standing in the market we have to focus more on quality, service and productivity. 

Q4. As the paper industry is witnessed of the highest soaring of prices of recovered paper and the situation may become worsen in the coming time, don't you think, Indian Paper Industry should stop the export of the paper just to save local waste paper collection system, domestic paper conversion industry, buying interest of consumers for converted paper products and also most important, secure itself from the recovered fiber deficiency in coming time? 

The prices of waste paper increased due to mainly shortage of waste paper collection and secondly due to over shipping freight. After input raw materials prices hike we also increase our finish paper prices and domestic market as well overseas market also accept this increment because now a day’s all are aware the present situation. I don’t think paper factories should stop paper export because present domestic demand is not too strong to fulfil all mills production, so paper factories must have to indulge in paper export, if they don’t, then as per my opinion all mills cannot run there plant by full capacity and they may have to face production losses.

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