GPMA wants to undermine the ICCMA’s pursuant to the ban on the export of OCC pulp rolls, ICCMA claims

GPMA wants to undermine the ICCMA’s pursuant to the ban on the export of OCC pulp rolls, ICCMA claims

Kraft paper price is again increasing | GPMA represents at best about 5-6% of the Country's paper mills

Mumbai | 3rd June 2021 | The Pulp and Paper Times: 

Indian Corrugated Case Manufacturers Association (ICCMA) has blamed Gujarat Paper Mills Association (GPMA) to undermine the interest of the Box industry pursuant to ICCMA's representation to the GOI for a ban on export of OCC pulp rolls. In a recent press statement issued by ICCMA, President Mr. Sandeep Wadhwa said that, GPMA consists of about handful of paper mills primarily based in and around Vapi. It has stated that there are approx. 600 paper mills and no single mill represents even 1% of the total Kraft Production. Therefore, it would be safe to summarize that GPMA represents at best about 5-6% of Country's paper mills and have self-proclaimed themselves as spokesmen of the industry. Their views cannot be taken as the views of the Industry as a whole. 

The press note further said that, their (GPMA) reaction presumably is only to undermine the interest of the Box industry pursuant to ICCMA's representation to the GOI for a ban on export of OCC pulp rolls to safeguard our precious resources and environment and ensuring smooth supply of kraft paper to Indian Box manufacturers so that the Indian supply chain is no disturbed and to give impetus to the 'Make in India' program of the Government.

ICCMA also share the some facts or fiction over GPMA’s recent press note claiming the price of kraft paper has decreased Rs. 7 to 8 per kg in April and May months. Countering the claim ICCMA says that the fact that some drop in prices in May was just a brief aberration of 2-3 weeks due to lock-down panic and it turns out to be a temporary blip. The trend has already has started reversing back to the higher trajectory at the time of publishing the article and that curiously & conveniently has escaped mention. Imported and domestic waste prices have shot up again recently after a brief slump of 2 weeks. This information is not disclosed at all in the press release.

GPMA states in its press release that Kraft Paper & Board production in India is around 15 million tons PA. It is essential to note that there is no shortage of Kraft Paper in India. The Trade Association for Corrugated Box Manufacturers i.e. Indian Corrugated Case Manufacturers Association (ICCMA) on various occasions have cited that the Corrugated Box Manufacturers consume about 7.5 million tons per year of Recycled Kraft, if that were so, then how did kraft paper prices rise 70% in the last one year. Normal demand/supply model says that surplus capacity should bring down the prices and the ground reality reveals just the opposite, ICCMA raises a question to GPMA.

d) Another bit of misinformation is observed in this statement "Kraft Paper Mills have started closing down", if this was a fact, then other paper Mill Associations would have also raised similar concerns...there is no such noise anywhere.

e) GPMA is talking about job losses on account of 'Paper Mills closure'. This is again an attempt to garner sympathy where its' not due. Box makers have suffered far higher losses-financial as well as by way of jobs - in the last one year due to erratic supplies of kraft paper and unprecedented & unabated increase in its prices.

Clarification on Exports:

ICCMA is not against the export of Kraft Paper per se, it had represented to GOI to consider ban only OCC pulp Rolls, The reasons for the same have already been cited in its' earlier press releases & petition to GOI. Major reasons behind ICCMA's petition to GOI to ban OCC pulp rolls are:

1) The Adverse impact on environment: Indian mills are importing waste, pulping it and exporting pulp in roll form mainly to China, This is primarily because China has banned all waste imports since 1st Jan 2021 on account of environmental concern. So in effect, Indian mills are indirectly supporting China by cleaning and processing the waste here and shipping to China, virtually India into a Laundromat for China.

2) Diversion of valuable & scarce domestic waste cuttings for such export of OCC pulp rolls, the shortage that this diversion causes in the domestic supply of Kraft paper triggers increase in prices of domestic waste and reflect ultimately in Kraft Paper. 

3) Diversion of production capacity for exports of OCC pulp rolls away from domestic Kraft markets. Kraft paper is a critical raw material for box industry. Such abnormal hikes in Kraft paper have a cascading effect on the prices of every product including essential for consumption by masses.

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