GPMA: Corrugators & Waste paper suppliers to engage in best selling practices and don't indulge in any Trade War

GPMA: Corrugators & Waste paper suppliers to engage in best-selling practices and don't indulge in any Trade War

We need to emphasise government to have "the national recycling policy" to be implemented as soon as possible

The ongoing crisis of waste paper is becoming severe for all sections of the paper industry. Price is rising unexpectedly and the margin of corrugators is on the verge. The Pulp and Paper Times takes a sneak view of the current situation, and put our questions before Mr Sunil Agarwal, President of Gujarat Paper Mills Association (GPMA). Here is his view over the situation:

Gujarat | 2nd December 2020 | The Pulp and Paper Times: 

Q. How do you evaluate the current Waste Paper Crisis, is it really a demand-supply gap that exists in the market? and prices go up?

The feedback we are getting from various paper mills and suppliers is, due to second wave of covid in various European countries, the collection has gone down, the lockdown has also been initiated in certain countries, resulting in lesser collection, India being a net importer of waste paper, and demands have risen due to these lockdowns and poor collection. Prices have started moving upwards. This is temporary and not permanent, no sooner these lockdowns are removed, collection will increase, prices should stabilise.

Q. There is also a one equation revolving in the market that due to the heavy export of paper or pulp from Morbi to China, India is facing fibre deficiency because the finished paper is not consuming in India. Should there be a ban on the export of paper for a while, till the situation becomes stable?

See, on one hand, we are asking whether export should be banned and at the same time, we are saying that paper is not consumed in India!

Actually, the paper industry is also in distress due to rising imports of stock lots and imports under FTA from Indonesia, Thailand and many other countries. This has caused tremendous harm to the Indian paper industry which is in a very nascent stage. The ‘Make in India’ policy of honourable Prime Minister should consider banning the imports of paper immediately. 

Many Paper mills has reported about prices reduction significantly in the second and third quarter of 2020 putting in question of survival of paper mills which directly and indirectly give employment to more than 6 lakh labour.

The rising input costs are now making it difficult for mills to operate. Paper industry is highly fragmented in nature. Long term survival has become a question for many paper mills who are already running hand to mouth operations. 

Q. There is a disruption in the imported waste supply chain due to 2nd wave of Corona, Being a Paper mill association, Where does GPMA gauge the core of the problem -i.e. the price of imported OCC or Shipping containers non-availability or low collection of  Local waste paper?

There is no disruption in supplies of waste paper, as stated in the above point, prices are higher due to low collection, India is not the only country importing, there are many, supplies is in abundance, we give asking price, we get material, local waste paper collection is also at its normalcy. Just that imported waste prices are high, local waste paper demand is also high and prices high. Paper mills are taking their own stand in buying and giving their own bid to their suppliers, it is on auto mode. Nobody is guiding anybody; everyone is running the show as per their requirements and planning their raw material.

Q. Federation of Corrugated Box Mfrs of India president (elect) Milan Kumar Dey questioned the role of paper mills for raising prices sharper than their raw material supply disruptions in a media report. How do you see this matter as an association?

Association is in no way connected with paper mills for pricing; they are not advising any mills regarding the pricing of raw material or for finished paper. There is no role of association as such. All paper mills are raising prices as per their own pricing standards and their costing. 

Q. Mr. Dey also says that the price of domestic waste has increased only by Rs 2-3 per kg. It is a real question why prices of Kraft paper raised so much and so rapidly, How does GPMA counter this allegation?

GPMA has no say on anything of what Mr. Dey has to say. GPMA has no role whatsoever in any pricing mechanism. Mr. Dey has been informed or he must be having information of waste paper prices going up by Rs. 2-3, but The Pulp and Paper Times’ article of yesterday says that some paper mill has given figures of waste paper price going up by Rs. 8-9 per kg. Like I stated earlier, prices of waste paper buying by the individual mill is his own decision and he buys at his own costing.

Q. Any other message GPMA wants to give Corrugators and waste paper suppliers?

This covid situation has affected all the industry, waste paper collection, paper production and also corrugators. Corrugators end-users are also affected, paper mills have made huge losses in this covid time, we appeal to all corrugators and waste paper suppliers to engage in best selling practices and don’t indulge in any trade war. It is absolutely necessary for the corrugating industry to make understand their end-users about the prevailing scenario and transfer the burden of rising pricing of their raw material partially or wholly on to their customers. Commenting and fighting for survival with the mills will not solve any purpose as paper mills are themselves fighting for their survival. Waste paper is a commodity that always has been dictating markets for the last many years. Fibre shortage across was there, is there and will be there. we need to emphasise to the government to have "the national recycling policy" to be implemented as soon as possible, this way collection of waste paper at home can increase and dependency of imports can go down, markets can then be dominated for ourselves.

Web Title: GPMA Corrugators Waste paper suppliers to engage in best selling practices and don't indulge in any Trade War