APP Investment: Domestic paper companies shall feel the heat to improve the quality of its offerings

APP Investment: Domestic paper companies shall feel the heat to improve the quality of its offerings

- A boon for the domestic manufacturers, consumers and users as they would be getting quality papers at competitive prices

Asia Pulp & Paper (APP) Sinar Mas is considering the construction of a paper production facility in the Raigad district of the western Indian state of Maharashtra. The site in Dherand village identified for the facility will have a capacity to produce 1.2 million MT of paper products including printing paper, tissue and packaging board. By 2025, Asia Pulp & Paper intends to begin its enormous capacity in India to produce WPP, tissue, and packaging boards

The many stakeholders in the paper business are briefly discussed in The Pulp and Paper Times on the APP's investment. We get a range of answers and criticism. Here is the opinion of Mr Aseem Bordia, President, Federation of Paper Traders Associations of India (FPTA):

The Pulp and Paper Times | 2023: 

Q: Does Asia Pulp and Paper's (APP) 1.2 million MT capacity hurt big and small paper mills in terms of the export of paper? 

A: It is very unlikely that the proposed 1.2 million MT capacity of APP shall hurt the domestic big and small paper mills in terms of exports. If at all APP will be competing against the large mills and not small paper manufacturing units as APP would not be producing corrugating liner and or packaging grade papers. Presently the exports are chiefly by large units. 

Q: Is this massive capacity good for the Indian market or it will derail market sentiments? Please explain 

A: The new proposed capacity by APP shall be a boon for the domestic manufacturers, consumers and users as they would be getting quality papers at competitive prices. The new plant and machinery are likely to be a new state of the art machine with the latest technology. This would also set in new bench marks for the existing players with regards to quality, finishing, delivery and pricing. In fact, it would be a boost to the “Made in India” initiative of the government of India. 

Q: APP will manufacture WPP, Tissue and Packaging Grades. Will the local market of these grades experience a slowdown? How do Indian paper mills compete in these grades?

A: With the domestic paper demand growing consistently over the years, increasing population, and growing disposable income, the local markets are unlikely to face a slow-down, but there could always be the impact of cyclicality. Even APP would feel the heat of down turn of cyclicality. The domestic paper companies shall feel the heat to improve the quality of its offerings and bring in new and upgraded technology.

Q: Any other comment on APP's investment?

Overall APP investment should prove to be a boon to the domestic paper sector as it would more emphasis on the introduction of new technology and better quality products.
 

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