BGPPL announces price hikes amid margin pressure, abrupt policy shifts, and unviable pulp mill operations

BGPPL announces price hikes amid margin pressure, abrupt policy shifts, and unviable pulp mill operations

- Moisture content in the Wood being sourced has increased from the usual 35% to 40%++, directly affecting the cost structure
- Paper Mills are compelled to continue running Pulp Mills, albeit at low capacity
- Uncoated Paper prices have been corrected by more than 15% in the past year and are now operating at their lowest levels since the post-COVID

The Pulp and Paper Times

In response to mounting operational challenges, BGPPL has announced a price hike across its product range. The decision comes amid increasing margin pressure driven by persistent supply chain disruptions, abrupt policy changes, and the growing economic unviability of pulp mill operations. These combined factors have significantly impacted the company's cost structure, prompting corrective action to ensure business sustainability and continued service to its customers.

Bilt Graphic Paper Products Limited (BGPPL) informed all channel partners and dealers in its circular dated August 1, 2025, Wood prices continue to remain at elevated levels with no indication of relief. The ongoing monsoon has further aggravated the situation, severely impacting Wood availability. Moreover, during this time, the moisture content in the Wood being sourced has increased from the usual 35% to 40%++, directly affecting the cost structure.

“The shortage of domestic Wood has forced the industry to rely on imported woodchips at significantly higher costs. As a result, Pulp Mill operations have become economically unviable compared to imported Pulp. However, Paper Mills are compelled to continue running Pulp Mills, albeit at low capacity, to maintain critical energy balance within the integrated manufacturing process,” BGPPL’s circular said.

In another circular dated July 30, 2025, Bilt Graphic Paper Products Limited (BGPPL) informed all channel partners and dealers, that the current business environment is marked by heightened volatility and deep structural shifts. Tariffs and Non-Tariffs are no longer exceptional and have fundamentally altered global trade, creating persistent uncertainty and significantly inflating relative input costs. The traditional advantage of global low-cost producers is now less relevant — landed cost, including tariffs and freight, dictates competitiveness. These abrupt policy shifts disrupt supply chains, compress margins, and destabilize pricing structures. Paper, as a globally traded commodity, is especially vulnerable to these disruptions, making the impact particularly severe.

“Uncoated Paper prices have been corrected by more than 15% in the past year and are now operating at their lowest levels since the post-COVID period. Despite enforcing strict internal cost controls, we are now operating at unsustainably low EBITDA margins. Given the above, it is no longer possible to absorb these escalating input costs. We are, therefore, compelled to increase the prices of all Uncoated grades (excluding BPU PM#1 and Copy Paper) by Rs. 1,500 PMT, effective 08.08.2025” BGPPL informed to its channel partners.

Escalating tariffs, volatile shipping conditions (fluctuating load factors), and a weakening INR have sharply increased our input costs. Despite strict internal controls, we are now operating at the lowest EBITDA levels in years.

“In light of above, we are compelled to revise prices to maintain operational viability, as absorbing these escalating costs is no longer possible. BHU, which imports 65% of its raw materials, has been impacted the most. To partially offset the impact of rising input costs, we shall apply P1(+2000 Rs/MT) on all C2S grades w.e.f. 04.08.2025,” BGPPL said.

According to Fastmarket, Asia Pacific Resources International Limited (APRIL) is set to raise global prices by $30 per tonne for uncoated fine paper (UFP) orders from August onward, the company announced on Wednesday July 30.

The company, which boasts around 1.17 million tonnes per year of UFP capacity in Indonesia, said the proposed price hike is supported by a recent increase in demand from North America after the United States and Indonesia on July 22 reached a preliminary trade deal, under which the US agreed to drop its threatened reciprocal tariffs on Indonesian goods from the initial rate of 32% to 19%.
APRIL said the tariff adjustment would allow it to be better positioned to export to the US market, compared with major UFP exporters in other countries.

The company said it also expects to see paper demand in key Asian markets, such as China and India, picking up from August, driven by seasonal demand from education publishing and festival activities.
 

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