'FTAs with Southeast Asia a threat to paper industry'

The over Rs 40, 000-cr Indian paper industry has already increased the prices of its products by 10-15% this year

Free trade agreements (FTAs) with Southeast Asian countries like Malaysia, Thailand and Indonesia are posing a serious threat to the Indian paper industry, which is already reeling under tremendous pressure because of high input costs and pulp wood shortage, said KS Kasi Viswanathan, chairman of PaperTech 2014 and managing director of Seshasayee Paper and Boards Limited.

Speaking to mediapersons on the sidelines of the event here on Friday, he said the duty-free import of paper from these Southeast Asian countries, courtesy the FTAs, was putting pressure on the profitabilities of Indian paper firms, which were being forced to hike their prices,  resulting in creation of more space for such imports which are cheaper by Rs 3, 000 a tonne.

The over Rs 40, 000-crore  Indian paper industry has already increased the prices of its products by 10 per cent to 15 per cent this year, and according to Viswanathan, a further hike is inevitable as they have no other option.

“The Indian Paper Manufacturers’ Association has made a representation to the ministries concerned, and we are hopeful of hearing a positive response from them soon,” he said.

Viswanathan said the Indian paper industry, whose growth had been linked to the Gross Domestic Product (GDP) of the  country,  had seen a negative growth last year owing to the growing imports from Southeast Asian nations.

“Added to these woes is the increasing pulp wood prices, which is making it tough for the industry to survive. Now that the farming community is showing interest in growing  pulp wood trees, we are hopeful wood production would be good in another two to three years from now,” he said.

At present, one-third of the Indian paper industry's raw material requirement is met by wood, one-third by agri-based wood like sugar cane pulp and straw and the remaining through waste paper.

Earlier in his address, Sanjay Singh, co-chair of PaperTech 2014 and divisional chief executive, ITC Limited, said the Indian paper industry had been moving towards  being world class and had learnt to survive in difficult times.

“About 30 years ago, we used to consume 250 cubic metre of water to produce a tonne of paper. Now, we have reduced that to 40 cubic metre. Efforts are on to bring it further down to 30 cubic metre,” he said.

Taking note of the growing popularity of the electronic media when compared with the print media, Singh said the former was consuming more energy — right from programming to streaming to viewing.

“People, however, will realise that paper (newspaper) would be a better option than the electronic media ... if not now but  may be after a couple of years,” Singh said.