High waste paper costs hit newsprint makers

Newsprint producers are feeling the heat of a 30-40 per cent increase in the waste newspaper prices over the first quarter.

This is besides the pressure from inputs such as pulp, coal and power. Manufacturers are expecting a softening of in input costs before they review the next quarter prices in September. Newsprint-makers recycle waste newspaper to manufacture newsprint.

“We were buying waste newspaper at Rs 7,000-8,000 a tonne in the previous quarter. Now, we pay Rs 11,000-12,000 a tonne. This has an impact of about Rs 5,400 on every tonne of newsprint made as 1.35 tonne waste paper is required to produce one tonne of newsprint,” said V D Bajaj, executive director, Rama Newsprint and Papers (RNPL). RNPL consumes 180,000 tonnes of waste newspaper annually, half of which is imported.

However, newspaper subscribers are having a great time — the waste paper is now fetching Rs 8-9 a kg as against Rs 5-6 about a month ago while they continue to pay the same cover price for the newspaper.

Even imported waste paper now costs $300 a tonne as against $240 a tonne in the previous quarter. The commodity has an import duty of 5 per cent while the duty on the finished product (newsprint) is 3 per cent. Moreover, the recent strengthening of dollar against the rupee has made imports costlier.

“The Indian Newsprint Manufacturers’ Association (INMA) had requested the government to bring down the duty on waste paper from 5 per cent to nil before the Budget. However, it was not granted,” Bajaj said.

Hindustan Newsprint, a subsidiary of Hindustan Paper Corporation consumes about 45,000 tonnes of waste newspaper annually. Raji Philip, chairman and managing director of the company said that the cost of all the inputs like coal, pulp and power has moved up sharply over last one year and forced companies to hike newsprint prices. The newsprint prices (of the 45 gm per square metre or GSM variety) now range between Rs 38,000-40,000 a tonne, up 11-12 per cent from the previous quarter.

Philip, who is also the president of the INMA, said the country’s annual newsprint consumption is estimated at 2 million tonnes, with half of the demand being met from imports. The commodity is clocking a phenomenal consumption growth of about 20 per cent annually on account of new publications and more editions and pages of existing publications.