Mumbai: Nearly 35 per cent increase in raw material prices in the last two months may force more than 125 craft paper mills in Gujarat and Maharashtra to shut the shop, an industry body today said.
“More than 125 craft paper mills of Gujarat and Maharashtra are on the verge of closure….India and China are dependent on import of waste paper from foreign countries for recycling purpose. However, due to the increase in the consumption of waste paper in foreign countries, the raw materials prices have gone up by 35 per cent. As a result, paper mills have been losing Rs 6 per kg. If this deficit is not met, the paper mills of Gujarat and Maharashtra, having annual turnover of Rs 12,000 crore, may be forced to close down,” Gujarat Paper Mills Association President Sunil Agarwal said in a statement here.
China mills have increased the prices of ready goods by Rs 7,000 per tonne in the last 2-3 months. China can afford to pay USD 50 to 60 more for the import of waste paper from West America, Europe and Middle East, he said.
US mills have been buying American waste paper at higher rates, he said.
This results in 35 per cent increase in cost of imported waste paper for Indian mills, moreover, there is a further increase of 12 per cent in the costs due to higher exchange rate, he said.
Prakash Rathi, president of Maharashtra Paper Mills Association, said there has been increase of 25 to 35 per cent in the input cost of mills due to the rise in cost of imported waste paper, local waste, coal, chemicals, wages, power etc.
In the last 3 years, the Indian paper mills had to reduce prices by 12 to 15 per cent in spite of increasing cost, he said.
The paper mills will need to increase the prices by Rs 6 per kg if they have to survive, Rathi said.