The Hindu Business Line : These paper mills brave lean season, increase prices

A NEW class has emerged among large domestic paper mills, taking advantage of their access to modern production technology. This class of mills, primarily virgin fibre-based, have started showing their strength by revising the price of their products even during the current "lean season" in the domestic paper market.

Incidentally, these mills, not many in numbers, have the capability of producing high quality writing & printing and map litho papers and duplex board. Ballarpur Industries Ltd (Bilt) of the L.M. Thapar group, being a leader of this class of mills, revised prices a fortnight ago.

It was followed by Sashesayee Paper Mills and Sirpur Paper Mills, while Andhra Paper mills and The West Coast Paper mills revised prices from September 1. JK Paper Mills and a few others large mills are contemplating doing so within a few days. Prices of all varieties of high quality cream wove and map litho papers were revised by the mills in the range of Rs 600 to Rs 1,000 per tonne.

However, certain virgin fibre-based large paper mills, with substantial production capacities, have refrained from revising prices during the current season. They feel that the revision of prices may not be accepted by the market because they do not have the facility to produce different varieties of high quality paper.

Local paper trade sources said that the mills, with capacity to produce high quality paper, enjoy strong buying support from within the country and abroad.

These mills have already exhausted their inventories while their order book position is good. Hence the decision to effect the price revision even during the lean season.

The sources said that, on the contrary, medium and small paper mills, mostly based on waste paper and recycled raw material, were in a defensive position. Most of them produce popular varieties of writing & printing paper through conventional production technology. Since the number of such producers was high, they had to compete among themselves to sell their paper.

The domestic paper market in general is not bullish at present, except for the newsprint sector. The newsprint market has been buoyant for the last couple of months because of higher prices ruling in the international market.

Armed with a favourable market situation, domestic newsprint manufacturers recently increased prices on an average by Rs 1,000 a tonne.

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