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Tuesday, Nov 30, 2004

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Leather, textiles export drive duplex board demand

R. Balaji

Chennai , Nov. 29

DEMAND for packaging material, particularly duplex boards, is set to increase, boding good for board manufacturers - large and small. Export growth in a host of industries such as leather, textiles and pharma will help sustain the buoyancy, according to the board manufacturers.

In the south, the growth in exports in leather products and the anticipated growth in textiles and garments next year is driving demand for duplex boards. Along with these markets, the seasonal demand for items such as notebooks and matchboxes is also expected to grow, pushing the need for duplex boards, according to industry sources.

According to a Chennai-based dealer, duplex board manufacturers including large players such as ITC and West Coast Paper Mills are gearing up for the growth in demand. Smaller mills are also getting into the business and existing units are expanding capacities.

In the last one year, manufacturers have hiked prices by about Re 1 - Rs 1.50 a kg, with the basic price at about Rs 19 - Rs 21 a kg. The smaller mills have also hiked prices by Re 1 and demand by around Rs 18.50 a kg. The prices are now stable due to the post-Diwali season.

In Tamil Nadu, the demand for duplex board is about 12,000 tonnes a month with consumption concentrated in areas such as Chennai, Sivakasi, Tiruppur and Coimbatore.

In Chennai, for instance, the monthly demand for duplex boards is about 2,000 tonnes with the leather goods segment being a major consumer of duplex board needed for shoe boxes and wallet boxes. Exports have been on the rise and so has demand for board.

Tiruppur, a major garment export centre in Tamil Nadu, consumes about 750 - 1,000 tonnes of duplex board, and this is expected to grow by about 25 - 30 per cent next year. According to the traders, the estimates are based on the anticipated growth in exports, which the textile exporters say will happen when the quota regime is phased out.

Both dealers and manufacturer acknowledge that there is an `overall positive trend' in the demand and outlook for packaging boards. Apart from an industry demand, there is a growth in the retail sector with the focus on competition and aggressive marketing. These boards are ideal in terms of utility and aesthetics.

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