The Hindu Business Line : Kraft Paper to hike prices by Rs 1,500 a tonne

KRAFT Paper Mills, based in Gujarat and Maharashtra, has decided to increase its basic prices by Rs 1,500 per tonne or 10-12 per cent for all grades from April 25 due to the steep increase in basic input costs.

The cost of raw material waste, power, coal, chemicals, high clearing and forwarding charges, labour charges and maintenance has gone up sharply in the last few days.

The last upward revision was made one-and-a-half years ago.

"The survival itself is at stake. Kraft Paper Mills has no other option but to revise basic prices upward," Mr Vijay Madnaik, President of Gujarat Paper Mills Association (GPMA), told Business Line. "Demand from the packaging sector is limited. On the other hand, excess capacities have come in recent months," Mr Madnaik said. Kraft Paper Mills had reduced its prices by about 10-11 per cent last November due to an increase in supply.

"In fact, we have restored our prices if you compare with November's revision. The cost of some of the basic inputs such as coal has gone up by 30-40 per cent," Mr Prakash Rathi, President of the Maharashtra Paper Mills Association, said.

Waste paper and coal are in short supply. "As a result, some of the mills are importing waste paper from the US, but the landed cost of imported material is still higher by Rs 3 per kg over local supply," Mr Madnaik said.

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