The Hindu Business Line : Yash Papers sees demand growing at 6.1%

Demand for paper, including writing, printing, industrial and newsprint varieties, is growing at around six per cent in India as compared to a global average of about three per cent, Yash Papers Ltd said in its annual report of 2005-06.

Demand for paper in India is projected to grow at a compounded annual growth rate of 6.10 per cent from 2004-05 to an estimated 7.4 million tonnes in 2008-09.

One of the demand drivers is the Government's commitment to education and has increased the total outlay to that effect. A reduction in excise duty on printing, writing and packaging papers from 16 per cent to 12 per cent, robust GDP growth, increasing export thrust and the presence of a large modern retail formats and convenience stores also will drive demand.

Demand of writing and printing paper - uncoated and coated - industrial paper - kraft and MG poster - are seen going up over the next three years, Yash Papers said quoting a Cris Infac study.

Yash Papers expects to capitalise on the demand growth projected for MG poster paper and has embarked on manufacture through its third paper machine by October 2006. "Yash Papers is likely to emerge as India's largest manufacturer of MG poster paper with an installed capacity of 25,550 tonnes of per annum," it said.

The company pointed out that raw material management is critical for it because of the upward movement of input costs. The company's primary raw materials comprised bagasse, wheat straw, old gunny/jute, domestic waste paper and imported waste.

In order to strengthen its backward linkage, the company plans to distribute saplings - poplar, subabul and casuarinas - to cover nearly 50,000 hectares across Uttar Pradesh, Bihar and Jharkhand.

"This will achieve two objectives - prepare the ground for the company's proposed capacity expansion and diversify its raw material dependence,'' Yash Papers said.

Shares of Yash Papers have been quoting at Rs 8 on BSE.

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