The country’s paper industry is faced with severe pressure on margins as input costs have nearly doubled in the last two years and the free trade agreement with some countries has encouraged cheaper imports, according to a top executive in the paper sector.

KS Kasi Viswanathan, Managing Director of Seshasayee Paper and Boards Limited and Chairman of PaperTech, said, “There has been constant pressure on margins for the paper sector as the cost of raw material and other inputs, such as power tariffs, have gone up significantly. But we cannot always pass on all of the costs to the customers.”

Speaking at CII Papertech-2014, he said the FTA leading to paper imports from countries such as Thailand and Malaysia have put tremendous pressure on the domestic players. This is particularly so in some select segments such as cut papers. Therefore, the industry body Indian Paper Manufacturers Association has taken up the issue with the new Government and the Commerce Ministry to address concerns.

Asked if the sector plans to increase prices as the costs have gone up, he said, “We do not have options. But every time costs go up, we cannot simply pass them on. Therefore, we are cautious and seeking other ways to address this, including improving internal efficiencies.”

He said that the focus of PaperTech is to share some of the best practices and case studies with regard to energy and water savings so that other companies in the sector could replicate the success stories.

Michael Amick, Jr, President, International Paper India, said the company was committed to sustainable growth in the country as it has been doing it wherever it has presence globally. He predicted a vibrant growth of the sector in the country.

Sanjay Singh, Divisional chief Executive, ITC Limited, PSPD, said that the paper industry is passing through challenging times and needs to lay special thrust on sustainability by focussing on raw material security and encouraging plantations in a big way.

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