Paper companies raise prices as costs soar

Last Updated: Fri, Dec 07, 2012 07:41 hrs

pReversing a trend of price cuts in the last quarter paper companies such as Ballarpur Industries JK Paper and West Coast Paper Mills have managed to effect a series of hikes in the current quarter in a bid to pass on the rise in input costs to consumersppA further price rise is likely in January when demand picks up industry officials said This is a clear indication that pricing power has returned to the industry and the October-December quarter will be the best in terms of earnings for paper companies in 2012ppCurrently coated paper is selling at a price ranging from Rs 56000 to Rs 57000 per tonnepp br br Several paper companies have recently increased prices by Rs 1000-2000 per tonne across categories while raw material prices jumped by Rs 4000-5000 a tonne said Madhukar Mishra managing director of Star Paper Mills &ldquoMore increase will be required&rdquo said Mishra who is also president of the Indian Paper Manufacturers AssociationppThe industry is hopeful of increasing prices further with the demand season of publications and exercise notebook setting in early next year &ldquoWe will look at more increases in both coated and uncoated segments as demand is buoyant and there is not much stock in the pipeline&rdquo said A K Ghosh vice-president sales and marketing JK Paper An increase in the import price of coated paper by around Rs 1600 per tonne had helped Indian companies to increase prices he addedppThe industry has been witnessing cost push in imported raw materials like pulp chemicals and coal due to a depreciating rupee Recent revisions in power rates in a number of states have also added to the costppK L Chandak executive director of West Coast Paper also said there was scope for further price revision &ldquoGiven the input cost push seen in the last few months a hike of Rs 5000 is required However we cannot go for steep hikes since it might lead to preference for imported paper&rdquoppAn industry official said government purchases usually peak during the fourth quarter as departments try to utilise unspent budgets &ldquoThis is also expected to support demand&rdquo he said India is one of the fastest growing paper markets in the worldppLast quarter several big companies had cut prices by up to Rs 2500 a tonne in the uncoated segment and up to Rs 3000 in the coated segment This was effected to maintain sales hit by a lean monsoon season Ghosh said the current quarter would be better than the previous two quarters for the paper business due to a revival in pricesppJK Paper has reported a net profit of Rs 188 crore in the first half of the financial year down 39 per cent from the last corresponding periodp

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