Mumbai printers call for 15% price hike

In a bid to address the critical issue of price rise affecting the paper printing and packaging industry, Mumbai-based printers have appealed to the print buyers to allow a uniform price revision of 15%.

13 Apr 2017 | By Priya Raju

(l) Mehul Desai, president of BMPA with Tushar Dhote, president of MMS

In a press conference organised by BMPA (Bombay Master Printers Association) and MMS (Mumbai Mudrak Sangh), Mehul Desai, president of BMPA, said, “This is an effort to help the paper printing and packaging industry to stay afloat. Our industry is capital intensive one, and unprecedented price hike of the most important input raw material i.e. paper has aggravated the situation.”

According to the reports, the consistent influence of the recent price hike, sometimes as high as 30% in some cases coupled with extended credit period to the buyers has added to their onus of trying to make both ends meet difficult.

“Today, there are 2,50,000 registered printers in India employing more than 50 lakh people. And in spite of being twice the size of pharmaceutical industry the printing industry has still not been given an industry status by our government,” said Tushar Dhote, president of MMS.

Dhote said, “Paper constitutes of more than 60% of the total selling price of the printed product, and the price hike of the paper has hit our margins. If we do not mitigate the situation now, most of the printers will either run into losses or simply shut down. On the other hand, the buyers have largely been unwilling to raise their purchase price thereby putting immense pressure on the survival of the printers.”

Desai added, “Mumbai and the apex body of AIFMP (All India Federation of Master Printers) have come together to apprise the industry of the severity of the situation and how critical our survival has become.”

According to the reports, the aftermath of an increase in the PMT (Paper Machinery Technology) in global paper mills across the USA, China, and even Europe, a global increase in the freight, increase in pulp prices, overhead costs and an increase in labour costs, has triggered horrific repercussions on the cost structure of printers.

“This price revision will make the printers barely profitable, and will save close to 2.5 lakh printing presses employing 4 – 5 million people and their families from shutting shop,” said Dhote.

The BMPA and the MMS represent more than 800 print and packaging associations from across Mumbai city.

Facts about paper prices: BMPA and MMS document

• Recycled duplex and FBB/SBS board rates have increased by Rs 3.25 to 3.50/kg. This constitutes an increase of over 10%.

• Maplitho and other grades of paper have seen an unprecedented price increase in the last one year. At an average, the prices have increased by nearly 25%. The price of maplitho has gone up from Rs 58/- a year ago to Rs 70/- which is the price as on date.

• Kraft prices have increased by Rs 7.25 to 7.50/kg and the indications are that there would be a further increase of Rs 3/kg within a month. This constitutes an increase of over 30%.

• International prices of pulp and finished paper have shot up over the last few weeks. The price of Virgin Wood Pulp has risen by USD 125 PMT (approx 11/- per kg landed), which has led to the higher demand of waste paper. This has a direct impact on prices in India, as a majority of pulp and waste for the recycled board is still imported.

• The volatile petroleum prices have ensured an increase in film, glue, ink and press chemical prices ranging from 6-13% over the last few months.

• BOPP/PET Film rates and adhesive rates have also increased over the last one year or so. This constitutes an increase of over 7.5%.

• Packing material costs have gone up by over 30%, due to a sharp increase in kraft paper prices.

• Overhead costs have also sharply shot up post demonetisation where salaries and wages have increased. The increase in labour costs has been more than 20% considering the insistence of the Government to bring the entire labour force of the factories into the banking system, and consequent costs of compliance.