APP Investment: Procurement of high grades waste paper may also become difficult to small mills

APP Investment: Procurement of high grades waste paper may also become difficult to small mills

Asia Pulp & Paper (APP) Sinar Mas is considering the construction of a paper production facility in the Raigad district of the western Indian state of Maharashtra. The site in Dherand village identified for the facility will have a capacity to produce 1.2 million MT of paper products including printing paper, tissue and packaging board. By 2025, Asia Pulp & Paper intends to begin its enormous capacity in India to produce WPP, tissue, and packaging boards

The many stakeholders in the paper business are briefly discussed in The Pulp and Paper Times on the APP's investment. We get a range of answers and criticism. Here is the opinion of Mr Abhishek Agarwal, Director, Resonance Paper Mills:

Q: Does Asia Pulp and Paper's (APP) 1.2 million MT capacity hurt big and small paper mills in terms of the export of paper?

Yes, definitely it will hurt the big and many small mills in India. At present the production is alreday surplus in various category of paper and if such kind of big investment comes into production then export as well as domestic market will hit.

Q: is this massive capacity good for the Indian market or it will derail market sentiments...please explain
 
This is not the good sign for Indian market. At present Indian manufacturers are also struggling in sales and profitability. Many new production added recently in many states so paper industry already in stress and if such mass production will enter into Indian market then definitely its a problematic for Indian paper manufacturers.

Q. APP's will manufacture WPP, Tissue and Packaging Grades, will the local market of these grades experience a slowdown? how do Indian paper mills compete in these grades

Many mills are engaged in production of WPP,Tissue gardes and packaging grades and this time period already facings demand issues. For compete with international player the mills should have to increase quality standards and have to think about cost reduction.

The procurement of high grades waste paper also become difficult to small mills because heavy production mills like APP have advantages of purchasing and suppliers shift to major players.

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