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Wednesday, Aug 16, 2006

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Industry & Economy - Paper, Board & Newsprint
Newsprint makers plan strategy for difficult times

Badal Sanyal

Swinging facilities in plans to offset times of uneconomic sales price

INMA's survival strategy may, however, put pressure on domestic bulk consumers, particularly who depend on domestic newsprint.

Kolkata , Aug. 15

Domestic newsprint manufacturers are worried that they may find it difficult to survive only as producers of newsprint unless they acquire certain economies of scale to compete with imports. Although it will be tough for them to attain an international scale of operation on the basis of local forest raw material, the Indian Newsprint Manufacturers Association (INMA) has suggested to its member-units to examine the possibility of captive plantations abroad, preferably in countries such as Brazil, Chile and Indonesia.

Survival strategy

An office bearer of INMA has indicated that most of its member-units have decided to introduce swinging facilities in their existing manufacturing facilities so that they could produce writing and printing paper instead of newsprint at the time of uneconomic sales price of their products. In other words, they would prefer to produce newsprint only when they find its manufacturing profitable. The arrangement has been made to ensure its viability.

INMA's survival strategy may, however, put pressure on domestic bulk consumers, particularly who depend on domestic newsprint. The INMA source told Business Line that the per capita consumption of newsprint in the country would be about 7 kg as against 4 kg a few years ago.

Domestic demand

The total domestic demand in the current fiscal (2006-06) would be about 19 lakh tonnes (15 lakh tonnes). The demand was likely to grow by 10 per cent in the coming years. Importantly, consumption is increasing steadily from non-newspaper publishing applications. Therefore, the demand might be more than the projected volume.

Domestic production (about 8 lakh tonnes) takes care of only about 55 per cent of the total consumption leaving 45 per cent (7.5 lakh tonnes) to imports. In fact, India imported from a total of 54 countries in the last four years. Out of them, nine countries such as Canada, Finland, Hungary, Korea, Philippines, Russia, Sweden and USA shared most of the country's imports.

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