In what was described as a last ditch effort to survive, the country’s oldest and largest industrial employers—the paper printing and packaging industry—came together to begin a national campaign that confronts rising paper and raw material prices in order to warn that the industry could be facing ‘a complete shut down.’ They claimed, “Around 80% printers across the country are facing a shut-down due to the rising prices of paper and other raw materials.”
According to the two Mumbai associations, the print and packaging industry has been struggling for the past year, and especially the last two months, against unprecedented price hikes in the price of paper and board—a key component which constitutes more than 60% of the total selling price of print products and services. They said that print buyers on the other hand have largely resisted any price increases and are unwilling to raise their print purchase prices, thereby putting immense pressure on the survival of a large number of printers.
At the press briefing, president of the BMPA Mehul Desai said, “Mumbai and the apex body of All India Federation of Master Printers (AIFMP) have come together to apprise the industry of the severity of the situation. Over the recent period, the cost of maplitho has gone up by 12% to 28%, kraft [liner] paper by 30%, recyled board by 15% to 18% and virgin board from 6% to 10%. If we do not mitigate the situation now, most printers will either run into losses or simply shut down. In this regard, we are soliciting the support of print buyers across the country in revising print prices by at least 15%, without which most of us cannot survive.”
The effects of steep price hikes in raw materials, including paper in the past several months, coupled with the extension of credit periods to print and packaging buyers, have added to the financial stress of even well-run and efficient print businesses. The Mumbai printers say that they have never before found themselves in such dire straits and if they are unable to increase prices by at least 15% immediately, it would become impossible for them to sustain themselves as viable businesses.
The increase in costs of paper machinery technology for paper mills across the USA, China and Europe have led to global increases in freight, pulp and paper prices. These together with the increase in costs of overheads and labor have triggered horrific repercussions on the cost structure of printers. “The demand for price revision of 15% will make printers somewhat profitable, and will save close to 2.5 lakh printing presses employing 4 to 5 million people and their families from shutting shop,” added Tushar Dhote, president of the MMS.
An uncertain future awaits the mostly fragmented and unstructured Indian print industry as it faces hyper competition. Even those printers who have invested in new and rapidly changing technology and who serve niche markets have come under severe stress in the current situation. The issue is whether the new generation of the industry’s leaders can make a cogent and convincing case to evoke a positive response from print buyers across the economic spectrum, including the large consumer product companies and multinational firms.