The paper recycling industry has urged the government to compensate towards “COVID-19” damages.
May 13, 2020
The Indian paper recycling industry is largely dependent on imported waste paper from various countries. The price of waste paper mainly determines the price of finished paper. In 2019 alone, there was a 30 percent downward trend in imported waste paper prices, and Indian Kraft Paper Mills had to reduce prices of finished paper by around 30 per cent even after having export orders in hand.
“This implies that they had an excess supply even after fulfilling domestic demand,” said Sunil Agarwal, President of GPMA (Gujarat Paper Mills Association). Beginning of 2020 saw an upward trend in waste paper prices globally, which forced Indian paper mills to hike prices by around 20 per cent pre lockdown, which was yet to be absorbed by the packaging industry – as reported in a leading daily.
Then came lock-down due to COVID-19 pandemonium. During this lock-down, loads of containers full of waste paper were detained at various ports due to shutting of courier services, transportation, offices of shipping lines and restriction of movement of manpower, resulting in heavy detention charges, demurrages, ground rent, interest, late filing fees etc. Then lock-down two gave permission to few paper mills to operate for essential packaging demand of paper, which were catered somehow by the mills taking stock of the inventories being diluted, but this would not have held for too long.
“The prices of Kraft paper will skyrocket in coming times due to waste paper availability issues domestically and abroad coupled with additional cost burden due to above-mentioned factors,” emphasized Agarwal. “It is estimated that around Rs 1000 crores will be going down in vain only to shipping lines by way of detention charges etc., a burden, which the paper industry cannot absorb, and it will die, resulting in the closure of paper mills,” he added.
“The employment/manpower involved, directly and indirectly, in this paper industry is to the tune of around 100 lakhs and many would be jobless post lockdown,” said Agarwal. Therefore, for the survival of Paper Industry, Gujarat Paper Mills Association (GPMA) earnestly requests the Government of India, the following:
- Collection of GST for one year be deferred and allow the Kraft Paper Industry to pay in 120 EMI, interest free.
- During lockdown period, no detention, no demurrages, no ground rent, no late filing fees, no interest whatsoever should be an order by GOI and violation of the order to be penalized, no court proceedings. It should be a simple standing order which everyone has to obey, no between the lines meaning and / or taking advantage of language and interpreting the government order in their own interest. Govt order should be taken in full spirit of the covid-19 situation and benefits passed on.
- Lockdown period be deleted from calendar, as if these days were never there, this should imply for everything, March 24 to May 17 should be no more in the calendar of 2020, to treat May 18th as March 24th and onwards, so no bank interest, no bank overdues, no delays in payment, no nothing during these days for recycling industry.
- To adequately compensate the industry towards “COVID-19” damages.
It is very much feared that unless a proper relief package is given by the Government, the paper industry will be doomed.