Jute, paper stocks rally up to 5%. The other states like U.P. are also going to ban the use of plastic soon.
June 26, 2018
The state-wide ban by Maharashtra government on plastic products has come into effect. Shares of companies dealing in alternative to plastics were trading higher in early trade on June 4. JK Paper and NR Aggarwal were up 0.45 per cent and 0.24 per cent, respectively. Shares of Ludlow Jute & Specialities were trading over 5 per cent higher at Rs 89.50 at around 10.05 am (IST), whereas Cheviot Company was trading 2.05 per cent up at Rs 1,289.90 at around the same time.
The prohibition extends to a wide variety of plastic items, including plastic carry bags, and even thermocol. This has made paper bags, bubble wraps, jute bags and tin foils come up as alternatives. The Maharashtra plastic ban will give a momentum to the paper companies as industries that use plastics will move to alternatives.
Analysts said paper is fast emerging as a key alternative and that is a boon for the paper manufacturers. “This is an opportunity for paper and paperboard units in Maharashtra, also other adjoining states would meet the demand. Production capacity may increase and that will positively affect the industry,” said Ajay Srivastava, associate VP-research at Stewart & Mackertich Wealth Management.
