Amid a rough patch, over 20 of 100 paper mills in the state have shut down in six months, according to the Gujarat Paper Mills Association (GPMA). Marred with various concerns, the association members have planned to reach out to the state government next week.
If the government does not offer support at this juncture, the association fears, more mills may shut permanently in the coming days. Last week, the GPMA held a meeting to find out a possible solution to deal with current challenges.
“As discussed in the meeting, we planned to meet Finance Minister Kanu Desai in the current week but due to Cyclone Biparjoy, and his busy schedule, we planned to meet him in the coming week. In the meeting, we will demand a power subsidy. The government reduced the duty drawback from 4.22 per cent to 2.03 per cent. We will request reinstatement among other requests,” GPMA president Sunil Agrawal said. The mills are presently running with 4 lakh metric tonnes production capacity against the demand of 3 lakh metric tonnes.
“A single paper mill gives direct employment to 300 people and indirect employment to 1,000 people. The production of a mill per day is 150 tonnes. The paper produced by these mills is used as packaging materials. In the last two months, four mills have shut down in Vapi. In Gujarat, paper mills are spread from Vapi to Morbi,” he said. Of the 100 paper mills, 20 were in Vapi GIDC in the Valsad district before four were shut.
The challenges have impacted exports too. “Two years ago, the exports of paper mills of Gujarat and Maharashtra (150 mills) were 1.50 lakh tonnes per annum, which has gone down to 30,000 tons. The exports were done to China, Gulf countries, etc., Presently, the paper mills are running with 50 to 60 percent cut-off production, in a bid to control over production. In the last 6 months around 20 paper mills in Gujarat (Morbi, Ahmedabad, Surat, Vapi, etc.) have been shut down,” Agrawal said.
He further added, “The reason behind the present situation is the overproduction and downfall in the exports. Apart from this more mills have come into the market in the last couple of years and even they are struggling for survival. Around 50 per cent of raw materials used in our mills are imported from USA, UK, and Gulf countries, and they are in the forms of corrugated boxes.”
According to Agrawal, the paper price presently is Rs. 22 to Rs. 23 per kg and they are facing a loss of Rs 3 per kg. “In our mills, 50 per cent of raw materials used are locally available, while 50 per cent we import. The raw materials cost us Rs. 13 per kg (local availability) and Rs. 17 per kg for imported ones,” he said.
