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Sector Focus : Paper

Paper: State of industry (2000-01)

Paper and paperboards: Tariffs, prices and landed costs

	Tariffs (per cent)				Prices (Jan 2001)			Landed costs (Rs/tonne)
	Customs		Excise		Domestic		Intnl	Pre- budget	Post budget
	2000-01	01-02	2000-01	01-02	(Rs/ton)		($/ton)
Newsprint	5.5	5.0	0.0	0.0	30,700		710	34,928	34,763
Maplitho	44.0	40.4	16.0	16.0	34,707	1	725	57,616	56,160
Duplex board	44.0	40.4	16.0	16.0	27,725	1	500	39,735	38,731
Art paper	44.0	40.4	16.0	16.0	44,745	1	850	67,550	65,843
Art board	44.0	40.4	16.0	16.0	45,815	1	825	65,563	63,906
Wood pulp (hard)	9.7	9.2	0.0	0.0	22,000		470	24,527	24,411
Wood pulp (soft)	9.7	9.2	0.0	0.0	NT		550	28,702	28,566
Waste paper (OCC)	9.7	9.2	0.0	0.0	5,400	1	115	5,884	5,856

NT: Not traded
1 Market prices include excise duty and are net of trade discounts

Source: CRIS INFAC

• Demand for paper is expected to increase by 6.5 per cent, due to a steady growth in industrial production, and increased spending on advertisements by corporates.
• In the writing and printing segment, prices are expected to increase due to an increase in domestic and export demand. However, in the industrial segment, prices are expected to increase marginally, as supply continues to exceed demand.
• Landed costs of waste paper and pulp are expected to increase due to an increase in prices in the international market.
• Margins of domestic writing and printing paper mills and large industrial paper mills are expected to increase, while margins of small paper mills in industrial paper are expected to decline.

Impact factors

Company name	Impact	Impact factors
Andhra Paper	Neut	A, B
(49.25,49.25)
Ballarpur Industries	Neut	A, B
(67.20, 69.70)
ITC Bhadrachalam	Neut	A, B
(57.25,56.8)
Pudumjee Paper	Neut	A, B
(21.00,21.00)
TNPL	Neut	A, B
(38.55,38.55)
West Coast	Neut	A, B
(58.25, 60.00)

Note:
Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively.
Neut= neutral

Source: CRIS INFAC

A: The reduction in the effective customs duty on paper and paperboard is expected to have a marginally negative impact on producers. Domestic prices are likely to be affected marginally, since the price difference between landed costs and domestic prices is significant.

B: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers.

Rediff-CRISIL Budget Impact Analysis
Budget 2001

Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.

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