Warnings that Indian paper recycling mills are “doomed” unless they receive Government support

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JK Paper in India
An Indian Paper Recycling Mill belonging to JK Paper

India’s Gujarat Paper Mills Association (GPMA) has said that the survival of Indian paper recycling mills will need Government support, otherwise they are “doomed”.

GPMA president Sunil Argawal said that mills were already facing a situation where the beginning of 2020 had seen an upward trend in waste paper prices globally, which forced Indian recycling paper mills to hike prices by around 20% prior to the lockdown. However, this price increase had yet to be fully absorbed by the packaging industry to counteract the effect of the price paid for recovered fibre.

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He added: “Then came lockdown due to Covid-19 pandemic. During this lockdown, 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 lockdown 2 gave permission to a 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.

“Then came lockdown 3, making it more difficult for the industry, [having to pay] salary to workers, [while] fixed and various other expenses had become a big pain to survive with the increase in various additional costs due to the extended timeframe.

“Post lockdown, after re-opening, the paper industry fears that there will be a huge hike in price of finished paper as waste paper availability has also gone down drastically as many countries are incinerating waste paper out of fear of the spread of the virus, and many sending the waste paper to landfill.”

He therefore asked the India Government to implement the following measures to enable the Indian paper mills to survive:

  • Collection of Goods and Sales Tax for one year be deferred to allow the kraft paper industry to pay in 120 EMI (monthly repayments) interest free
  • During lockdown period, no detention, no demurrage, no ground rent, no late filing fees, no interest whatsoever should be an order by the Government of India and violation of the order to be penalised, and [there should be] no court proceedings [against mills]
  • Lockdown period to be deleted from the calendar, as if these days were never there, this should imply for everything, 24 March to 17 May should be no more in the calendar of 2020, to treat 18 May as 24 March 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.

He added: “It is very much feared that unless a proper relief package is given by the Government, the paper industry will be doomed.”

Indian recyclers are in dispute with shipping lines and container depots over demurrage charges after the Ministry of Shipping issued guidelines during the first term of the Indian lockdown urging them to waive fees such as demurrage. Not only were these guidelines, but there is also argument over the time period this applied to including the second and third phases of the Indian lockdown.

The Materials Recycling Association of India has also warned that the recycling industry in the country faces severe challenges as a result of the lockdown.

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