JK Paper on Thursday said that there has been a reduction in prices across all categories as there was very low or no demand for products as schools, colleges and other educational institutions remained shut amid the COVID-19 pandemic.
JK Paper's Q3 profit fell 50 percent and margins have also contracted significantly.
“If you compare the NSR (Net Sales Realisation) -- Q3 and last year's same quarter -- there is a drop in NSR by close to 8 percent. So there has been a price reduction across all product categories. There was no demand for uncoated, writing, printing paper as the schools, colleges, universities were all shut. So, when there is lower demand, everybody would try to sell product at a discount. This is what was happening in the paper trade,” AS Mehta, President & Director of the company, said in an interview with CNBC-TV18.
Mehta said that the paper prices were also impacted due to the pulp prices. “Globally the pulp prices which 12-15 months back were at the highest level of around USD 800 a tonne, came down drastically. Four months back they were in the range of USD 450-500 a tonne. But because that price level is not a sustainable level, it has started moving upward. Now it is close to USD 570-600 a tonne,” he said.
He said that the only advantage most of the Indian paper companies have is that they are backwardly integrated.
“The only advantage we have, not only JK Paper, most of the Indian companies, is that they are backwardly integrated players. So we are not impacted because prices move upward. There will be upward paper prices and that will help the paper companies to correct the prices,” he said.Watch video for more.