First of all, paper mills had increased prices by Rs 1,000 per tonne in March 2016. The result of which was seen in the first quarter of the financial year of 2016. Secondly, paper requirement is at its peak between October to March which it attributed to the boost in the season. This is primarily because of procurement done by publishers, excise book manufacturers, calendars, and diaries manufacturers, etc. Thirdly, over all procurement costs for the mill has reduced in chemicals and fuels attributed to a fall in petroleum prices/coal. Also, the rupee was slightly stronger during first quarter of financial year 2016-17. Other contributing factors include the Central Government which in the Union Budget has announced zero duty on import on wood chips.
The previous three years, we have seen difficult times for the industry and credit needs to be given to the paper mills that during these tough time they were able to lower the cost of production along with optimize the production and the product mix. Lastly, the closure of some paper mills and production constraint at Sirpur, HPC etc also help us with the turnaround.