Paper firms jack up rates by Rs 500/tn

Domestic paper manufacturers have hiked prices of coated and uncoated paper by Rs 350-500 a tonne, effective February 1. This is the fifth price hike by paper companies in the current financial year.

"We have hiked prices of uncoated paper by Rs 350 a tonne. There is pressure from rising raw material prices and so the hike will rationalise the market prices," said R R Vederah, managing director of Bilt, country's largest paper producer. After revision, Bilt's uncoated paper will sell for Rs 37,250 a tonne.

In the current financial year, Bilt has already increased its paper prices four times. In July, coated paper prices were increased by Rs 1,000 a tonne, while those of uncoated paper were raised by Rs 600 a tonne in September. In November, prices were hiked by Rs 500 a tonne across all categories and in December, prices were raised by 2 per cent across the board.

The price hikes are reflected in the company's bottom line that is appreciating. "More than 50 per cent of the price rise will add to the company's bottom line," added Vederah.

Bilt's net profit for the October-December quarter shows a 31.1 per cent year-on-year increase from Rs 47.4 crore in FY06 to Rs 62.15 crore in FY07.

JK Paper has also increased coated paper prices by Rs 500 a tonne. "Some of the input cost increase that we could not pass on to consumers earlier has been passed with this increase," said V Kumaraswamy, vice-president, finance, JK Paper. With this hike, JK coated paper will sell for Rs 38,300-39,000 a tonne. The company has also hiked prices four times in the current financial year.

JK Paper's results for the December 2006 quarter show a 28.48 per cent rise in its bottom line to Rs 12.18 crore from Rs 9.48 crore in the December 2005 quarter.