Newspapers have been in the news- for price wars, for constantly competing on supplements and so on. But what has remained in the backdrop, is newsprint. All that we have heard about newsprint in the recent past was when the major dailies went in for a tabloid look.
The newsprint production and consumption in recent years has not been very encouraging. The newsprint production in the year 1995 was 4,02,000 tons and grew by a meagre 18% to 4,75,000 tons in 2000. The consumption pattern was also not as heartening, showing a small growth rate of about 14% between 1995 and 2000.
The not so very rosy picture brings out issues that the newsprint industry faces. Amongst the issues is the low import duty of 5% on newsprint as opposed to 25% by the WTO standards, the issue of dumping and the high cost of input intermediaries, spares, consumables and raw material. What is also surprising is that the newsprint industry is the only industry where the inputs attract abnormally higher customs duty than that on the finished product.
Comments Raji Philip, Chairman and MD, Hindustan Paper Corporation Ltd., “The issues facing the industry are grim. If customs duty is enhanced, anti-dumping duty on imports is imposed and newsprint is declared as a declared good under the Central Sales Tax Act, the scenario would become much better."
While the scenario is grim at the moment, there seems to be hope still. While the demand of newsprint in the year was 7,90,000 tons, it is expected to go up to 9,10,000 tons in the year 2005.
Adds Philip, “There is still hope. The newsprint industry representatives have met with Balasahib Vaikhe Patil, the minister of Heavy Industries and Public Enterprises, and put their issues forth. India is a growing market, and newspapers would continue to grow in emerging markets, thanks to the limited home computer penetration, strong GDP growth, young readers and the steady growth in literacy.”
If newspapers are categorized into large, medium and small, (medium and small newspapers being defined as those with the circulation figures of less that 20,000), then the large newspapers create a demand for about 65% newsprint and the medium and small sized create a demand for about 15%. Magazines and government publications create the rest 20% demand.
“The future demand for newsprint would depend on two factors. First, the ability of publishers to design a newspaper tailored to the readers’ tastes and requirements and secondly, printability, particularly for multi-colour printing”, adds Philips.
Our typical marketing budget is usually 10 per cent of the topline spend