(Reuters) -Indian paper and packaging board maker JK Paper reported an eighth straight quarter of a decline in profit on Monday and said it would acquire a 72% stake in private peer Borkar Packaging for 2.35 billion rupees.
Domestic paper manufacturers have been facing a double whammy of higher wood prices — a key raw material — and lower-priced imports in recent quarters.
JK Paper’s consolidated net profit fell nearly 42% year-on-year to 812.3 million rupees ($9.4 million) for the quarter ended June 30.
The core business “continued to face headwinds from cheap imports resulting in depressed sales realization and ongoing high domestic wood prices”, said Managing Director Harsh Singhania.
Net revenue from operations declined 2.3% to 16.74 billion rupees, while raw material costs rose 9.2%.
Following appeals from the industry, India launched anti-dumping probes into imports of paperboard — used in packaging of products such as consumer goods, pharmaceuticals and electronics — from Indonesia, Chile and China.
Separately, JK Paper said the acquisition of Borkar — which supplies to consumer conglomerates such as Unilever and Nestle — will help it emerge among the top three players in the folding cartons segment of packaging.
Borkar has factories in eight locations across India.
($1 = 86.6830 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru; Editing by Mrigank Dhaniwala and Shilpi Majumdar)
