PAPER INDUSTRY : IN INDIA AND WORLDWIDE

Indian Paper Industry

Strong economic

growth

Low consumption per

capita

Printing Industry

Increased government

focus on

education

ARUN KUMAR AGARWALENROLLMENT NO. 11120022

B.Tech PP 3rd YEAR

What is a paper industry?

• The pulp and paper industry comprises companies that use wood, agro-residue and any fibrous material which is suitable for making paper and paper based products as raw material and produce pulp, paper, board and other cellulose-based products

Global paper industry: ProductionPaper and Paperboard Production – Global Market, 2002-20

(figures in million tones)

global paper production 2012

321.4 328.1360.0 366.0 382.0

402.0

490.0

2002 2003 2004 2005 2006 2010 2020

The annual global paper and paperboard production was approximately 382.0 million tonnes in 2006. It is expected to increase to 402.0 million tonnes by 2010 and 490.0 million tonnes by 2020.

The world’s total paper production amounted to 400 million tonnes in 2012 (399 million tonnes 2011) and around 395 million tonnes in 2010.

Asia, which accounts for 45 per cent (179 million tonnes) of paper production

is by far the largest paper producer. Europe (107 million tonnes) and North

America (85 million tonnes) are also significant producers. Earlier in 2006 Asia

contributes 36%, Europe contributes 30% and North America contributes 27%

In Asia the main producer of paper are China, Japan and India. In Europe

Sweden, Germany, Finland and in North America USA and Canada are main

producer of paper.

Global paper industryProduction and exports of pulp 2012

China is largest producer of paper which is around 100+ million tonnes per annum, another larger producers are USA, Japan Germany, Sweden, Canada etc. where as in pulp production USA stands first followed by China, Canada etc. where as in export of paper USA, Germany, Sweden AND in export of pulp Canada, Brazil and USA are leading.

Global paper industryThe global pulp and paper industry consists of about 5000 industrial pulp and paper mills, and an equal number of very small companies.

Broadly, the industry can be classified into two segments:

• Paper and paperboard (writing, printing, packaging and tissue) The writing and printing paper market can be further divided into coated and uncoated segments.

• Newsprint mainly uses for newspapers, flyers, and other printed material intended for mass distribution.

Net imports Net exports

Global paper industry : per capita consumption

The US is the largest market for paper product and commands high per capita consumption. Asia’s main markets are China, Japan, India, Malaysia, Singapore and Thailand. Europe’s main markets are Finland, Sweden, Germany, Spain etc. and in North America USA and Canada are main Consumers.

china 70.7

japan 220.5

USA 236.0

Canada 169.8

Germany 237.4

china 70.7

Finland 255.9

Sweden 231.3

South corea 182.0

brazil 47.7

INDIA 9.3

France 149.4

PER CAPITA CONSUMPTION

INDIAN PAPER INDUSTRYThe paper industry in India is more than a century old. At present there are over 850 paper mills manufacturing a wide variety of items required by the consumers.

In last 60-65 years, the number of paper mills has increased from just 17 mills in 1951 to more than 666 units engaged in the manufacture of paper and paperboard, out of which nearly 568 are in operation by 2006 and around 850 mills.

These paper mills are manufacturing industrial grades, cultural grades and other specialty papers. The paper industry in India could be classified into 3 categories according to the raw material consumed.

1.Wood based

2.Agro based &

3.Waste paper based

While the number of wood based mills are around 14 and balance 836 mills are based on non-conventional raw materials (Agro Residues and Recycled fiber - waste paper)

DEVELOPMENT OF INDIAN PAPER INDUSTRY

Govt. of India has relaxed the rules and regulations and also delicensed the paper industry to encourage investment into this sector and joint venture are allowed and some of the joint ventures have also started in Indiaeffective from July,1997 and foreign participation is permissible. The paper industry in India is looking for state-of-art technologies to reduce its production cost and to upgrade the technology to meet the international standards.

INDIAN PAPER INDUSTRYThe Indian Paper Industry accounts for about 1.6% of the world’s production of paper and paperboard. The estimated turnover of the industry is Rs. 35,000 crore (USD 7 billion) approximately and its contribution to the exchequer is around Rs. 3000 crore (USD 0.6 billion). The industry provides employment to more than 0.37 million people directly and 1.3 million people indirectly.

The Indian Paper Industry is among the top 12 Global players today, with an output of more than 13.5 Million tonnes annual with an estimated turnover of Rs. 35000 Crores.

The mills use a variety of raw material viz. wood, bamboo, recycled fiber, bagasse, wheat straw, rice husk, etc.; approximately 35% are based on chemical pulp, 44% on recycled fiber and 21% on agro-residues.

PRODUCTION AND CONSUMPTIONIndia is self-sufficient in manufacture of most varieties of paper and paperboards.

• Import is mainly related to certain specialty papers such as light weight coated variety of paper, cheque paper, etc.

• Due to the scarcity of raw material, the companies also need to rely on imported wood pulp and waste paper.

Paper and Paperboard - Production in India, 2002-06

(figures in million tonnes)

6.2 6.4

7.4 7.78.1

5.25.6

5.9 5.9

6.5

2002-03 2003-04 2004-05 2005-06 2006-07

Installed Capacity

Production

The operating capacity of the industry currently stands at 12.75 million tons compared to 8.1 million tonnes in 2006-07. During this fiscal year, domestic production of paper and paperboard is estimated to be 10.11 million tons. As per industry guesstimates, over all paper consumption (including newsprint) has now touched 11.15 million tons and per capita consumption is pegged at 9.3 kg compared to 7.0 kg in 2006.

8.3

13.9

21.0

9.0

14.0

20.0

2009-10 2014-15 2019-20

Production

Consumption

According to ITC’s estimates, the total demand for paper is 21.0 million tonnes by 2020.According to Indian Paper Manufacturers Association (IPMA), consumption of paper in India will be 14 million tonnes per annum by 2015

PRODUCTION AND CONSUMPTION• Paper Industry in India is moving up with a strong demand push and is in expansion mode to meet the projected demand of 20

Million tonnes by 2020. Thus paper industry in India is on the growth trajectory and is expected to touch 8.5% GDP in the coming years. Therefore, the growth of Industry will out span the present growth rate of 6.5%.

• Demand of paper has been hovering around 8% for some time. So far, the growth in paper industry has mirrored the growth in GDP. India is the fastest growing market for paper globally and it presents an exciting scenario; paper consumption is poisedfor a big leap forward in sync with the economic growth and is estimated to touch 13.95 million tons by 2015-16. The futuristic view is that growth in paper consumption would be in multiples of GDP and hence an increase in consumption by one kg per capita would lead to an increase in demand of 1 million tons

• Many mills in India are in modernization and expansion spree. Many old Mills are under revival or new green field projects are under consideration

REASONS FOR INCREASING DEMAND

KEY PLAYERS IN PAPER INDUSTRY

KEY PLAYERS IN PAPER INDUSTRY

KEY PLAYERS IN PAPER INDUSTRY

Growth Pangs

• The increasing demand for paper brings with it new challenges of economies of scale, efficient usage of resources, need to develop and expand sustainable use of fiber, and value chain management, etc. Despite the fact that the Indian Paper Industry holds its importance to the national economy, unfortunately it stands fragmented.

• Paper sector is dominated by small and medium size units; number of mills of capacity 50000 tons per annum or more is not more than 25. Less than half a dozen mills account for almost 90% production of newsprint in the country. There is a growing need to modernize the Indian mills, improve productivity and build new capacities.

Issues and ConcernsThe Indian paper and paperboards industry has potential and also capabilities to service the growing demand in domestic and international market and also to create huge employment avenues in the rural-India through agro/production forestry and at mills, provided the competitiveness of the value chain is encouraged by the government

Major Deterrent – Fiber Deficiency

Energy Cost: The steep price rise in coal has resulted in escalation of cost ofproduction of those mills which happened to be dependent on imported coal forgeneration of steam/power. Also, power purchased from the grid is provingexpensive for the industry

Certification: Forest stewardship council certification is becoming a non tradebarrier for Indian paper companies

Developmental Challenges• Enhancing Industry’s competitiveness to face global competition

• Economies of scale

• De-fragmentation of industry

• Modernization of mills

• Building new capacities

• Meeting incremental demand of paper

• Productivity/quality improvement

• Creation of robust raw material base

• Environmental upgradation and green technologies

• Setting mechanism for collection, sorting, grading and utilization of recyclable waste paper

Innovation in paperOver the years industries have developed several new products and variants to meet specific industry & customer needs. Paper as a biosensor

Biodegradable Barrier BoardsBio Polymer boards offer barrier properties like water resistance and heat seal ability. The barrier coating can be either bio based or synthetic based. The barrier coating on the board is biodegradable.

Safire Graphik Telecard Board A safire variant suitably coated for scratch cards and smart card applications.

Digiart Coated Board offering superior color reproduction and high stiffness, specially made for digital printing.

Cyber Propac A board which is free of optical brightening agents , ideally suited for all food packaging applications.

Trump Card Board A black centered board with high smoothness and excellent resilience and flatness . Ideal for playing cards and game cards.

Coated High Burst Liner The only coated white lined chip board with an assured burst factor.

Perma White A paper developed for archival needs. Built into this paper is an age defying agent that retains the paper's natural shade without any change.

Eco Natura & Eco Blanca Grey back and White back boards that score highly on WWF's acclaimed paper rating tool.

CHANGING SCENARIO OF INDIAN PAPER INDUSTRY• Major changes are taking place in various segments like writing & printing paper,

paperboard, newsprint, tissues, etc. New technologies and modern managementwill have vital part in this process. Besides that many overseas players are enteringIndia by acquiring or by setting up new plants in Indian soil with an aim to makeIndia as a paper manufacturing hub which will bring huge investments to IndianPulp and Paper Industry.

• Today India is an excellent and vibrant market for Paper and Paper products due tohigh spending of the middle class people and some of the Government initiativesin the Social Development front also make the industry more vibrant. Many IndianPaper Mills are eying now to new mills to setup or joint ventures with existingplayers abroad to widen their business horizon.

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