The document provides an overview of the Indian paper industry. It notes that India is the 15th largest paper producer in the world, with the industry employing nearly 1.5 million people. Per capita paper consumption in India is estimated to be 7 kg in 2006, much lower than global and Asian averages. The industry is expected to face challenges in meeting growing demand due to constraints on raw material availability. Projections estimate paper demand in India could double by 2015 and reach 21 million tonnes by 2020.

1. A Review of Indian paper industry

2.  The 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
2

3.  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.
 In 2005, Japan had the highest per capita
consumption (247 kg), followed by Singapore
(228 kg), Malaysia (106 kg), Taiwan (51 kg) China
(42 kg), Indonesia (22 kg) and Philippines (16
kg).
 India’s per capita consumption is
estimated to be 7.0 kg in 2006.
3

4. Category-wise paper mills in India
(figures in number)
Category Capacity Range Number of units Capacity (TPA)
Consumption per capita,
2005 vs. 2006
Small Up to 10000 299 12,90,382
(figures in Kgs)
<2000 69 75,522
324.0
312.0 2000–5000 107 2,96,980
247.0 5000–10000 123 9,17,880
228.0
Medium 10000–20000 116 16,69,460
106.0 Large >20000 70 38,93,048
51.0 42.0
22.0 16.0 14.0 6.57.0
USA Japan Singapore Malaysia Thailand China Indonesia Philippines Viet nam India
4

5. 5

6.  Indian Pulp and Paper has
shown significant
improvements.
 There are still many
challenges & a long way
to go.
 Capacity utilization of the
industry is just 79%, due
to old technology.
6

7. 7

8. 8

9. India is the 15th largest paper producer in the
world. It provides employment to nearly 1.5
million people and contributes INR25.0 billion
to the government's exchequer. In last 55
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.
- 194 mills under purview of Board of
Industrial and Financial Reconstruction (BIFR);
nearly 60 mills with a
capacity of 1.3 million tonnes is closed.
9

10. Indian paper mills are categorised
based on the raw materials -
Recycled
wood/forest based mills, agro-residue Paper
38%
based mills and wastepaper-based
mills.
- Due to the increasing regulation and
raw material prices, the companies
are increasingly using more non-
wood based raw material over the
years. In 2006, around 70 % of the
total production is based on non-
- wood raw material.
10

11. 11

12. Due to high growth rate, Indian paper industry is very attractive
for the foreign players
Paper and Paperboard - Production in India, 2002-06
(figures in million tonnes)
• India is self-sufficient in manufacture
8.1
Installed Capacity
of most varieties of paper and
Production
7.7
7.4
6.5
paperboards.
6.2 6.4
5.9 5.9
5.2
5.6 - Import is mainly related to certain
speciality papers such as light
weight coated variety of paper,
cheque paper, etc.
- Due to the scarcity of raw material,
2002-03 2003-04 2004-05 2005-06 2006-07
the companies also need to rely on
Paper and Paperboard - Import-Export, 2002-06 imported wood pulp and waste
(figures in million tonnes) Import
0.4
paper.
Export
0.3
0.3
0.3 0.3
0.3
• In last 5 years, capacity was
0.2
0.2 increased mainly through expansion
0.2
0.2 and modernisation of the existing
facilities rather than setting up
greenfield projects.
2002-03 2003-04 2004-05 2005-06 2006-07 *
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13. • The per capita consumption of paper in India is
very low i.e. 7 Kgs in 2006, as compared to an
average consumption of 28 Kgs and 58 Kgs in
Asia and world respectively. The per capita
consumption is expected to increase to 12 Kgs
by 2020.
• The domestic paper market is dominated by
large players owing to their size, brand value
and financial strength. In 2006-07, the top 10
players control around 60% of the market in
term of capacity.
13

14. Various macro-economic factors like
• national economic growth,
• industrial production,
• promotional expenditure,
• population growth and the government’s allocations
for the educational sector influence the demand for
paper
- The growth in paper consumption is directly related
to GDP growth in the country. In the past, it has shown
the 1:1 relationship with the GDP growth rate.
- With expected GDP growth of 9-9.5%, the demand
for Newsprint and Writing & Printing Paper is expected
to grow at the same rate.
Continued availability of raw materials would be a big
challenge for the industry in the next 5-10 years.
14

15. According to the Indian Pulp and Paper
Technical Association (IPPTA), the paper
industry is expected to fall short of demand by
1.1 million tonnes by 2010-11 due to raw
material constraints.
According to ITC’s estimates, the total demand
for paper is around 8.0 million tonnes and is
expected to grow to 10.0 million tonnes by
2012 and 21.0 million tonnes by 2020.
According to Indian Paper Manufacturers
Association (IPMA), consumption of paper in
India is set to double from the current 7.0
million tonnes per annum by 2015.
15

16. Demand driven P&P industry will be
stressed by pressures of
• quality,
• availability &
• environmental considerations.
Society, CREP & sustainability issues
will demand a change in the manner
in which industry conducts itself
today
16

17.  Chip size control
 Dust & sound management
 Raw material cleaning
 Raw material Storage
 Segregation of waste paper
17

18.  Pulp quality variation: H- Factor Control
 Adoption of modern pulping digesters
 Adoption of Single/two stage oxygen de-
lignification
 Control of odour in conventional batch
digester
18

19.  Elimination of elemental chlorine &
hypochlorite from bleaching sequence
 Introduction of ECF bleaching
 Introduction of oxygen extraction stage in
bleaching (several mills don’t have
this)
 Adoption of enzyme pre-bleaching
 Look at closing bleach filtrate cycles.
19

20.  Eliminate DCE for Kraft liquor evaporation (63
per cent Indian mills have DCEs).
 Introduce concentrators for black liquor
concentration above 72 per cent
 Look at BL viscosity reduction opportunity
 Put efforts on NPE, silica and scales
management
 Introduce lime reburning systems
20

21.  Indian mills are weak in instrumentation &
process control. This results in wide
variations in quality of sectional outputs.
 Variation in quality of inputs,
poor/inefficient/outdated multiple
equipments multiplies the challenges.
21

22. On an average, recovered energy in
Indian mills meets only 45 per cent of
energy meets of pulp and recovery
section (in good global mills there is
energy excess)
22

23. • During the previous year, pulp prices went up but
companies were unable to pass on the full increase to
buyers. However, most companies raised prices thrice
this year, to pass on raw material push. They are
reporting better performance, quarter-on-quarter.
• “ he fact that companies are able to pass on the price
T
increase from time to time shows the demand-supply
gap is narrowing. Companies are also looking at
another round of price increase.
23

24.  The domestic paper industry is estimated at
around 10 million tonnes yearly. Of this, the
writing and paper segment accounts for 3.8 mt,
the packaging grade paper segment is around
4.5 mt and the newsprint industry about 1.7 m t.
 The domestic yearly per capita consumption of
paper is only 9.2 kg, much lower than many
other developing economies. The figure in China
and Indonesia is estimated at 42 kg and 23 kg,
respectively. However, all segments of the
industry are growing at eight to nine per cent or
above.
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25.  The industry is likely to see supply pressure
by the end of the year.
 The supply overhang in the paper industry,
caused by the bunching of new capacities by
leading companies such as BILT, TNPL and
West Coast in 2010, seems to be getting
over.
 After having faced overcapacity last year, the
industry is likely to see supply pressure by
the year end.
25

26.  There were many capacity additions last year,
but nobody is carrying stocks or operating at
a lower capacity. The market is absorbing
whatever is being produced.
 Demand is expected to exceed supply in
2012 and 2013,”said A Velliangiri, deputy
managing director, TNPL, which has writing
and printing paper capacity of 400,000
tonnes yearly. Others in the industry echo
Velliangiri’ view.
’s
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27.  Sustained fibre supply-Virgin & Secondary
 Sustained water supply
 Sustained energy supply & quantum
reduction in specific energy use
 Colour & chloro - organics in wastewater
 Odour & VOC’s in emissions
 Solid wastes management
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28. Strong economic growth Low consumption per capita
Indian Paper Industry
Increased government focus on
Printing Industry
education
28

29. Low consumption per capita
• India accounts for 15% of the world Paper Per Capita Consumption in India, 2003-07
population, it consumes only 1% of the (figures in Kgs)
world paper consumption. 7.0
6.0
- The paper consumption in India is just 7
4.8
Kgs per capital, as compared to global 4.4 4.6
average of 50 Kgs per capita.
• With the increasing literacy rate and strong
economic growth, the per capita
consumption of papers is expected to
2002-03 2003-04 2004-05 2005-06 2006-07
increase in the future
Paper – Demand vs. Supply, 2007-11*
- According to Economic Survey, per (figures in million tonnes)
capita spending on education, as a 11.0
10.5
percentage of GDP, has increased from 9.2
9.6 9.3 9.0
9.8
8.6 8.8 8.7
8.2
1.2% in 1983 to 4.4% in 2003, at a 7.3
7.7 7.8
CAGR of 7.1%.
• The impact of just 1 kg increase in per
capita consumption would lead to increase
in demand by 1.1 million tonnes of paper.
2007 2008E 2009E 2010E 2011E
Capacity Demand Demand
(7Kgs per capita) (8Kgs per capita)
29

30. West Coast Paper Mills (WCPM) has recorded a
88 per cent rise in its net profit at Rs. 28.52
crores in 2000-01 (Rs. 15.20 crores). Sales
and income from operations rose 7 per cent
to Rs. 351.33 crores (Rs. 328.68 crores).
Profits jumped on better realisations coupled
with an increase in demand for paper and
paper board.
30

31. • ITC Bhadrachalam Paperboards had expanded
capacity from 62,500 tpa to 1.82 lakh tpa. Following
the infusion of around Rs. 150 crores from ITC, the
company has carved a niche for itself in the export
market for coated paperboards and specialty paper.
• Tamil Nadu Newsprint (TNPL) boasts of being among
the most efficient players in the newsprint industry.
In 2000-01, the company reported sales of Rs.
596.40 crores and a net profit of Rs. 76.40 crores.
Promoted jointly by the Tamil Nadu Government and
IDBI, TNPL manufactures newsprint and
printing/writing paper with a capacity of 1.8 lakh
tonnes annually. TNPL uses bagasse as the main
input. It is now going in for de-bottlenecking to
enable capacity increase by around 25 per cent.
31

32. Ballarpur Industries Limited (BILT) is India's
largest paper company and the only Indian
company to rank amongst the top 100 paper
companies in the world.
BILT, part of the $3 billion Avantha Group, is
India's largest manufacturer and exporter of
paper, with a strong presence in all segments
of the usage spectrum, including writing and
printing paper, industrial paper and specialty
paper.
The company has a diversified production
infrastructure with six manufacturing units
spread across the country.
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33. Ballarpur Industries Limited (BILT)
 The company has 6 units, together with a capacity of 480,000 tonnes and a pulp
mill of capacity 100,000 tonnes manufacturing rayon grade pulp, in the state of
Andhra Pradesh (Kamlapuram Unit).
 BILT is expanding its production capacity in both coated and non-coated paper,
to take it to around 1.0 million tonnes by 2009-10. With the increase in overall
capacity, the company expects to double its turnover by 2009-10.
◦ In October 2007, the company announced to increase the capacity of its
coated wood free paper unit at Bhigwan in Pune by adding 190,000 tonnes.
After the expansion, the total unit capacity would increase to 315,000 tonnes.
◦ The main plant and machinery and its installation would be supplied by Voith,
Germany, while some equipment will be sourced locally from suppliers like
L&T, etc.
 In July 2007, the company also initiated a restructuring plan, under which it
would transfer 3 manufacturing units at Bhigwan, Ballarpur and Kamalapuram, to
a separate company called BILT Graphic Paper Products, which would be
transferred to Ballarpur Paper Holdings BV (BPH) after court approval. By this
exercise, the company would transfer its commodity business, which is capital-
intensive and would focus on the speciality and consumer-focused products
business.
33

34. Installed Capacity, 2002-06
(Figures in ‘000 tonnes)
480.0 480.0
457.5
406.6
386.0 386.6 383.4 407.3
358.9 369.9
2002-03 2003-04 2004-05 2005-06 2006-07
Installed Capacity – Paper unit, 2005-06
(Figures in ‘000 tonnes)
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35.  To choose eco-friendly paper:
Know
 1. The paper’s fiber source
 2. Chemicals processing
 3. Ability to be recycled or break down in a
landfill.
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