The existence of Indian Paper Industry can be traced back to 1812 when first paper mill was set up in Behranpur. The Industry has grown over the years both horizontally and vertically and today is the world’s 12th major paper producer. Although originally started with softwood and other grasses, the technical innovations over the period of time have enabled the industry to process various kinds of raw materials. The Indian paper industry can be divided into three segments according to the use of raw materials namely wood based, agro based (biogases, wheat straw, rice straw, sarkanda, jute, grasses, etc) and recycled fibre or waste paper based. The industry has undergone a sea change since the first paper mill was set up and today India can boast to have most modern as well as technically advanced paper mills based on annually renewable raw materials like biogases, rice straw, wheat straw, jute, etc producing eco-friendly paper which are exported in large volume.
Today there are more than 800 paper mills in India, out of which around 25 paper mills are wood based, 60 agro residue based paper mills and remaining 715 paper mills are based on recycled or waste paper. Out of total paper production in the country, 70% paper and board is contributed by these non-wood sectors of the Industry. These mills are producing varieties of paper from very simple to highly sophisticated papers, however, there are certain specialty varieties of paper which continue to be imported in the country. India is exporting about 1-2 million tonnes of paper and the figure is increasing annually.
The Indian Paper Industry accounts for about 2 % of the world’s production of paper and paperboard. The estimated turnover of the industry is approximately Rs 35,000 crore (USD 7 billion) and its contribution to the exchequer is around Rs. 3000 crore (USD 0.6 billion). The industry provides employment to more than 0.45 million people directly and 1.5 million people indirectly. The FDI in paper industry is now permitted as the industry was de-licensed from the year 1997 by the Government of India. Most of the paper mills are in existence for a long time and hence present technologies fall in a wide spectrum ranging from oldest to the most modern.
The mills use a variety of raw material such as recycled fibre, biogases, wheat straw, rice husk, wood, bamboo, etc.; approximately 30% are based on chemical pulp (wood), 48% on recycled fibre and 22% on agro-residues. The geographical spread of the industry as well as market is mainly responsible for regional balance of production and consumption. The operating capacity of the industry currently stands at 12.75 million tons. 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 13 million tons and per capita consumption is pegged at 10 kg (approx). Demand of paper has been hovering around 7% 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 poised for a big leap forward in sync with the economic growth and is estimated to touch 15-16 million tons by 2018. 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.
Non-wood based paper mills, contributing over 70% to total country’s production, manufacturing an Eco friendly paper from agro residues such as Wheat straw, Rice straw, biogases, Sarkanda etc. otherwise waste, and waste paper, as such converting Waste into Wealth and conserving forest resources to an extent to 20 million trees per year. Non-wood based paper mills, which pre-dominantly set up in rural areas, provide large-scale employment and lively hoods directly and indirectly to almost 40 lakhs people, majority are from lower income group of society i.e marginal farmers, skilled and semi skilled workers.
This industry ensures remunerative prices for various agro residues otherwise waste and was burnt in the fields. India being an Agrarian economy, the growth of agro-based industry can only solve economy and employment related issues.
The Indian Paper Industry is now at the threshold of subtle change. Almost after a decade, Indian paper industry is amidst promising future, looking optimistic and morally boosted. After opening of economy and alignment with the global trend and weaning out of quantitative and tariff protection, now paper industry is largely influenced and susceptible to the global cycle. Growth in paper industry is inextricably linked to structural economic factors like improvements in literacy rates, higher spending on education and phenomenal growth in print and media industry and it feels better than even before for number of reasons.
India is in the middle of demographic transition. It has moved into an intermediary stage of high birthrate and low death rate, but is yet to reach a point of stability. This intermediary period will naturally see high rates of population growth. The current age distribution of the population shows 34% are under age of 15 years & 58% are between 15-59 years. By the year 2016, it is expected that there will be fewer people under the age of 15 (28%) and more between ages of 15-59 (nearly 64%).
The expenditure combined together both by Central and State governments, the spending on education sector has gone to the tune of 12 times in the last 20 years. Even private sector expenditure in education has increased by 15 times in the last decade.
India’s paper consumption is expected to ride its economic growth. As per a Central estimate, India’s GDP is likely to grow @ 7-8 per cent, which is expected to accelerate the consumption of paper and paperboard. An increasing exports thrust of various products has strengthened the off take of packaging grades. The presence of a large number of modern retail formats, convenience stores and exclusive outlets is prompting FMCG players and consumer durables and non-durables manufacturers to provide innovative packaging solutions, driving the demand for packaging grades.
The growing popularity of ready to eat products and perishable foods is expected to grow the demand for packaging paper. Demand for duplex board and kraft paper is expected to rise, higher than the global average.
Till 1990 paper industry has been protected from the vagaries of global fluctuations and consumer had limited choice, but since protective veils are weaning out, forces of competition are gaining ground. Given free access to domestic market, industry is exposed to the international competition.
Indian paper market has also seen a paradigm shift in the demand pattern and consumer preferences. The increase in the income level of the middle class and phenomenal growth in higher education and also alignment with global universities has changed the mindset of consumers and their preferences. The demand for quality paper and value added products are increasing at a faster rate.
The Indian Industry has become an attractive industry for many foreign players to enter into India and establish or take over existing mills for paper production. There are number of examples to such interest and many are in the pipeline.
The Non-wood paper industry sector in India uses variety of raw materials such as agro residues namely Bagasse, wheat straw, rice straw, wild grasses etc and waste paper (recycled fibre).
India is one of the major sugar producing countries in the world, but in terms of pulping of bagasse for paper making has reduced substantially, even-though it is available in plenty, but it is diverted for power generation by sugar units for captive power generation etc. Due to incentives and other financial support from various government agencies for power generation through co-generation in the sugar mills, this precious fibrous material is not available for paper making. The sugar mills may gain financially if fibers are supplied to the paper mills rather than power generation or using as a fuel, which is very much low in thermal efficiency. In this direction IARPMA made various representations to Government of India and accordingly a committee was set up by the Ministry of Industry and Commerce to address the Bagasse issue having members from the Sugar Manufacturers and its related organizations.
India being an agrarian country, cereal straws are available in plenty yet the availability of straws for paper making have dwindled over the past few years. The main reason for the non-availability of the straw for paper making is that the diversion of this for power generation or it continued to be burnt as in the past. We have established technology for paper making from straw and in the absence of adequate quantity of raw material available the production is hampering. The growth prospect of this industry is high. There is a need to propagate the concept of paper making from straw and discourage burning in the fields.
Waste paper as raw material has immense potential for growth in the pulp and paper industry. Out of the total paper mills majority of mills are based on recycled firbes and in view of the environmental friendly nature of the raw material, and in the absence of adequate availability of other raw material a large number of mills are using this raw materials for manufacture of various grades of paper. It is estimated that the collection of domestic waste is about 25-30% of the total paper consumed and a large chunk is not collected for obvious reasons. In the developed world there is legislation for the recycling of waste paper to the extent of 80-85% but unfortunately no such legislation exists in India and a large quantity of raw material is not collected.