Read exclusive interview of Mr. Saurabh Bangur, President of Indian Paper Manufacturers Association about current situation of Indian Paper Mills.
Spreading the Correct Picture and Perspective about the Industry on the Social Media: IPMA
Spreading the Correct Picture and Perspective about the Industry on the Social Media: IPMA
Recently The Pulp and Paper Times had got opportunity to interact with Mr. Saurabh Bangur, President, IPMA and to know the problems, the India Paper Mills are facing in plant operations. Here is detailed interview.
Q The Contribution of Indian Paper Industry to the GDP is less than 0.3%. How does Indian Paper Industry evaluate its importance in Indian Economy?
A. Indian economy is fast on its way to get a pride a place amongst the modern economies of the world. Paper Industry is poised to play its due role therein. Modern lifestyle and paper consumption are synonymous with each other. All developed nations have 10-15 times more per capita consumption of paper than India so there is a lot of potential for growth. Besides traditional domains of writing & printing, Paper Industry in India is innovating to provide effective solutions to a range of other industries and sectors. For instance, e-commerce cannot be envisaged without usage of paper and paperboard. Organised retail, cafes and restaurants are dependent on specialty paper. Paper Industry has aligned itself closely with pharmaceuticals, another poster boy of Indian industry, for packaging solutions. Similarly, for the FMCG sector.Growth in services sector has also given a fillip to the consumption of paper. So Paper Industry's contribution to the growth of economy cannot be underestimated, and will only grow with time.
Q.What are the major grievances of Indian Paper Industry and why these grievances have become important and expected to be resolved by the Government?
A. Paper industry is well aligned with the Government's priorities of domestic manufacturing, spread of education and rural employment. However, the industry is faced with challenges at both input and output ends of the value chain. The industry is raw material intensive. However raw material cost in India is one of the highest. Not only is wood far more expensive in India, its availability is also a major concern. Sustained growth in manufacturing cannot be envisaged without the availability of raw materials. However, there has been very slow progress on the industry's request for plantations around mills for securing competitively priced wood on sustainable basis. At the same time, there is no let up in cheaper imports of paper in India from countries where cost of production is much lesser on account of access to captive plantations and lower energy costs. Such imports deny the industry a level playing field and hit where it hurts the most – sales and profits. This is especially true for imports coming at 0% import duty from countries with which India has signed free trade agreements like ASEAN. Indian Paper Industry has invested heavily in capacity expansion and technological upgradation in the recent years. However significant domestic capacities are lying unutilized even as imports are meeting the increasing demand.
Q. Paper making from agro waste is considered as low costing paper production. How long does IPMA see the sustainability of Agro Waste in paper production as farming lands are decreasing as these are being acquired and converted into residential lands, industrial lands, dedicated freight corridors, roads, lands for expansion of transportation services and many more.
A. Yes, India is unique in using agro residue as a raw material for manufacturing paper. Agroresidue which would have been burnt in the fields is being innovatively used for making paper. If the availability of agroresidue goes down for factors as mentioned by you, industry's dependence on wood and waste paper as raw material will increase. There are severe supply constraints in all the three alternate raw materials, be it wood, agro residue or recycled fibre.
Q. Paper making is connected to the environmental destruction and deforestation. How does IPMA see this fact? If this is not true, then why Paper Industry fails to represent its safe side (paper production is not connected to deforestation) to the government?
A. Paper is a sustainable industry, paper being fully biodegradable, recoverable, recyclable and made of renewable resources. Planted trees or trees-outside-forests are the closest to being the most sustainable material. As against the popular perception, Paper Industry in India is not forest based, it is agro based and moreover, the industry is wood positive as it is growing more trees than harvesting. So it is a fallacy that the industry is indulging in deforestation.While Government of the day is largely convinced about the changed profile of Paper Industry, some vested interests continue to present a convoluted image of the industry. 'Save paper, save trees' is a common refrain without understanding of the issue, and totally baseless. Through all kinds of media, IPMA has been trying to dispel the misconceptions about paper.
Q.Internet is a big and trendy media. Employing the digital media in various activities and campaigns for the 'Paper Consumption Awareness' may change the perception of the people who are against the paper. What are the views and plans of IPMA in this regard?
A. Yes, digital media enjoys much wider reach today. Several of IPMA members are already involved in spreading the correct picture and perspective about the industry on the social media. IPMA too has a fully functional and updated website www.ipma.co.in through which the myths and realities about paper are being communicated.
Q. Paper Industry has been kept in Red Category by the Central Pollution Control Board (CPCB) due to heavy pollution generation. This red zone placement could hamper the image of Paper Industry in long term and may invite several unexpected actions from the Authorities. How Paper Industry can achieve the Zero Liquid Discharge to come out of red zone?
A. Paper Industry, because of the generation of affluent in its production processes, is identified by the Authorities as a polluting industry, but with installation of clean and green technologies, the larger mills are meeting the stringent environment standards for affluent discharge mandated by CPCB. Zero Liquid Discharge has not been achieved by any paper mill globally as it is not techno-commercially feasible, and the Authorities have recognized this fact. IPMA member mills are large integrated mills which have gone up fast on the technological curve in the last few years and have reduced their environmental footprint significantly. No doubt, the Paper Industry is water and energy intensive. However, IPMA member mills have taken up strong measures to reduce their water and energy consumption. IPMA members have overachieved the energy savings targets mandated under PAT (Perform, Achieve, Trade) Scheme of the Bureau of Energy Efficiency (BEE). Regarding water consumption, it has come down from about 200 cubic metres per tonne of paper produced to around 50 now.Use of paper is very environment friendly as compared to alternates like plastic, and paperboard has emerged as a material of choice for packaging as it is completely biodegradable.
Q Indian Paper Industry demands on many occasions to restrict the import of the newsprint and other papers for survival of Indian Paper Industry. Why Indian Paper Industry are failing to compete with the imported paper? Every consumer of paper has right to get cheap and quality paper and government won't want to snatch their right?
A.We are not against competing with imports, but we want a level playing field. If a level playing field is provided, the organised segment of the Paper Industry in India is all set for any competition whatsoever. Paper industry is against dumping of imports as, to a large extent, paper is being imported in India at a cost which is less than the production cost in India. As explained earlier, the cost of production of paper in these countries is a fraction of cost in India as raw material, inputs and energy is much cheaper. Further, you are allowing these imports at 0% duty. With paper demand rising in India, these countries are diverting their paper supplies to India at predatory pricing. IPMA has therefore asked for antidumping duty or other safeguard measures against such imports as otherwise the survival of the domestic industry will be threatened, and lakhs of workers and farmers will lose their livelihoods.
Q.In India, there are large number of paper making companies which are promoters' based and their operations are unprofessional such as depending on a cash economy, adopting traditional way of paper making, avoid any kind of innovations and development. As a leading Paper Association, what are the milestones you see to cover and make India's Paper Industry to acquire significant space in Indian and global economy?
A. While IPMA represents the organised face of the Paper Industry in India, it has at its heart the interest of the entire sector. IPMA has started around 10 years back the programme “Making Paper Industry World Class” in association with Confederation of Indian Industry (CII) primarily with a view to share the best practices with the industry and help the entire sector chart an upward trajectory towards sustainable goals. The programme is open to all the paper companies, big and small. Similarly, IPMA has instituted awards to celebrate excellence in paper manufacturing as well as energy and environment conservation which are open to all the paper mills. These highly coveted awards have been encouraging the mills to strive for betterment and gain recognition.
Q.Reduction in industry specific taxes attracts other industries to expect the same for their industry also. In this condition, government takes hardly any decision because of accusations of partiality. Why doesn't IPMA approach the government with value added proposal rather than just seeking tax relaxation. Here 'Value Added Proposal' means a win-win solution for paper industry and government such as Indigenous Fibre Production through Commercial Woods Cultivation in collaboration with the farmers which can save significant amount of foreign currency, improve the paper quality as more virgin fibres will be used in paper making, generate direct and indirect employment and improve the financial health of the farmers, social welfare schemes for farmers who work for Paper Industry. What are your views?
A. Broadly, IPMA is not looking at any kind of tax relaxations specific to the Paper Industry. There are a few areas where some distortions have crept in and need to be addressed. Pioneering work has been carried out by the Paper Industry over the last three decades in producing tree saplings (e.g. Eucalyptus, Subabul, Casuarina, etc.) which are disease and drought resistant and can be grown in a variety of agro climatic conditions. A large part of this wood is grown in backward marginal / sub-marginal land, which is potentially unfit for other use. In India an estimated 5 lakh farmers are engaged in growing plantations of Eucalyptus / Subabul etc. About 125,000 hectares are being brought under agro / farm forestry on an annual basis, with around 900,000 hectares on a cumulative basis across the country. This has generated significant employment opportunities for the local community.Paper Industry has the potential to enlarge the country's green cover and the Government should consider making available some part of the country's degraded forest land for pulpwood (+ fuel wood / fodder) plantations under collaborative arrangement, so that the India's Paper Industry can access raw material at competitive rates and become globally competitive. Even providing 10% of degraded forest land for raising pulpwood plantation in collaboration with Paper Industry would make available approximately 2.5 million hectares of productive plantation. The benefits that will accrue include substantial employment generation in rural areas, savings in foreign exchange outgo, potential for carbon credits, and significant increase in forest cover. We have been in constant dialogue with all government authorities and policy makers in this regard.
Q. Under GST, Government has placed the paper in four categories- 0% (Judicial Paper), 5% (Newsprint), 12% (Kraft, W/P Paper and Paper Board), 18% (Tissue & Coated Paper) and 28% (Wall Paper only). With this tax structure do you think this will improve the paper making and trading? Please share your views.
A. We would have liked a uniform rate to avoid any classification problems, but the Government worked on the principle of existing tax incidence being converted into the nearest GST rate. Higher incidence of tax on tissue paper is unfortunate since this segment is one of the fast growing categories for the paper sector in India, and for reasons of hygiene and sanitation, its usage needs to be encouraged with lower taxation.