India to Reach 20 Million Tonnes Paper Production by FY 2019-20

India to Reach 20 Million Tonnes Paper Production by FY 2019-20

Delhi |11, January 2019 |The Pulp and Paper Times

“India continues to be the fastest growing paper market amongst large economies in the world. With domestic demand continuing to grow, the capacity utilisation rates in the paper industry are on their way up after a long time,” Said Mr. Saurabh Bangur, outgoing President of Indian Paper Manufacturers Association (IPMA) during 19th Annual session & Award Function.

“In the last 10 years, the domestic demand has almost doubled from around 9 million tonnes in FY 2007 – 08 to over 17 million tonnes in 2017-18. The industry estimates the overall paper demand to grow at a compounded annual growth rate (CAGR) of 6-7%, reaching to about 20 million tonnes mark by 2019-20,” IPMA's report says.

Amongst different segment, packaging paper and paperboard has emerged as a growth driver for the industry. Increased demand for better quality paper packaging by FMCG, Food & beverage, pharma sectors, etc is on the rise.

"The industry has made an investment of over Rs 20,000 crore in last 5 years and it needs investments of Rs 90,000 crore to add new capacities by 2030," JK Paper Vice Chairman and Managing Director Harsh Pati Singhania told two years back.

Challenges and Policy Interventions

The Paper industry's turnover is currently estimated to be over Rs. 60,000 crore providing direct employment to approximately 5 lakhs people and contributing approx. Rs. 4,500 crore to the exchequer. Raw material availability will be the most challenging job for paper industry.  India is a fibre deficient country. Availability of wood domestically at 9 million TPA is inadequate compared to demand, which is currently about 11 million TPA, and is projected to rise to 15 million TPA by 2024-25. Consequently, the cost of wood has been going up significantly over the years.

According to IPMA, mill delivered cost of domestic wood in India is higher by almost USD 30-40 per tonne as compared to other Asian countries. Due to this single factor, cost of paper production in India is higher by USD 100 per MT.

Imports of Paper 

IPMA's report further says that “Threat from rising imports of paper and paper board into India have been steadily increasing. In the last seven year, import have risen at a CAGR of 16.11% in value terms (from Rs. 3,411 crore in 1010-11 to Rs. 9,702 crore in 2017-18), and 18.15% in volume terms (from 0.54 million tonnes in 2010-11 to 1.72 million tonnes in 2017-18). Imports are growing at a very high rate as compared to the increase in domestic production rate,”

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