DPIIT: 532 mills are in operation with a total operating capacity of around 24.32 million tonnes

DPIIT: 532 mills are in operation with a total operating capacity of around 24.32 million tonnes

-    In India, per capita consumption of paper is about 16.71 kg, which is far lower than the world average (57 kg. in 2020).
-    Out of 125 newsprint mills, 46 mills have stopped making newsprint chiefly due to demand-related reasons.
-    Department for Promotion of Industry & Internal Trade (DPIIT)’s Annual report on Indian Paper Industry for FY 21-22

The Pulp and Paper Times | 2022

Indian paper industry accounts for about 5% of the world production of paper, paperboard and newsprint. Govt. of India’s policy for discouraging the use of single use plastic has had a positive impact on the fortunes of the paper sector, particularly the packaging segment. Demand for paper also continued to be fuelled by requirement of quality packaging for FMCG products, ready to eat food and various macroeconomic initiatives being taken up by the government Indian paper industry is a de-licensed sector and 100% FDI inflow is allowed on the automatic route. The FDI equity inflows in the sector for FY 2020-21 is Rs. 166.66 crores. The industry structure comprises of more than 900 paper units, with an installed capacity of nearly 29.11 million tonnes out of which 5.51 million tonnes lies idle for various reasons.

As on date around 532 mills are in operation with a total operating capacity of around 24.32 million tonnes. In the year 2020-21 total capacity utilization stood at around 89% and total consumption of paper, paperboard, and Newsprint stood at 21.21 million tons. Total production for the year of 2020-21 stood at 21.70 exhibiting an increase of 5.28% on YoY basis.

There have been few moves of consolidation within the sector, but Indian paper industry remains largely a fragmented sector. It consists of small, medium and large paper mill having production ranging from 5 to 2000 tonnes per day. The sector uses wood, agro residues and waste paper as input substrates for production. Presently, in the total production, the share of wood, agro and waste paper-based mills stand at 18%, 6% and 76%, respectively. It has been recorded that most of the new green or brown field projects are coming in Packaging Grade Sector and most of them are based on Recycled Fibre (Waste Paper). Hence, total share of RCF paper-based mills are exponentially increasing.

Newsprint Segment: 

The newsprint sector in India has a prime role as an information carrier in cities as well as in village hinterlands. Looking into its importance, the government has put in place a Newsprint Control Order (NCO) 2004 in place which ensures fair trade and equitable availability of Newsprint to all printers and publishers. At present, the newsprint can be imported in to the country at 5% BCD subject to an actual user condition.

At present, there are 125 mills registered under the Schedule to the NCO with a total installed capacity of 3.30 million tons. However, as per INMA, currently out of 125 newsprint mills, 46 mills have stopped making newsprint chiefly due to demand related reasons as over 50% of the newsprint demand is being met by imports. Therefore, present domestic installed capacity of newsprint is 2.2 million tons, whereas production of newsprint in 2020-21 has been reported to be only about 1.0 million tonnes, which is stagnant since last two years. As per industry sources, this stagnancy in the newsprint production comes due to increase in cheap imports of Newsprint from overseas countries.

However, the import of Newsprint in 2020-21 stood at 0.66 million tons, which is almost 51% lower than volumes imported in 2019-20.

Impact of COVID—19

The paper industry faced tough times as the first wave of COVID hit the country. Due to the lock down, there was complete disruption in inwards and outbound supply chains. (In particular, the domestic supply chain of recovered which reflected its impact in Import of Waste paper).

This impacted over 70% of the production in one go. Initially, only 30% industry started their operation with 70% capacity utilization. But, as on date (December 2021) it has been informed by the industry source that a V shaped recovery has been achieved by the paper industry, particularly the writing/printing segment. One of the quickest segments to recover from the pandemic effect was the packaging sector. However, there were some very important take a way for industry stakeholders presented by the pandemic. The industry used this to its benefit during the second phase of the
pandemic.
 

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