The Story of ITC-PSPD: Strengthening Long-Term Fibre Security, Futuristic Packaging Solutions, Meaningful Acquisition, and Reinforcing Its Solid Waste Recycling Footprint

The Story of ITC-PSPD: Strengthening Long-Term Fibre Security, Futuristic Packaging Solutions, Meaningful Acquisition, and Reinforcing Its Solid Waste Recycling Footprint

The Pulp and Paper Times

ITC’s Paperboards and Packaging Business is one of India’s largest, anchored in cutting-edge manufacturing, digital technologies, robust R&D, sustainable fibre value chain and strong environmental stewardship. The business drives innovation in value-added paperboards, specialty papers and sustainable materials, whilst pioneering advances in recyclable and fibre-based alternatives as well as in digital and AI-led interventions like Industry 4.0 and digital twins.

The Paperboards, Paper & Packaging Segment continued to operate in a challenging environment, with low-priced Chinese and Indonesian supplies in global markets including India, soft domestic demand conditions, leading to subdued realisations. Wood costs remained elevated during the year, weighing on margins. There was significant improvement in performance in the second half of the year aided by moderation in wood prices and increase in realisations pursuant to the imposition of Minimum Import Price (MIP) on imports of Virgin Paperboards, and firming up of global pulp prices. The Packaging and Printing Business delivered resilient performance and continues to be acknowledged as a ‘first choice packaging partner’ by several reputed FMCG companies for providing superior and cost-effective packaging solutions.

ITC's Paperboards and Specialty Papers Division (ITC-PSPD) has disclosed, that total revenue for the year ended 31 March 2026 was INR 8,766 crore, reflecting a 4.1% year-on-year increase. Total profit for the year stood at INR 797 crore, marking a 12.4% YoY decrease.

ITC-PSPD continues to focus on strengthening long-term fibre security through structural programmes across plantations, catchment expansion and productivity enhancement, which remain key enablers of competitiveness and resilience. To address long-term fibre security, the Business is pursuing a multi-pronged strategy spanning catchment expansion and productivity enhancement, alongside structured engagement with policy stakeholders to enable collaborative plantation models.

The Business has adopted a multi-tiered strategy to capitalise on this opportunity and build solutions that will replace single use plastics and meet emergent consumer needs. Within the sustainable products portfolio - ‘Platform 1’ comprises a range of recyclable, compostable and barrier coated boards and includes the ‘Filo’ series - ‘FiloBev’ (for beverage cups), ‘FiloServe’ (for QSRs, bakeries, food retail), ‘FiloPack’ & ‘FiloTub’ (for food packaging applications), ‘FiloBowl’ (for select meal and delivery formats) and ‘FiloBev Mini’ (an economic cup variant for short servings). The Filo series solutions have also been certified as compostable by the Central Institute of Petrochemicals Engineering & Technology (CIPET). During the year, the ‘Filo’ portfolio recorded double-digit growth in the domestic market, supported by strong consumer traction of sustainable packaging solutions.

‘Platform 2’ comprises a range of first-to-market Fusion boards that are fully recyclable and replace plastic ‘foam’ board. End-use applications include indoor display solutions involving replacement of plastic signboards and shelves. This platform continues to witness growing market traction, driven by increasing demand for recyclable alternatives for display and signage applications.

‘Platform 3’ offers futuristic packaging solutions comprising premium Moulded Fibre Products (MFP) made from renewable natural fibres such as wood, bamboo, bagasse, wastepaper, etc. Your Company’s wholly-owned subsidiary, ITC Fibre Innovations Limited (IFIL), forayed into the fast-growing MFP space with the commissioning of a state-of-the-art MFP manufacturing facility in Badiyakhedi, Madhya Pradesh in March 2024. During the year, IFIL carried out extensive prototyping and sampling to support the development of Next-Gen products. The Business faced challenges largely due to US tariff related disruptions. Plans are on the anvil to accelerate growth in this segment through focused market development anchored on a differentiated MFP portfolio leveraging innovation and agile operations.

A Packaging Board Centre of Excellence was institutionalised last year to deepen customer engagement, improve product performance and focus on new-gen product development. During the year, focused efforts were undertaken towards building new platforms, strengthening structural capabilities, and seeding select high-entry-barrier niches to support sustainable growth.

ITC-PSPD continues to procure wood, a key raw material, from sustainable sources. Research on clonal development has enabled the introduction of high-yielding and disease-resistant clones that are adaptable to a wide variety of agro-climatic conditions. This has not only aided in increasing farmer incomes but also enabled greater consistency in farmer earnings. In this context, ITC’s LSTC remains actively engaged in developing second generation clones with enhanced yield potential and improved pest & disease resistant attributes. The Business continues to focus on scaling up wood sourcing from core catchment areas and has increased plantations in these regions during the year. In addition, initiatives such as bund plantations and the expansion of plantations in new catchment areas, including Odisha and Chhattisgarh, have enabled enhanced wood procurement from such new areas, with further potential for increasing cost-effective access to fibre in the future. During FY 25-26, the Business achieved its highest-ever plantation coverage of around 66,000 hectares, reinforcing long-term fibre security and supporting sustainable livelihoods across its farm-forestry ecosystem.

The Paperboards division of ITC entered into a Business Transfer Agreement on 31st March, 2025 to acquire the Century Pulp and Paper Undertaking (‘CPP’) of Aditya Birla Real Estate Limited (‘ABREL’) at Lalkuan (Nainital, Uttarakhand). Commissioned in 1984, CPP is a well-established player in the Indian Paper industry with an installed capacity of 4.8 lakh tonnes per annum. CPP is a one-of-a-kind asset with a strong strategic fit with your Company’s Paperboards & Specialty Papers Business. The acquisition will add meaningful scale and economies to existing operations, provide a locational advantage for efficient customer servicing and proximity to key raw material sources, enhance resilience through multi-site operations and portfolio diversification across industry cycles.

ITC-PSPD has the distinction of being the first in India to have obtained the Forest Stewardship Council-Forest Management (FSC®-FM) (FSC®-C102390) certification, which confirms compliance with the highest international benchmarks of plantation management across the dimensions of environmental responsibility, social benefit, and economic viability. Till date, your Company has received FSC®-FM certification for over 1.65 lakh acres of plantations involving over 26,000 farmers. During the year, nearly 3.17 lakh tonnes of FSC®-certified wood was procured from these certified plantations. Your Company sustained its position as the leading supplier of FSC®-certified paper and paperboards (FSC®-C064218) in India.

The Business continues to advance circularity and resource efficiency across its operations. All manufacturing units recycle nearly 100% of solid waste generated during operations by converting the same into lime, fly ash bricks, cement, grey boards, egg trays, etc. In addition, the Business recycled appx. 1.11 lakh tonnes of wastepaper during the year, reinforcing its positive solid waste recycling footprint.

The Paperboards industry remains closely aligned with national priorities of rural employment generation and sustainable resource utilisation, while meeting the evolving paper and packaging needs of Indian consumers. The industry currently employs over two million persons directly and indirectly across the value chain, supported by substantial investments in recent years that have strengthened domestic value chains.

With structural drivers of demand in the Indian economy expected to remain strong over the medium and long-term, the prospects for the paperboards industry is poised for robust growth in the years ahead. Key growth drivers include favourable demographic trends, rapid urbanisation, a growing middle class, increasing substitution of plastic with sustainable alternatives, and supportive macroeconomic trends, reinforced by recently concluded FTAs and India’s emergence as a global manufacturing hub.

Published at : Nov 10, 2026 12:15 PM (IST)

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