“Paper Mills Transition from 'Made-to-Order' to 'Made-to-Stock' as Market Dynamics Evolve and the Allocation System Fades,” says Mr. Madhukar Mishra, MD, Star Paper Mills

“Paper Mills Transition from 'Made-to-Order' to 'Made-to-Stock' as Market Dynamics Evolve and the Allocation System Fades,” says Mr. Madhukar Mishra, MD, Star Paper Mills

As The Pulp and Paper Times marks its 10th anniversary, we celebrate a decade of meaningful and industry-focused journalism.

On this special milestone, we talked to Mr. Madhukar Mishra, Managing Director, Star Paper Mills Limited, about his perspective on the future of the paper business. We shared our theme, “Market Factors, Technology, and Consumer Interests Shaping the Indian Pulp and Paper Industry in the Next 10 Years.” We received very informative and deeply insightful views that everyone associated with the paper industry, in any capacity, should read. Here are a few insights.

The Pulp and Paper Times

Every industry is subject to various internal and external forces over a period of time. Pulp and paper industry is no exception. Some of these prominent forces are:

Market Forces

Market forces undoubtely have a very large influence. If we look historically, Indian paper industry, like many others at that time, enjoyed protection from imports due to high import duties. Demand was always higher than production, and therefore mills worked on a system of “allocation”. Gradually, import barriers have come down. This, combined with capacity expansion, has led to a situation of more supply than demand. As a result, the “allocation” mode is gone and industry players now compete for orders from customers. In the “allocation mode”, mills were producing to order, That is changing and will gradually almost completely transform into “made to stock”. This will need changes to internal production systems and require an ability to forecast demand.

We are now faced with a scenario where, we see declining demand for writing/printing grades globally (though thankfully not in India yet), resulting into machine stoppages. At the same time, India is entering into new free trade agreements, and we can therefore expect competition to become more fierce, not only among Indian paper industry players but also from overseas manufacturers.

Increased competition will exert greater pressure on margins, leading to further consolidation both globally and in India.

Technology

The other impinging force is changing technology. In the paper industry, while the basic Kraft process has remained largely same from late nineteenth century, the equipment and various other parameters like energy usage, recovery efficiency, and machine speeds have kept improving with  increasing production level. While this trend will continue analog systems are getting digitalised and, digitalization will become pervasive. On top of this layer will be added increased automation and AI. Since it is still an evolving field, it is difficult to predict as to what exact impact AI will have, but it will be enormous.

In addition, there will be technological advances to enable increased sustainability, lower carbon emissions, and lower resource utilization.

All these combined will make industry even more capital intensive than it already is thereby making small units less competitive and strengthening trend towards consolidation.
Technology will also play a large role in improving wood yields through genetic engineering and other methods, thus augmenting supply in line with rising paper demand.

Bio-refineries, nano-cellulose etc are some of the other interesting ideas being explored which may turn out to have a salutory impact.

Consumer Interest

User interest and shifting consumer tastes shape all industries and play a very crucial role. The demand for packaging paper will see a growing trend as the economy gets more formalised and consumers opt for higher level of convenience. Move away from fossil fuels will further boost use of paper. Rising climate awareness combined with fibre deficient nature of our country will propel the industry towards higher levels of recycling,

To sum up we are in for some interesting and challenging times. At the same time paper in its myriad forms has been at the core of human civilisation and will stay that way in times to come too.
 

Published at : Jul 10, 2026 08:19 AM (IST)

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