Paper & Tissue Show 2025: The Premier International Paper Exhibition Returns for Its 10th Edition
The Paper & Tissue Show 2025 is set to take place from January 21–23, 2025, at the Abu Dhabi National Exhibition Centre (ADNEC), bringing together 300+ exhibitors and 16,000+ visitors from over 120 countries. This milestone 10th edition is proudly sponsored by Saudi Paper Group, the event’s Main Sponsor, reinforcing the exhibition’s position as the leading global platform for the paper, tissue, and hygiene industries.
Abu Dhabi: A Global Hub for the Paper Industry
Strategically positioned as a global and regional hub for trade, Abu Dhabi plays a pivotal role in the international paper market. Its status as a key center for logistics, production, and market expansion makes it an ideal location for connecting industry leaders and innovators from around the world.
With its streamlined visa processes, exceptional flight connectivity from major cities worldwide, and ADNEC’s state-of-the-art facilities offering unparalleled infrastructure and services, Abu Dhabi provides an unmatched experience for exhibitors and visitors alike.
The event is proudly supported by the Abu Dhabi government, further reinforcing its importance as a platform for global collaboration and growth.
Exciting New Features
This year’s event introduces several key innovations:
• Expanded National Pavilions: Featuring Turkey, Italy, Germany, Egypt, China, and India, offering exhibitors a platform to showcase their expertise in a collaborative setting.
• Supermarket Zone: A unique addition where exhibitors can display their finished products in a dynamic, supermarket-style format, enabling direct engagement with buyers.
• The Hosted Buyer Program at Paper & Tissue Show 2025 will bring together over 250 influential buyers, including representatives from leading companies to engage with exhibitors and explore business opportunities. This exclusive initiative is designed to connect exhibitors with high-profile procurement teams and decision-makers from top global organizations.
• Hygiene Forward 2025: For the first time, the event will include Hygiene Forward, a dedicated conference and panel discussion series focusing on the hygiene and nonwoven sectors. Industry leaders will discuss innovations, challenges, and opportunities shaping the future of these dynamic sectors.
Diverse Product Categories
Exhibitors will showcase a comprehensive range of products, including paper jumbo rolls, hygiene and tissue products, packaging, nonwoven, chemicals, machinery, converting, spare parts,recycling and more, providing a 360-degree view of the industry.
MENA Pulp Week: A Key Highlight
Sponsored by G.A. Paper International, the MENA Pulp Week will kick off the exhibition on the first day with exclusive conferences and panel discussions. Industry experts will share insights into global pulp markets, sustainability trends, and innovations shaping the future of the sector.
A Message from AlFurat Group Chairman, Tarek Fakkas, Commenting on the upcoming edition, AlFurat Group Chairman Tarek Fakkas said: "The 10th edition is set to be the most diverse and well-attended in the history of the show. Contrary to the perception of being a regional event, statistics clearly show that the Paper & Tissue Show is a truly global exhibition. Over 75% of our visitors come from outside the UAE, and nearly 50% are from outside the MENA region, representing more than 120 countries worldwide."
He added: "With our marketing investments doubled this year, we’ve reached record-breaking online registration numbers, solidifying the show’s position as a leading global event."
Don’t miss the opportunity to be part of this landmark event. Register now to visit the Paper & Tissue Show 2025:
https://visit.paperoneshow.net/registration/
Moglix acquires Khatema Fibres for Rs. 80 crore to expand sustainable packaging portfolio
BENGALURU : Business-to-business (B2B) e-commerce unicorn Moglix has acquired Uttarakhand-based Khatema Fibres Ltd, a manufacturer of eco-friendly paper products, for approximately Rs. 80 crore, as part of its strategy to bolster its sustainable packaging portfolio and cement its leadership in the industrial procurement space.
The deal, announced by Moglix founder and CEO Rahul Garg, adds a suite of specialty packaging products—including high-strength kraft paper, food-grade packaging solutions, and machine-glazed papers—to its offerings.
Backed by Tiger Global and Accel, Moglix, valued at $2.6 billion, aims to tap its expansive network of over 10,000 manufacturers and 3,000 factories to scale this category.
The packaging industry
Moglix launched its packaging vertical nearly five years ago and claims to be the largest player in the B2B e-commerce packaging space. Garg highlighted the industry's disorganized nature and the outdated methods many suppliers still use.
“When we started our journey in packaging, we realized that the segment is fairly disorganized and many suppliers are still using old methods. As our company grows, we cannot only focus on e-commerce and supply chain, but also work with manufacturers to understand how innovation in packaging materials can be improved," Garg told Mint.
Khatema Fibres, founded in 1990, operates a paper manufacturing plant in Uttarakhand's Khatima region. While the plant's current capacity is 50,000 tonnes, it has the potential to expand to 75,000 tonnes—a goal Moglix is actively pursuing, according to Garg.
The acquisition comes amid a global shift from plastic to recyclable, plant-based materials in packaging, spurred by heightened environmental awareness. The Indian food and beverage packaging industry alone is expected to reach $86 billion by 2029, growing at 14.8% annually, according to Invest India.
A 2023 McKinsey survey revealed that most respondents were willing to pay a premium for sustainable packaging, with heightened concerns about air and water pollution in India, China, and Brazil.
Khatema Fibres’ advantage lies in its ability to produce packaging papers from long fibre (softwood fibre), typically unavailable in tropical climates like Asia. The company uses pre-consumed waste from converting units in the US and Europe, treating it through specialized processes to recover pure fibers while segregating contaminants
Packaging is already among Moglix's top 10 categories and has immense potential for growth, Garg noted. “I believe it could become a Rs. 1,000 crore category in the next few years—it’s already nearing ₹500 crore."
Financial performance and expansion plans
Founded in 2015 by Garg, a former Google executive, Moglix has raised over $370 million to date. In FY24, its revenue rose marginally to ₹4,964 crore from ₹4,704 crore the previous year, while losses eased to ₹189 crore.
“FY24 was an interesting year because much like other companies, we too were working towards striking the balance between growth and profitability. Every three to four years it is crucial to slow down a bit on growth and figure out how to optimize," Garg said.
The company ramped up its use of technology during the year, automating customer service and internal operations to improve efficiency—a move Garg believes will yield long-term benefits.
Looking ahead, Moglix is focused on sustainable growth. “B2B is still a decade behind the B2C curve.
There is so much headroom in terms of executing, changing the market, and changing the behaviour that needs to happen and we will continue to double down. Outside of that, we are present in India and the Middle East. So we continue to focus on taking dominant positions in these markets as well as continuing to expand Credlix, our supply chain finance offering," Garg said.
In September, Moglix committed $50 million to expand Credlix into the US and Mexico. The subsidiary offers collateral-free financing solutions designed to enhance cash flow, reduce financial burdens, and support small and medium enterprises in scaling their operations. Source: livemint.com
Low-cost imports shake India’s white-grade paper industry; a slight drop in demand for Kraft paper is anticipated, says IRPTA
-Current rates of corrugated/kraft waste paper in Western U.P. and the North India market are Rs.18,500/PMT to Rs.19,500/PMT. The all-India market average price in this category is Rs.18,000/PMT to Rs.19,500/PMT
-30% to 40% of the market share for white-grade paper in India has been captured by foreign paper mills.
-Since the beginning of 2024, the price of premium white-grade waste paper has dropped from Rs.54 per kilogram to Rs.34 per kilogram
The Pulp and Paper Times
India’s domestic white-grade paper industry is under pressure due to an influx of low-cost imports from countries like China and Indonesia. These imported products, offering high brightness and quality, are priced significantly lower than domestically produced paper, creating a tough competitive environment.
Despite having government orders, many white grade paper mills are struggling due to a downturn. If the situation persists, a rate correction in both finished paper and waste paper in this grade may be expected.
Talking to The Pulp and Paper Times, Mr. Naresh Singhal, president of The Indian Recovered Paper Traders Association (IRPTA) said, “Imported paper is adversely impacting the demand for WPP, copier, specialty paper, and SBS in India. Paper mills from China, Indonesia, and other countries are dumping their products in India at very low prices. According to dealers, paper with 92% to 95% brightness, made from softwood or hardwood, is entering India at a landing price of $650 per ton, causing significant challenges for ‘A’ grade paper mills. These mills are struggling to match the prices of imported paper,”
Mr. Singhal stated firmly that 30% to 40% of the market share for white-grade paper in India has been captured by foreign paper mills. These mills are highly automated and save significantly on labor and energy costs due to their large-scale production, enabling them to compete strongly with Indian paper mills.
“Many recycled-grade paper mills producing white-grade paper have been altering their product mix to secure market orders. The demand for copier paper made from recycled material has drastically plummeted,” he added. "Some paper mills in Gujarat have shut down their production due to the unfavorable pricing dynamics in the market. If dealers or traders can import wood-grade paper with 90% brightness at a cheap price, why would they purchase C-grade material made from recycled paper?"
There has been a severe reduction in orders for white-grade paper, with 40% of the market captured by imports and the rest being contested by pulp-based or agro-based paper mills.
Mr. Singhal also highlighted that since the beginning of 2024, the price of premium white-grade waste paper has dropped from Rs.54 per kilogram to Rs.34 per kilogram. The situation has become so dire that bagasse- and agro-waste-based paper mills are now selling pulp with 85% brightness to smaller paper mills instead of producing paper themselves.
Kraft Paper Scenario
According to Mr. Singhal, Delhi NCR has crossed dangerous pollution levels over the past week, prompting the implementation of GRAP (Graded Response Action Plan) Stage 4 regulations three days ago. Due to these restrictions, the entry of heavy vehicles into Delhi has been halted, affecting the transportation of non-essential goods in the city. This has led to a shortage of trucks for transporting scrap paper, disrupting its supply. As a result, the rates of Kraft waste paper in Western Uttar Pradesh's Kraft paper mills have seen some fluctuations.
Current rates of corrugated/kraft waste paper in Western U.P. and the North India market are Rs.18,500/PMT to Rs.19,500/PMT. The all-India market average price in this category is Rs.18,000/PMT to Rs.19,500/PMT
In the past week, Delhi NCR has also experienced fog, mist, and colder weather, signaling the start of the winter season. On November 19, 2024, the minimum temperature dropped to 12°C. If the cold weather continues, scrap paper collection could be impacted. However, due to the wedding season, demand for craft paper has remained stable. After December 10, a slight drop in demand for craft paper is anticipated.
As is the case every month, there is a likelihood of a production halt in Uttar Pradesh's Kraft paper mills between November 28 and December 2.
Declining realizations impacted the financial performance of Satia Industries in Q2, with a focus on ongoing strategic initiatives
- Satia Industries reported a steady volume of 1,05,840 MT for H1FY25, growing 2% YoY.
- SIL's revenue contracted 9% YoY to INR 3,401 Mn during Q2FY25 as compared to INR 3,734 Mn during Q2FY24 on account of higher imports
The Pulp and Paper Times | Punjab, 13 November 2024:
Satia Industries Limited (SIL) one of the leading wood and agro-based paper manufacturer in India, announced its results for the second quarter ended September 30, 2024.
Reflecting the broader industry trend and demand, the company's revenue contracted 9% YoY to INR 3,401 Mn during Q2FY25 as compared to INR 3,734 Mn during Q2FY24 on account of higher imports. For H1FY25, revenues were INR 7,395 Mn.
Due to the lower realisations and relatively higher raw material prices, gross margins of SIL declined from 58.2% in Q2FY24 to 52.1% in Q2FY25. Gross margins for H1FY25 were 55.9%. Net profit stood at INR 123 Mn in Q2FY25, vs INR 479 Mn in Q2FY24 and INR 511 Mn in Q1FY25. For H1FY25, Net profit was INR 634 Mn.
Commenting on the financial results, Executive Director Mr. Chirag Satia, said: “The Indian paper industry continues to be shaped by contrasting dynamics. On one hand, India remains the fastest-growing paper market globally, with overall demand increasing at an annual rate of 6-7%, driven particularly by the packaging paper and paperboard segment expanding at 8.2% annually. On the other hand, the industry is navigating short-term challenges, including an increase in imports from China and ASEAN countries, contributing to pricing pressures in the domestic market.
Amidst this environment, Satia Industries Limited demonstrated resilience, maintaining steady volumes of 52,192 MT, supported by our strong partnerships with state textbook boards. While declining realizations impacted financial performance, our disciplined focus on cost control and operational efficiencies helped mitigate some of the pressures. We remain committed to strengthening our financial position through ongoing strategic initiatives, such as the renovation of PM3 and the installation of a Soda Recovery Boiler, which will enhance capacity and operational excellence.
Leveraging our strong industry presence and customer relationships, we are confident in navigating these market dynamics while striving to deliver growth and value to our shareholders.”
Satia Industries Limited (SIL), is one of the largest Wood and Agro-based paper manufacturer in India. SIL was incorporated by Dr Ajay Satia in 1980 and commenced its operations in 1984 with a small capacity of 4,950 tonne per year. It surprisingly overtook many of its peers in production achieve, to 2,13,804 MT in FY24 implying a capacity utilization of ~98%. SIL has successfully commissioned their PM 4 and has augmented its total installed capacity to 219,000 MTPA.
Mondi invests €1.2 billion in organic growth projects, Acquisitions continue to be a key part of investment strategy
- Geopolitical uncertainties remain high and that it is going to be another challenging year ( 2024) for the world economy.
- Making good progress on our €1.2 billion of approved investments in organic growth projects, which remain on track and on budget
The Pulp and Paper Times
Mondi is market leaders organised across three business units: Corrugated Packaging, Flexible Packaging and Uncoated Fine Paper. Mondi’s 22,000 people work across 100 production sites in more than 30 countries, with key operations in Europe, North America and Africa. We are the leading virgin containerboard producer in Europe and the largest containerboard producer in emerging Europe. Our virgin containerboard is a high-quality product with excellent properties for specialised end-use applications, ideal to meet our customers' needs around the globe. As a global leader in the production of kraft paper and paper bags, our well-invested mills produce high-quality kraft paper that is converted into strong, lightweight paper-based packaging. Mondi Uncoated Fine Paper business produces a wide range of home, office, converting and professional printing papers at our mills in central Europe and South Africa.
“Mondi delivered a resilient performance against the backdrop of an uncertain global economic environment. We remain well positioned to capitalise on the expected future growth in the packaging markets we serve, supported by our leading market positions, compelling sustainable product portfolio and through-cycle investment in the business” stated by Mr Andrew King, Group CEO, Mondi in the annual report for FY 23.
Mondi delivered underlying EBITDA of €1,201 million in the year (2022: €1,848 million). Group revenue was down on lower selling prices and sales volumes as a result of softer market demand and the impact of customer destocking, which abated over the course of the year.
Corrugated Packaging delivered underlying EBITDA of €310 million in the year, down 53% on the prior year (2022: €662 million). Underlying EBITDA margin was lower at 13.6% as a result of selling prices declining more than input costs. Containerboard sales volumes were broadly stable despite the backdrop of softer market demand, while in Corrugated Solutions, good margin management supported a stable year on year financial performance.
Flexible Packaging's underlying EBITDA was €637 million, 20% lower than the previous year (2022: €797 million), mainly as a result of lower sales volumes. Underlying EBITDA margin was 16.5%. Although profitability was lower than the very strong performance in 2022, the business showed resilience due to its high level of integration across the kraft paper and paper bag value chain together with its exposure to consumer-focused markets.
Uncoated Fine Paper delivered underlying EBITDA of €289 million in the year, down 32% (2022: €427 million) largely due to lower selling prices. Underlying EBITDA margin was 22.4%. Our geographic and product diversification supported our performance with higher uncoated fine paper and pulp sales volumes in South Africa mitigating lower European volumes.
On 2024 outlook, Mr. Philip Yea, Chair, Mondi Group stated the As we enter 2024, it is clear that geopolitical uncertainties remain high and that it is going to be another challenging year for the world economy. However, I am confident that Mondi has the resilience to navigate these challenges. We intend to push through the tough macroeconomic environment relying on our scale, quality asset base, integrated operations and excellent customer proposition.
“As part of our capacity expansion pipeline, we are making excellent progress on the project to install our new kraft paper machine at Štětí (Czech Republic) to increase our kraft paper capacity and are on track to commence operations in 2025. Our two containerboard debottlenecking projects in Kuopio (Finland) and Świecie (Poland) will be contributing additional capacity from 2024” Mr Philip Yea stated.
Mr Yea said, “Acquisitions continue to be a key part of our investment strategy. Opportunities are rigorously assessed in terms of both financial metrics and strategic fit, with a focus on those opportunities that complement our existing footprint and capabilities. An important new opportunity for us comes through the acquisition of the Hinton Pulp mill in Alberta (Canada) in early 2024 which is now part of our Flexible Packaging business unit. After the intended investment in a new kraft paper machine, Hinton will be capable of producing low-cost, high-quality kraft paper for industrial and eCommerce bags, and fully integrate our North American paper bag operations, strengthening our competitive advantage and providing our customers with security of supply”
On the capital Investment front, Mr Andrew informed that we are making good progress on our €1.2 billion of approved investments in organic growth projects, which remain on track and on budget. These projects are diversified across our value chain, products and geographic reach and comprise €0.6 billion of investments in Corrugated Packaging and €0.6 billion of investments in Flexible Packaging. By the end of 2024, we expect to have invested around 80% of the approved amount. We expect these projects to deliver a meaningful EBITDA contribution from 2025.
“In Corrugated Packaging, most of these projects are at, or close to, start up including investments at our Kuopio mill (Finland), Świecie mill (Poland) and Polish corrugated solutions plants. Our Duino mill (Italy) is expected to start up in 2025 as planned. In Flexible Packaging, we continue to make progress on our pipeline, with most projects, including the new paper machine at Štětí (Czech Republic), expected to ramp up from 2025. We expect our projects to take two to three years to achieve full production following their commissioning, delivering midteen returns through-cycle when fully operational,” he stated.
Mr Andrew added that over the past five years in our continuing operations, total capital expenditure and acquisitions have exceeded depreciation and disposals by €1.2 billion. Over this period, capital expenditure as a percentage of depreciation was 163%, with our organic growth capital expenditure and all acquisitions focused on the Group’s packaging businesses. Acquisitions continue to be a key part of our investment strategy. Opportunities are rigorously assessed in terms of both financial metrics and strategic fit, with a focus on those opportunities that complement our existing footprint and capabilities.
Regarding pulp supply, key international markets benefited from increased availability of short fiber resulting from new entrants in the sector, says Suzano CEO
-Suzano to start most competitive and advanced pulp plant site in 2024 at Ribas do Rio Pardo
-Suzano's Annual Report highlights 2023 Pulp Market Challenges and Cost Reductions Suzano, the largest eucalyptus pulp manufacturer in the world, one of the largest paper producers in Latin America, the leader in the toilet paper market in Brazil and a benchmark in bioproducts through the development of sustainable and innovative solutions from renewable sources.
The Pulp and Paper Times:
“In 2023, Suzano faced a challenging pulp market as a result of price volatility and lower volumes. Conversely, we also executed a record investment of R$18.2 billion in our growth and modernization projects, adding up to R$51.2 billion since 2019, when we carried out the merger that created Suzano S.A. And this has only been possible thanks to a strong balance between our financial discipline and capital allocation focused on the company’s strategy, which has gradually led us to generate and share value with our stakeholders”, The annual report of Suzano for FY 2023 stated.
Pulp is the basis of our business. In 2023, it accounted for 77% of Suzano net revenue, with 93% of its total pulp sales being to international markets. Our other business segments accounted for 23% of our net revenue, which totaled R$39.8 billion in the year. Suzano’s pulp sales totaled 10.2 million tonnes, a 3.6% decrease compared to 2022.
Mr. Walter Schalka Chief Executive Officer, Suzano said that in 2023, we faced a challenging pulp market, affected by a drop in price, especially in the first half of the year. Conversely, we experienced a drop in cash costs throughout the year, primarily as a result of lower input consumption and prices. Regarding pulp supply, key international markets benefited from increased availability of short fiber resulting from new entrants in the sector.
“It is clear to us that we must not hold ourselves back in our pursuit of new business models, productivity and efficiency. We also must have an impact on society. The combination of innovation with sustainability, two elements that make up our DNA, enables us to develop biosolutions for a society that is undergoing a transformation” he said.
Mr. Walter informed, We made progress in the construction of the Cerrado Project, in Ribas do Rio Pardo, which remains on schedule to start operations in 2024. This will be our most competitive pulp plant and our most advanced site from a social and environmental perspective, enabling us to maintain our relevance in pulp. And to be best-in-class in terms of cost, we accelerated our efforts at an average rate of 1.2 million eucalyptus seedlings planted per day.
“We were also successful in making progress across our value chain with the completion of the purchase of Kimberly-Clark’s tissue business in Brazil. We incorporated the Neve® brand and announced the construction of a new tissue plant in Aracruz.” He stated.
The report stated about expansion plan, In 2023, Suzano purchased Kimberly-Clark’s tissue business in Brazil, an important move to strengthen our Consumer Goods unit. The acquisition included a plant located in Mogi das Cruzes, with an installed capacity of approximately 130,000 tonnes per year, which increased our production capacity of toilet paper, reusable cloths, napkins and facial tissues. The addition of the Neve® and Grand Hotel® brands to our brand portfolio makes us the Brazilian market leader in the toilet paper segment, bringing us closer to end consumers. Other global brands sold by Kimberly-Clark in Brazil, such as Kleenex® and Scott®, as well as the K-C Professional line, were licensed to be used by Suzano for a fixed term.
“We are poised to take a leap forward in the supply of our Eucafluff®, with a new line in Limeira, and advance initiatives to replace fossilbased materials with products” Mr Walter stated.
NEW TISSUE PLANT
Suzano announced an investment of R$650 million in the construction of a new tissue paper plant in the town of Aracruz, which will increase our production capacity by 60,000 tonnes. This move will also increase our competitiveness in the southeast region of Brazil, our largest consumer market in the country. We see enormous potential for growth in the tissue segment in Brazil. According to the consulting firm Fastmarkets RISI, per capita consumption of tissue is still low in Brazil compared to other countries. In 2021, the country had an annual per capita consumption of 6.3 kg of tissue, while the United States had 26 kg, Chile 14.5 kg and Mexico 9.7 kg.
Bio-OIL
Suzano is also making progress in the development of bio-oil from eucalyptus biomass (organic matter). We have been engaging in discussions to form partnerships with major players in the oil value chain, and have acquired a stake in the American company Ensyn Corporation, which invests in the production of renewable fuels. Our plans include the construction of the first bio-oil industrial site, in addition to more investments in research to diversify bio-oil applications and ensure the effectiveness of new technologies.
CHALLENGES IN WOOD SUPPLY
The Report stated about wood market, We monitor global demands, including the use of pulp as biomass for energy, in construction and in green steel, new pulp projects, and the growth of the wood-based textile fiber market. According to the Food and Agriculture Organization (FAO), while wood consumption has increased by 28% in recent years, wood sources have reduced by 4%. Supply is directly impacted by climate change (extreme weather events, fires, pests and diseases), trade restrictions and restrictions on new farms. In Brazil, the area occupied by cultivated eucalyptus has not kept up with the growing demand for biomass. However, we are working to increase productivity in the coming years and reduce both the distance between our farms and plants and our dependence on third-party wood. Increasing productivity involves the continuous introduction of new genetic material, the relocation of our forest base according to climate research and productive potential, a combination of clone allocation with environmental mapping, and best practices in forestry according to micro-regional characteristics (precision forestry).
Suzano Ventures
In 2023, Suzano made two investments through its corporate venture capital fund, Suzano Ventures. The first investment was in Allotrope Energy, a UK-based startup working on the development of lithium-carbon batteries made from biomaterials. The technology developed by the startup enables the production of lithium-ion batteries and capacitors that are more sustainable, perform better and provide an ultra-fast charging alternative. The partnership includes an investment of up to US$6.7 million from Suzano Ventures to finance the production of lithium-carbon batteries using carbon extracted from lignin, a widely available biomaterial resulting from our pulp production process. In addition to financial support and the supply of biomaterials, we are making our teams in Brazil, Canada and Israel available to support this innovation and the commercialization of the new technology, as well as the development of a global supply chain to manufacture the new batteries.
JK Paper to receive a 400 ADMT/d BCTMP and Evaporator lines from Valmet, set for operation by end of 2025
New BCTMP line will manufacture high-quality BCTMP pulp for lightweight coated board production. The start-up is scheduled for the end of 2025
The Pulp and Paper Times
Valmet is to supply a new bleached chemi-thermomechanical pulp (BCTMP) line and a related evaporator line to JK Paper Limited’s Fort Songadh mill in India. The new BCTMP line will manufacture high-quality BCTMP pulp for lightweight coated board production. The start-up is scheduled for the end of 2025.
The order was included in Valmet's orders received of the second quarter 2024. The value of the order will not be disclosed.
“The new BCTMP and evaporator line will play a crucial role in our production process, enabling us to meet increasing market demands while adhering to the highest quality and environmental responsibility standards. Valmet’s unique high-temperature (HT) BCTMP technology will allow us to achieve superior pulp quality and energy efficiency, ensuring that we remain competitive in the global marketplace,” says A.S. Mehta, President, JK Paper Limited.
“The BCTMP order from JK Paper marks a significant continuation of our cooperation. We are privileged that Valmet has been chosen to contribute to their ongoing success. Our advanced HT-BCTMP and evaporator line technologies will enhance their production capabilities and support their efforts to minimize environmental impact through energy-efficient and resource-saving solutions,” says Fredrik Willgottson, Vice President, Pulp & Energy, Asia Pacific, Valmet.
Technical details about the delivery
The 400 ADMT/d BCTMP line is based on Valmet’s HT-BCTMP technology for optimized impregnation, producing pulp with high bulk and low shive content at minimum energy consumption. The line will include all main process technology for chip washing, pre-steaming, PREX impregnation, HC refining, MC bleaching, HC bleaching, LC refining, screening, reject refining, steam separation, heat recovery, and pulp washing.
The delivery includes a Mechanical Vapor Recompression (MVR) tube evaporator plant for handling the BCTMP plant liquor. It covers MVR evaporator effects, a tube concentrator, and a condensate treatment plant. The evaporator line includes Valmet's patented Internal Condensate Treatment for producing cleaner condensate for recycling in the mill. The new line will have a design capacity of 180 tons of water per hour.
JK Paper Limited, an integrated pulp and paper plant, was established in 1962. The company is a leading Indian producer of office papers, coated papers, writing and printing papers, and high-end packaging boards. The company has three integrated Pulp and Paper Mills: Unit JKPM at Rayagada (Odisha), Unit CPM at Songadh (Gujarat), and Unit SPM at Kagaznagar, Telangana. The company’s installed capacity is around 800,000 tonnes per annum.
Paper Market Analysis: It could take another year for the demand-supply gap to narrow due to a global increase in supply across all segments
-Most Paper mills will look to raise rates to cope with cost pressures and to maintain profitability in line with the past two years
-Innovation, Technological Adaptability, System-Driven Processes, and Swift Decision-Making: The Success Mantra for Navigating Paper Market Volatility
-FY 25 is expected to be challenging for the Paper Industry due to the continuous increase in worldwide production capacity and ongoing global uncertainties
The article below is written by Mr. Ankit Bandi, Director of Jayant Marketing Pvt Ltd in Indore, a company with a legacy in paper trading since 1968. The views are personal.
The Pulp and Paper Times:
The steady growth in the Packaging and Education sector presents a significant opportunity for the Paper Industry. Currently, the industry produces approximately 25 million tonnes of paper, with an estimated market value of ₹80,000 crore. The Industry is expanding at an approximate rate of 6.8% annually.
Despite these promising figures, FY 25 is expected to be challenging for the Paper Industry due to the continuous increase in worldwide production capacity and ongoing global uncertainties. Mills may face difficulties in maintaining their EBITDA.
Most mills will look to raise rates to cope with cost pressures and to maintain profitability in line with the past two years. However, this may not materialize as expected due to a global increase in supply across all segments, which has yet to be matched by demand. It could take another year for the demand-supply gap to narrow down. On the bright side, stabilizing shipping and pulp rates offer some relief. The introduction of new shipping routes due to the Red Sea crisis has resolved congestion and container availability to a great extent and softened the elevated ocean freight. Hardwood pulp rates, which have recently fallen to USD 600, are expected to reach approx USD 550 in the coming 20-30 days. The new pulp mill by Suzano in Brazil, which started production in July, will further increase the supply of hardwood pulp, benefiting the industry in the near future.
Expected scenario for the paper and packaging industry in the coming days, based on current trends and projections:
Writing and Printing Segment: Demand is anticipated to remain weak for the next two months, making it a good period for end-users having handsome volume for getting better deals to combat inventory cost and will in turn help manufacturers to cover up the shortfall. Also in this period good volumetric Government tenders can help Mills to overcome present market challenges. Demand for publishing and notebooks should rise after Diwali, and we may see actual price hikes only after that.. In the Copier segment, the competitive pressure from International Players will continue to affect domestic mill prices. Due to the lower demand in the WPP segment, mills are likely to shift focus to increasing copier production, intensifying market competition.
Packaging Paper and Board - Virgin based packaging board market is growing at a good rate of 10% approx. This segment is expected to remain stable until the festive season, but a decline in FBB prices may follow as International Players are dumping their board in India at very low rates.
The Recycled based duplex market is growing at a rate of 7.2% approx. but the rates will remain stable due to expansion of capacities domestically and internationally which will heighten competition in the category and will also reduce the export opportunities
Kraft Paper demand is growing steadily at 11%, but the continuous rise in production and stable recycled pulp prices should keep Kraft prices stable for the next 3-4 months. A Strong government willingness for implementation of an effective Ban on single use plastic is desired. This will definitely be a big boost to the industry and towards sustainability.
Tissue - With growing awareness about hygiene, the Tissue industry is poised for remarkable growth, projected at 14%. Many mills have an eye on this growth rate and have announced their expansion plan in this sector. With this particular product which affects the hygiene industry more innovation regarding usage of this product is expected
Overall Industry Insights:
● Strategic Opportunities: The current market conditions offer opportunities for strategic sourcing and negotiating better deals, especially in segments with weak demand.
● Price Dynamics: Price stability and potential declines in certain segments are influenced by competition, capacity expansion, and international market pressures.
● Sustainability: The push for sustainable practices and regulatory changes, such as the ban on single-use plastics, could significantly impact various segments, providing growth opportunities for eco-friendly products.
For FY25, a key success strategy for all stakeholders in the paper industry could be to focus on efficient stock rotation. Success in this volatile market will likely go to those who are innovative, adaptable to technology, and swift in their decision-making.
Here are two essential components to navigate the competitive landscape:
1.Efficient Stock Rotation and High-Margin Products: Continuously rotating stock at favorable rates and incorporating at least one high-margin product in the portfolio, can help offset the volatility in prices of regular products. This approach will help everyone in the channel to maintain profitability despite fluctuations and uncertainties in the market.
2.Emphasizing on Technology, Systems and Analytics: To stay ahead in this competitive environment, it's crucial to invest in advanced systems and technology. Embracing digital tools and innovative solutions will help in analyzing data, streamline operations, enhance efficiency, and improve decision-making processes. Leveraging on technology and Systems effectively can provide a significant edge specially to paper traders in adapting swiftly to market changes and capitalize on emerging opportunities.
By integrating these strategies Paper Traders can better manage risks, optimize their operations, and position themselves for success in FY25 and beyond.
About the Company
Ankit Bandi is the Director of Jayant Marketing Pvt Ltd in Indore, a company that has ventured in a legacy of paper trading since 1968. The third-generation members of the family-run business have preserved the core values that have guided the company for decades while also driving its growth through a forward-thinking, systematic approach. Their enthusiasm and strategic vision have led to the expansion of the company’s portfolio from traditional writing and printing paper to new ventures in Tissue and Packaging Board. Company has state of the art warehousing facilities which resulted in effective inventory management. Jayant Marketing Pvt Ltd has made a significant stride with the establishment of its branch in Bhopal and attracted a fresh customer base. The effective system driven approach and expanding reach resulted in significant increase of its top line, reflecting a commitment to innovation and growth.
MEA paper & pulp industry poised to cross over USD 20 billion on the back of big packaging push
-E-commerce boom and rising consumer demand for healthy packaging to push paper packaging to over USD 12 billion in GCC by 2032 at a CAGR of 3.8 per cent.
The Pulp and Paper Times | Dubai, September 17, 2024:
The Middle East and Africa (MEA) paper and pulp industry is on a growth surge, poised to cross over USD 20 billion in the next six to seven years, with GCC countries led by Saudi Arabia and the UAE at the forefront of a demand upswing for paper packaging products fuelling the rise, industry experts said today quoting independent market reports.
In a statement at the opening of the leading paper industry exhibition in Dubai, Propaper Dubai 2024 organised by Verifair, industry experts said that the growth was catalysed by the increasing consumer appetite for healthy, hygienic environment-friendly and sustainable packaging products.
“For paper industry, being sustainable across the value chain of procurement, production as well as logistics and supply chain is no more an option, but an imperative. While the efficiency parameters of sustainability are many, including energy saving, potential to recycle, and lower carbon footprints, what drives the transformation of being nature friendly is being entirely inspired by the position taken by the community and aware customers,” said Salahuddin Sharafi, Chairman of MAHY Khoory Group (which owns Al Dhafra Paper Manufacturing Company and Union Paper Mills)
Paper packaging cornerstone of growth
According to the thinktank, imarc Group, paper packaging has been a cornerstone for growth in the recent times with the GCC paper packaging market size touching USD9.1 billion in 2023, and is poised to grow to USD12.8 billion by 2032 at a CAGR of 3.8 per cent.
Food packaging is a major segment in the paper packaging verticals, followed by pharma, beauty and cosmetics. Post-Covid, demand for paper packaging solutions have been on a consistent upward trajectory, particularly on the backdrop of rising food packaging needs. According to Global Data, The MEA food market size was $277.9 billion in 2023 and will grow at a CAGR of more than 3% during 2023-2028, increasing the prospects of paper packaging solutions.
Increasing consumer sensitivity to hygiene is also fuelling growth in the tissue sector in the MEA region. In the UAE alone, market for tissue & hygiene paper is expected to grow by 1.94 per cent between 2024-2029 from the current USD525 million, as per Statista. Despite income disparities and conflicts in the region, growth in the tissue and hygiene vertical is bound to grow with MEA being one of the fastest growing regions. The growth will also drive on the rising population with the World Economic Forum (WEF) estimating that MEA will be home to around 3.4 billion people by 2050.
Innovate for sustainability
The paper industry has been on an eco-friendly innovation journey with consumer appetite shifting to recyclable paper products. The transformation is across design, production and personalised solutions, to mention a few, said Jeen Joshua, Managing Director of Verifair.
“Despite the challenges of raw materials and supply chain shocks from regional uncertainties, the demand for paper products and solutions have stayed strong with growth in existing markets, as well as opening up of new markets, particularly in the African Continent, which is urbanising fast and have a majority of young demographic much like in the GCC,” he said.
Sustainability is becoming a core focus, with investments in eco-friendly practices and products driven by consumer preferences and regulations. Technological innovations are leading to new uses for wood components, including in textiles, altering traditional industry operations, he added.
Circular economy initiatives are also keeping pace with the overall growth with the MEA recycled paper market poised to touch USD635.9 million by 2028, growing at CAGR of 2.21 per cent, according to Business Market Insights.
PaperTech 2024: Chairman Ganesh Bhadti Emphasizes Paper Industry's Transition to Low-Carbon Economy, Notes 20% Emission Reduction
-CII PaperTech: Annual Conference Focused on Elevating the Indian Pulp & Paper Sector to World-class Standards
The Pulp and Paper Times
Hyderabad, India — The 18th edition of CII PaperTech, a premier conference dedicated to advancing the Indian pulp and paper industry, held on 10th & 11th September 2024 at the Hyderabad International Convention Centre (HICC). This year’s conference, themed "Make Indian Pulp & Paper Industry World Class," brings together industry leaders, innovators, and stakeholders to discuss strategies for elevating the sector to international standards.
Mr. Ganesh Bhadti, Chairman of PaperTech 2024 and Director-Operations at Seshasayee Paper and Boards Limited, delivered the welcome remarks and theme address. “The paper industry is witnessing an unprecedented shift in magnitude and importance as we move away from fossil based products and towards a low-carbon economy,” said Mr. Bhadti. “The Indian paper and board industry has successfully reduced emissions by over 20% in the last decade, showcasing its commitment to greener production methods.”
Mr. Pawan Agarwal, President of the Indian Paper Manufacturers Association (IPMA) and Managing Director of Naini Papers Ltd., said, “The plantation-based paper industry holds immense potential, with the ability to grow plants within 4-5 years.” “With such a sustainable approach, the future of the paper industry looks brighter than ever.”
Mr. SVR Krishnan, Vice-President of the Indian Paper Manufacturers Association (IPPTA) and Executive Director of Khanna Paper Mills Ltd., discussed the latest trends in paper production technologies and their impact on operational efficiency. “As Industry 4.0 transforms manufacturing, we now have the tools to seamlessly automate process flows, allowing us to be more agile and responsive,” said Mr. Krishan.
Mr. Rahul Khanna, President of the Indian Newsprint Manufacturers Association (INMA) and Managing Director of Khanna Paper Mills Limited, discussed the challenges and advancements in newsprint production, and the strategic approaches needed to address these issues. “Absorbing the fresh ideas from budding professionals is key, as they transition to become the leaders of tomorrow,” said Mr. Khanna.
In addition to insightful discussions and keynote addresses, PaperTech 2024 featured the release of the “Best Practices Manual in the Paper Sector- Volume 12,” showcasing advancements and innovations within the industry. The conference also honored Dr. ARK Rao with a Distinguished Personality award, recognizing his outstanding contributions to the pulp and paper sector.
The PaperTech 2024 is being organized in tandem with the 23rd CII Energy Efficiency Summit. The event will be followed by the 25th CII National Energy Awards for Excellence in Energy Management where the top paper manufacturing units in India will present & showcase their technical & managerial expertise in energy efficiency and energy management.
Low-priced Chinese supplies dip ITC-PSPD’s Q1 FY25 revenue by 6.8%. Green shoots of recovery in domestic demand are ahead of the festive season
- Muted demand from the construction industry
- ITC-PSPD earned INR 261 Cr, declined by 44.7%
The Pulp and Paper Times:
ITC's Paperboards and Specialty Papers Division (ITC-PSPD) has disclosed its financial results for the first quarter of FY25, revealing a 6.8% year-on-year decline in revenue, totaling INR 1977 Crore. The company attributes this downturn to low-priced Chinese supplies in global markets including India, muted domestic demand, unprecedented increase in domestic wood costs.
In its submission to the Securities and Exchange Board of India (SEBI), the company highlighted the subdued global demand and a slowdown in domestic demand. Subdued realisations, surge in domestic wood prices and ocean freight continues to impact margins.
The report stated that structural advantages of the integrated business model, Industry 4.0 initiatives, strategic investments in High Pressure Recovery Boiler and proactive capacity augmentation in Value Added Paperboards aided in partly mitigating pressure on margins.
The submission informed that certain capacity augmentation/debottlenecking projects were successfully completed during the quarter; Segment performance includes the impact of such planned shutdown/stabilisation related costs pertaining to these initiatives.
Strong growth witnessed in speciality paper segment aided by recent capacity addition in Décor Paper, despite muted demand from the construction industry. Green shoots of recovery in domestic demand were visible ahead of the festive season; Value Added Paperboard (VAP) grades witnessed sequential improvement in net realisation rates.
The Packaging and Printing Business continues to focus on accelerating new business development in domestic and export markets offering innovative and customised solutions. The recent capacity addition at Nadiad, Gujarat, with state-of-the-art equipment, has further augmented the Business’ capabilities in Cartons packaging. During the quarter, Business launched Ecobyte, a quality sustainable packaging solution for eco-conscious households which offers germ-free and grease-resistant packaging.
ITC-PSPD continued its sharp focus on portfolio augmentation, export customer/market development and structural cost management to mitigate near term challenges.
Chadha Papers: Surge in new capacities drives shift from 18 BF paper to cup stock and bleached craft
-Setting up a New Coating Line to produce Thermal, C1S and Cupstock paper
Exploring the dynamics of Chadha Papers: a candid interview on overcoming challenges, embracing innovation, and navigating the evolving paper industry. gain insights into the resilient journey of Chadha Papers, from its inception in 1991 to adapting to market fluctuations, shifting production focus, and spearheading eco-friendly practices. Join us as we delve into the visionary strategies, market perspectives, and future outlook with Mr. Amanbir Singh Sethi, Director, Chadha Papers Ltd. , the driving force behind Chadha Papers
The Pulp and Paper Times
Q: Give us a small introduction to your Chadha Papers.
Chadha Papers commenced production in 1991 but faced discontinuation in 2004 or 2008 due to family issues. In 2013, ownership transitioned within the family, and since then, I have been overseeing its operations. We specialize in manufacturing writing, printing, and craft grades, namely absorbent. Additionally, we've ventured into craft paper bags over the past 1-2 years. We are established suppliers in writing and printing to various government establishments, numerous states in India, and, of course, the market.
Q: In recent times, there have been ups and downs in imported waste paper prices. How did you manage those fluctuations successfully?
It was undoubtedly challenging. When the price of craft paper suddenly dropped by about $200-$300 within 2-3 months, it posed the toughest period for us, resulting in significant financial losses. Despite this, our partners and suppliers stood by us. By adapting to new rates and introducing new materials, we adopted an aggressive stance in the market, overcoming the challenges. The COVID period was particularly tough for writing and printing, but post-COVID, the segment has stabilized, aiding our recovery.
Q: Overcapacity has emerged in the market, impacting existing paper mills' production capacity. Do you believe overcapacity poses a threat to new expansion?
Absolutely, 101%. The influx of new capacities in the market raises concerns. We have already transitioned from 18 BF paper and are actively shifting our capacities to other products like cup stocks and bleached craft. Our focus on paper bags in North India has proven successful. Additionally, we are enhancing our writing and printing grades.
Q: Many paper mills are expanding their portfolios into different segments to mitigate competition. Is there any work being done in this area?
Certainly, we are constantly striving for value addition. Our efforts include venturing into cup stock, bleached craft, and producing C-grade absorbent. We are also investing in new machinery to recycle various raw materials and adopting eco-friendly practices. Setting up new coating lines for value-added products like thermal paper, C1S, sublimation paper, and biodegradable cup stock coating is part of our innovation strategy.
I think that is the future because PE is in a position to be banned at any time. We have already heard about it in a couple of states. If we don't do all this innovation, especially being a mill which is up north, I don't see a good future.
Q: Export from India has decreased. Do you think it can be stopped permanently, or only those with quality paper can export?
Quality paper will always hold value, and we must strive for that. However, international scenarios, especially fuel prices, play a significant role. If issues arise in Europe, India may find opportunities in Africa or the Gulf market based on fuel prices. But in the end, again, those who have this much overcapacity and those who have quality paper will be able to make their own place.
Q: There has been a significant increase in packaging paper capacity in South East Asia and Europe. Is the export scenario from India completely over?
Yes, it is essentially done. The focus is now on value-added products.
Q: Do you think excess capacity will be offset in a couple of years?
While growth will persist, some mills are wisely opting to shut down, realizing the impracticality of burning money.
Q: Odour is a significant problem in the paper sector. How do you address the odour or smell issue?
We have taken extensive measures to address odour problems. With land discharge permission, we've established a 100-acre Eucalyptus plantation around our mill. Our ETP is up to date, and after controlling DOD and COD levels, we utilize our own water for irrigation, contributing to the green belt surrounding us.
Q: What is the scenario of waste paper? Can it go down further, or will the market go up?
My personal intuition is that capacity is still increasing; You are still hearing that around 1000 tons per day plants are under process of commencement. I think it will go ahead and tighten.
Compostable products are materials that can biodegrade and disintegrate into natural elements in a composting environment, leaving no harmful residues. To qualify as compostable, packaging materials and products must break down completely and convert into natural elements within a short period following disposal.
North America is the leading market player in the global compostable packaging sector (by revenues and market share) while Asia Pacific is the largest (by volume), a trend that is likely to be sustained. The global compostable packaging market was USD 46.36 billion in 2021 and is estimated to grow to USD 75 billion by 2029, a CAGR of 6.20%. With government policies directed at sustainable packaging, a rapid growth in the global compostable packaging market is forecast. The rise of e-commerce and online food orders, the compostable packaging market is expected to expand 1.5x during the projected period.
Compostable packaging drivers Online retail: Online shopping has expanded in China, India, Brazil, ASEAN and others due to the widening use of smartphones leading to online shopping translating into enhanced use of corrugated boxes and paper bags.
Literacy: India’s literacy rate is 77 percent. The government has allocated INR 1,12,899 crores to education in the Union Budget 2023. This quantum is expected to widen the market for eco-friendly packaging awareness.
E-commerce: The Indian e-commerce market is expected to grow from USD 74.8 billion in 2022 to USD 350 billion by 2030, influencing the use of sustainable packaging.
Rising population: India’s population has surpassed China and is estimated at 1.41 billion, catalyzing the Indian packaging sector.
Demographic dividend: The Indian population’s median age is now at 28.4 years in 2022 as against 30 years of global average, strengthening the offtake of green packaging products
Restaurant takeaway: The Indian food and beverage packaging market stood at USD 31.75 billion in 2022. Between 2023 to 2029, Indian food and beverage packaging market size is expected to grow at a CAGR of 14.8 percent growing to USD 85.9 billion by 2029. Higher standard of living and fast paced urban life are the factors which are contributing to the growth of online food delivery paired with packaged food.
Organized retail: By 2032, the retail industry is expected to be worth a staggering USD 2 trillion. The percentage of contemporary retail (including e-commerce) is predicted to rise to 35 percent, while traditional retail is anticipated to decline to 65 percent, despite the fact that the industry is mostly unorganized. India’s per capita net national income is estimated to be INR 172,000 yearly for FY 2022- 23, recording a growth of 14.4 percent over the previous year.
Indian packaging industry overview
The growth in the Indian packaging industry has been catalyzed by a surge in e-commerce, food processing, pharmaceuticals, FMCG, manufacturing and health care sectors. The Indian government’s ‘Make in India’ initiative has catalyzed the packaging industry and the country’s paper and packaging industry is the fifth largest sector in the economy.
India is a major exporter of flattened cans, printed sheets, components, crown cork, lug caps, plastic film laminates, craft paper, paperboard and packaging machinery. The laminates and flexible packaging segment, particularly PET and woven sacks are growing fastest. Packaging-grade paper accounts for 55 percent of the main types of paper produced domestically in the paper and paperboard industry. India is a significant player in the global packaging materials market, catalyzing exports.
India’s export of packaging materials grew at a CAGR of 9.9 percent to USD 1,119 million in 2021-22 up from USD 844 million in 2018-19. United States was the leading export destination for the Indian packaging industry, followed by United Kingdom, United Arab Emirates, Netherlands and Germany.
The Indian paper and paperboard market is also predicted to expand at 6-7% annually. Source: ibef.org, niir.org) India’s paper and packaging industry is expected to grow to a value of $204.81 billion by 2025, with a CAGR of 26.7% from 2020 to 2025.
The above report has been extracted from the Pakka Limited’s Annual report for FY 22-23
Emami Paper: Chinese mills flooded the South-East Asian market with their paper products, resulting in a loss of nearly 30% of market share for companies in India
-Annual Progress Report for FY 22-23:
-Company’s export sale stood at INR 270 crore compared to INR 586 crore in immediately preceding financial year
- A size press successfully retrofitted in the largest newsprint machine of Emami Paper Mills making it suitable for producing other grades of papers
The Pulp and Paper Times:
Emami Paper Mills (EPM) is one of the largest newsprint manufacturers in the country as well as a leading manufacturer of Packaging Board and Writing & Printing Paper. Having a rich legacy of delivering superior quality products.
Setting aside the conventional approach, the Emami Paper of today believes in informing and educating its stakeholders. EPM is transparently sharing financial performances, operational metrics and procurement strategies within the organisation and it has created deeper engagements of various teams within the organisation. The cross-functional synergies derived from these efforts inspire us to set more precise targets and aim for greater goals.
“Over the past year, we have continuously reiterated our commitment towards excellence, innovation and sustainability with a greater focus on adapting ourselves to an evolving business landscape. We have adopted a proactive approach to understand client expectations, improved our capacity to develop new-age products and above all, kept an unwavering focus on abiding by the highest standards of quality. Alongside, our focus on ensuring customer satisfaction drives us to operate with great passion, enabling us to produce customised products and consistently create new revenue generation streams. Besides, it forges enduring relationships and earns us the trust and loyalty of a marquee clientele,” said by Mr. Aditya V. Agarwal, Executive Chairman of Emami Paper in the annual report for FY 22-23.
Mr Agarwal further added, “As a responsible business, we believe in not just pursuing profitability, but also take into account its impact on the environment and society. By undertaking initiatives for the welfare of communities, optimising resource utilisation, and embracing viable methods to minimise our imprint on the planet, we are actively contributing to a greener and more sustainable future.”
During the fiscal year, EPM revenue grew by 18%, reaching INR 2,308 crore. The EBITDA and PAT stood at INR 237 crore and INR 69 crore respectively in the previous fiscal year.
“Reflecting on the past year, while the first half favored us, the latter part did not progress as expected. Several factors contributed to this, including the unprecedented increase in the price of pulp, our key raw material. The Russia-Ukraine conflict and the COVID-19 outbreak in China were among the reasons for this surge. Additionally, the domestic consumption of pulp declined, and Chinese mills flooded the South-East Asian market with their paper products, leading to a significant impact on our sales. This region accounts for 20%-30% of Indian exports, resulting in a loss of nearly 30% of market share for companies in India. Moreover, the energy crisis in the Euro region posed a threat to our industry,” said Mr. Vivek Chawla, Whole-time Director & Chief Executive Officer.
Mr. Chawla further added about Focus on innovation and digitization, he said, “Focus on innovation and digitization remains a top priority for Emami Paper Mills. We understand that innovation is the key to remaining competitive in an ever-evolving paper industry. To foster innovation, we have established a dynamic Product Development Cell, dedicated to creating innovative paper products that meet the diverse needs of our customers while driving profitability. This emphasis on quality and customization ensures we deliver high-quality products that stand out in the market”.
On the way forward, Mr. Chawla described that our unwavering commitment to quality, customer engagement, cost optimization, and operational efficiency will continue to be the cornerstones of our success. By consistently delivering high-quality products and services, engaging with our customers to understand their evolving needs, optimizing our costs, and driving operational efficiency, we are confident that we will achieve sustainable growth in the years to come.
Emami Paper Mills recognizes the importance of technology as a catalyst for progress. Through continuous investment in technology, EPM aims to enhance productivity, streamline processes, and ensure efficient resource utilization. By leveraging technology, EPM will stay at the forefront of innovation and reinforce its position as a leader in the industry.
Environmental stewardship is another key pillar of Emami Paper Mills' sustainability strategy. Given the nature of our industry, it is crucial to find ways to reduce freshwater consumption. To this end, Emami Paper Mills has set internal targets to increase the share of recycled water used in paper production processes. We are also implementing energy-efficient practices by employing state-of-the-art energy meters to monitor and curtail energy usage. These initiatives reduce our carbon footprint and minimize our impact on the environment, aligning with Emami Paper Mills' long-term sustainability goals.
EPM’s total production capacity stands at 3,40,000 tons per annum. It has also established a captive power plant generating 33.5 MW power, thereby ensuring self-sufficiency in meeting our energy and steam demands. EPM produces 2,00,000 tons per annum of multilayer coated packaging board and have a combined capacity to manufacture 1,40,000 tons per annum of superior quality writing and printing paper along with best-in-class newsprint.
During FY 22-23, the export sales of the Company declined mainly due to increase in export from China to the Southeast market at throwaway prices where the paper industry in India was exporting. This led to sharp fall in the prices of the Paper Board in the countries where the Company was exporting. In FY 2022-23, the Company’s export sale stood at INR 270 crore compared to INR 586 crore in immediately preceding financial year.
During FY 2022-23, EPM witnessed a significant impact from the rising prices of major imported raw materials such as pulp, waste paper and fuel. Amidst a trend of global greenflation, there has been also a surge in freight rates and container costs. Currently, we are sourcing raw materials from countries like United States of America, United Kingdom, Canada, New Zealand, Indonesia, etc. During the pandemic period and even thereafter, there were bottlenecks with regards to supply chain which is gradually now streamlining.
A size press successfully retrofitted in the largest newsprint machine of Emami Paper Mills making it suitable for producing other grades of papers. The trial run has been successfully completed. For the first time in the Indian Paper Industry, such a project in a running mill was successfully commissioned. With the successful commissioning of size press, the company was able to cater to the increasing market demand in the writing and printing paper segment apart from Newsprint. The writing and printing paper segment gave a good realization.
The Report further added that the paperboard and industrial packaging paper markets, as well as the newspaper print markets, are estimated to account for over 70% of the total paper market share. However, the stationery paper and speciality paper sectors are predicted to experience an upward trend in annual market growth in terms of volume, while the growth of the stationery paper market in terms of value is likely to decline. At present, the growing demand for environment-friendly products is driving manufacturers to seek effective ways to meet this emerging demand. The paper industry is benefiting from technological advancements, which have resulted in improved production capacity and reduced fuel costs, among other advantages, thus enabling the industry to scale new heights.3 The pandemic adversely impacted paper consumption, leading to a sharp decline. However, demand has recuperated strongly in the current fiscal year, surpassing prepandemic levels.
Holmen: Wood prices are now 30 per cent higher than the historical average; combining its paperboard and paper into a single business area, strengthening book paper business
Holmen is a Swedish forest company that gives quality-conscious customers across the world access to renewable products from the Swedish forests. Holman manages the forest actively and sustainably, and use the raw material wisely and far-sightedly. The wood is refined into wood products for sustainable building, and turns whatever is left over into paperboard of world-leading quality and innovative paper products.
2023 was defined by the central banks’ attempts to combat inflation through interest rate rises, which slowed the pace of newbuild construction and stifled consumption. Despite the challenging economic environment, we were able to maintain operating profit for 2023 at a historically good level of SEK 4 755 million, says Mr Henrik Sjölund, President and CEO, Holmen
Higher interest rates contributed to a decline in demand in the previous year, but our business model − creating value based on our forest assets − has proven successful even during these tougher times. With our large forest holdings as a foundation, we grow houses while also harnessing the energy that blows over the treetops and flows in the rivers. We then make renewable packaging, magazines and books from the residual forestry products.
In light of the solid earnings and our strong financial position, the Board of Directors proposes that the dividend per share be increased from SEK 8 to SEK 8.5, with the payment of an extra dividend of SEK 3.
Forest and energy are in-demand resources
The forest has a key role to play in the climate transition and demand for both logs and pulpwood is expected to increase. Although the industry has not been running at its peak, competition in the wood market across the Nordic region remains high and prices climbed further in 2023. Wood prices are now 30 per cent higher than the historical average, and the value of Holmen’s Forest properties has increased by SEK 4 billion to SEK 56 billion. With a little over a million hectares of productive forest land, we have a much sought after resource that literally grows year on year. Our position in the wood market, with good control over raw materials and the entire value chain, ensures the long-term security of our raw material supplies and gives us good opportunities to continue developing our industries.
The European energy market is undergoing a major transition. Roughly half of today’s electricity production in Europe is fossil free, but electricity only accounts for a quarter of total energy consumption and almost all other energy consumption is fossil based. Europe has accelerated its climate transition and is beginning to pave the way for new green industry. As a result, considerable renewable electricity production is going to be needed, and Holmen is continuing to pursue permits for new wind turbines on its own land. Our hydro power additionally contributes to the production of electricity at times of peak demand in order to stabilise the grid. The role of controllable hydro power is also going to become increasingly important as more weather dependent electricity production is added to the energy mix. The energy situation in Europe improved over the year thanks to good gas stocks, lower production levels in energy intensive industries and a milder winter. Continental electricity and energy prices have also stabilised, but at a higher level than before the energy crisis.
There is significant potential for Holmen to deliver more renewable energy, but to realise this, we need permits from the authorities. I really hope politicians will speed up the permit processes, for the sake of Sweden and the green transition. I am pleased to report that in 2023 we obtained permits for two new wind farms. In the first phase we intend to build Blisterliden Wind Farm in Västerbotten for a 20 per cent boost to our production of wind and hydro power. Alongside this, we are also beginning work with Vattenfall on Stormyrberget Wind Farm in Västernorrland, a project that may be ready for an investment decision by 2025.
Adding value at our own facilities Buildings account for considerable emissions of greenhouse gases, in construction and during the building’s lifecycle. As a building material, wood is benefitting from the ongoing transition to more sustainable building, in a trend that is expected to drive up demand for wood products, particularly if concrete and steel are made to carry their true cost to the climate. There is considerable interest in large-scale wood construction, but demand from the rest of the construction market was subdued over the year due to high interest rates. Given our strong position in the wood market, we see good opportunities to develop the wood products business in pace with the increasing demand for sustainable building materials. The first step is to increase capacity at Iggesund Sawmill, and to ramp up the production of glulam and CLT.
Over the years, Holmen has succeeded in developing both paper and paperboard based on fresh wood raw material and a largely fossil-free production process. Our well-invested facilities, access to fossil-free electricity and local wood make us highly competitive, and we are continuing to develop our process industry. Within paperboard, we have excellent opportunities to grow the premium business over time, while in paper we are investing to strengthen our book paper business while also launching a new product for transport packaging.
To further increase our competitiveness and strategic capabilities, we are now combining paperboard and paper into a single business area – Holmen Board and Paper. This move sees us focusing our business model on four distinct business lines: forestry, hydro and wind power, woodworking industry and process industry operations.
Well equipped for the future
Holmen’s strategy draws on the fact that the world is transitioning towards using energy and materials sustainably. Our growing forests bind carbon dioxide and all our products help to replace fossil-based materials such as concrete, steel and plastic. Our electricity production makes it possible for people to charge their electric cars and for companies to run their production on renewable energy sources. Our positive climate impact for 2023 equated to 7.5 million tonnes of CO2e
Our strong financial position makes Holmen well placed to succeed even during tough economic times. Backed up by our own forest and energy production, we have been able to continue developing and advancing our business despite global uncertainties. And that is going to continue.
The above review of Mr Henrik Sjölund, President and CEO, Holmen, has been extracted from the annual report of SAC for FY 2023
Valmet to deliver advanced tissue line to Andhra Paper’s kadiyam mill
The Pulp and Paper Times | 26 June 2024
Valmet is to deliver an Advantage DCT100HS tissue line to Andhra Paper Limited for its Kadiyam mill in Andhra Pradesh, India. The new line is optimized to enhance production and reduce environmental footprint. The start-up is scheduled for the end of 2025.
The order is included in Valmet's orders received of the second quarter 2024. The value of the order will not be disclosed.
“This strategic investment proves our commitment to innovation, sustainability, and meeting the evolving needs of our customers. The decision to invest in cutting-edge technology from Valmet underscores our dedication to enhancing our production capabilities while reducing our environmental footprint. The new tissue machine will leverage advanced engineering and design to maximize efficiency and productivity, ensuring that we continue to deliver high-quality products to our valued customers,” says Mukesh Jain, Executive Director, Andhra Paper Limited.
“It is a privilege to cooperate with Andhra Paper and deliver them world leading Valmet Advantage DCT technologies. We are looking forward to working together to make the new tissue line successful,” says Jenny Lahti Samuelsson, Vice President Tissue Mills Sales, Paper business line, Valmet.
“We are very proud to be chosen as the supplier and partner for Andhra Paper’s expansion. The order reaffirms our position as a leader in the tissue industry, empowering us to maintain a competitive edge in both domestic and international markets,” says Timo Honkanen, Vice President, Paper Business, Asia Pacific, Valmet.
Delivery’s technical information
Valmet's scope of delivery will comprise an Advantage DCT 100HS tissue machine equipped with an OptiFlo TIS II headbox and an Advantage Steel Yankee Dryer. The machine will feature Advantage tissue technologies, including an Advantage ReDry, an Advantage ViscoNip Press, a gas heated AirCap hood, rewinders and process equipment. In addition, the delivery includes Valmet’s automation with Valmet DNA Distributed Control System (DCS) and Valmet IQ Quality Control System (QCS).
The tissue machine will have a paper width on reel of 2,850 mm, a maximum operating speed of 6,560 ft/min (2000 m/min), and a yearly capacity of 35,000 tons of high-quality tissue grades dedicated for bath, towel, facial and napkin products.
The consumer goods industry is moving towards replacing plastic-based packaging materials with molded fiber-based materials, says Mr. Salminen from Kemira OYJ
Key Points
- 40% of the plastic waste comes from packaging, and a lot of that waste goes into the environment, of which only 9% is recycled.
- Transforming Industries: How Chemistry and Fiber-Based Materials Are Shaping a Sustainable Future
The Pulp and Paper Times:
Mr Antti Salminen, President- Paper Segment, Kemira OYJ, Finland shares his views about the role of chemistry in pulp and paper industry and shares how chemistry plays a crucial role in making a sustainability transformation of the world. He shares how chemistry can help world get out of plastic and replace it with sustainable, recyclable fiber-based materials.
Sharing his views on the role of chemistry in the paper industry during Paperex 23, Mr. Antti Salminen, said, "The sustainability transformation is not only of the industry but of the world. Many people have already addressed the key points about its role in making this world a sustainable place. I will talk about chemistry because chemistry is needed when converting wood-based fiber into different applications that we need today or in the future."
He added, "The world needs to reduce its dependency on oil. This transformation will take time and will require technical developments in different areas of the industries. Consumers, regulators, and brand owners are pressuring industries to decrease their dependency on fossil fuels. The pulp and paper industry will play a crucial role in this transformation."
He added further, "We have solutions for its problems. Wood-based fiber and cellulosic fiber are at the heart of this transformation. The fiber is circular, renewable, recyclable, and biodegradable, so it ticks all the boxes. It can minimize the environmental impact of the packaging solutions. We need to take care of sustainable forestry and farming, while making sure that we have the right balance. If correctly managed, it will reduce the world's reliance on finite oil-based resources. It is safe and versatile, and with technology and chemistry, it can modify wood-based fiber in thousands of applications, which is why I see that the future is bright. Globally, we are facing one of the steepest downturns in the industry. It maybe not visible here in India; last year the demand fell in the industry. But this is short-term. It's a cyclical industry, and in the long term, fiber will be key for global economy."
"It all starts with packaging, which we all know so well. It was maybe the first reinvention of the industry, moving away from the paper industry into packaging. The e-commerce industry has been driving growth for the past few decades and developing the right kind of solutions for lightweight, durable packaging for global industries, be it investment goods or consumer goods. Still, 40% of the plastic waste comes from packaging, and a lot of that waste goes into the environment, of which only 9% is recycled. Plastic is a fantastic solution for several applications; it's cheap and lightweight, but not sustainable, and we need to come up with alternatives. There's regulatory push in many parts of the world, there is a big brand pull. Many global brands, packaged food producers, textile companies are pushing politicians and regulators, for more circular, biodegradable, and sustainable packaging solutions," he added.
Talking about liquid packaging, he said, "One of the problems that the industry needs to solve is barrier coating for liquid packaging. For example, a fiber-based coffee cup, however, to hold liquid, there is still a polyethylene coating or barrier inside. The same goes for liquid packaging, which decreases the recyclability of the fiber-based material. So, we need solutions for creating barrier properties without using polyethylene or oil-based materials. And there, we and other chemical companies can help by coming together with the board producers and other technology providers to come up with solutions that will be biodegradable, but that's one of the challenges still ahead of us."
Another area that is growing is molded fiber or molded pulp solutions, and he added, "These technologies have been there for a long time; they've been relatively low-tech and used for low-tech applications, but now we've seen that the consumer goods industry is moving towards replacing plastic-based package materials with molded fiber-based materials. Much of the stuffing in the cardboard box is not plastic or bubble wrap anymore; it is molded fiber because it's lightweight, durable, and can be used in different applications. And again, to enable these high-end solutions for molded fiber, technological development is needed, both in terms of machines and chemistry."
Talking about textile industry, he said, “The industry is fiber-based and has many similarities to the pulp and paper industry. There are two sources of raw materials: oil derivatives, i.e., synthetic fibers or cotton, and natural fibers, and neither, as an industry, are sustainable. Paperboards are recycled, but only around 1% of all textile fibers are recycled. Similar technologies are required to recycle both. We need to de-ink them, repulp them, and then give the fiber new properties as every cycle it gets weaker and weaker, so there's a lot of the knowledge that we have will be in demand in the textile industry. Many new startups are working on producing textile fibers out of the wood. Not only existing technologies but new technologies are coming, and we should not give this opportunity to the traditional textile players, as the pulp and paper industry possesses the expertise."
“Chemistry needs to support these sustainability shifts in the industry. To change the properties of the fiber, you need different chemicals, as we are using in the pulp and paper industry. Right from the pulping, bleaching, and deformers, and going into strength chemistry, all that is needed and more when we get to these new applications. But what's more important is that we are using many oil-based chemicals in terms of the feedstock. So we, as a chemical industry supporting the paper industry, need to get out of fossil fuels and come up with innovations with sustainable chemistry,” he added.
He stated, "We aim to make our chemistry as sustainable and renewable as our base product - the fiber. By 2030, we have set a target of generating over half a billion euros in revenue from renewable chemistry, which will only increase from there. Achieving this goal requires extensive research, development, and trials with our customers - the pulp and paper, and board producers. We acknowledge that our competitors will also introduce new chemistry, but we are confident that we will lead the way in making the industry more sustainable and renewable."
He opined, “However, sustainability is not enough, as many uses for fiber-based products require properties that we have not imagined. For instance, the functionality of the chemistry also needs to change. So we all need to work together to be able to develop products with new properties. It is not out of the question that one day when you buy a new car, the dashboard, instead of plastic, will be a wood-based composite. To produce that composite, you need different value chain technology and machinery than the traditional board-making ones. You need chemistry to get these properties, but we need to understand that as the division of the industry, our job is not to produce paper; our job is to help this world get out of plastic and replace it with sustainable, recyclable fiber-based materials.”
AFRY's David Powlson unveils promising future for India's paper sector amid global dynamics
Paperex 2023 unveils futuristic approach to paper industry: eminent speakers illuminate the path ahead. join the panel discussion on the decade ahead with industry visionaries. don't miss expert insights on the future of paper – here's a glimpse of our distinguished speakers and their addresses!
Mr David Powlson, Director, AFRY, the global engineering and design company, a groundbreaking outlook on the future of India's paper sector has emerged. After an extensive forecasting process spanning the next seven to eight years, Powlson reveals a robust view of the industry, emphasizing India's pivotal role in shaping the landscape of global paper demand.
The Pulp and Paper Times:
Unveiling the Global Paper Market Landscape
According to Powlson, the paper sector is experiencing varied trajectories worldwide. On a global scale, the industry is witnessing a 1% per annum growth, with nuances across different paper grades and geographical locations. Newsprint is facing a marginal decline, graphics paper is experiencing modest growth, while tissue emerges as a significant player, displaying substantial growth rates. However, it is packaging that takes the spotlight, contributing significantly to the overall growth volumes.
India: A Beacon of Growth
In this dynamic scenario, India emerges as the standout player, predicted to showcase the highest levels of growth globally. Despite newsprint facing a flat to marginal decline and graphics sector growth slowing down, the Indian paper market is set to soar. Tissue, in particular, is expected to witness an astounding 9% annual growth over the next seven to eight years, driven by a low consumption level that magnifies the growth impact. Additionally, packaging is projected to experience growth rates well above 5-6%, further solidifying India's position as a major contributor to the paper industry's expansion.
Factors Fueling India's Ascendancy
Several factors contribute to India's promising outlook, including its impressive GDP growth - the highest in the world at present. Population growth, environmental considerations, and sustainability concerns also play pivotal roles in propelling India forward in the paper sector. Paulson underscores the connection between GDP growth and paper demand growth, highlighting India's exceptional economic performance.
Challenges and Opportunities
While acknowledging past infrastructure challenges that hindered production growth, Paulson remains optimistic about India's future trajectory. He notes that the industry is poised for positive developments, driven by an overall growing economy, robust environmental policies, and a population that continues to expand.
In conclusion, AFRY's forecasting paints a vibrant picture of India's paper sector, presenting a compelling narrative of growth, sustainability, and economic vitality. As the nation solidifies its position as a key player in the global paper market, the world watches with anticipation as India's paper industry journeys toward a promising and prosperous future.
Satia Industries has a strong order book covering more than one month of revenues, despite a decline in revenues due to softness in pricing in FY24
Key Highlights: - Company’s healthy order book and lower raw material prices have helped the company in improving the gross margins at 57.1% in FY24 as compared to 52.7% in FY23. For Q4FY24, gross margins were 56.0%.
- Net profit stood at INR 2,112 Mn in FY24, up 10%.
- Satia Industries successfully completed the commissioning of 75 TPH multi fuel boiler.
- SIL has a strong order book covering more than one month of sales.
The Pulp and Paper Times | 28 May 2024
Satia Industries Limited (SIL), is one of the largest Wood and Agro-based paper manufacturer in India. It surprisingly overtook many of its peers in production achieve, to 2,13,804 MT in FY24 implying a capacity utilization of 98%. SIL has successfully commissioned their PM 4 and has augmented its total installed capacity to 219,000 MTPA.
Marked by the industry headwinds w.r.t. to softness in pricing and challenging demand environment, the company saw a 9% decline in revenues to INR 17,208 Mn in FY24. For Q4FY24, the revenues were INR 4,306 Mn.
Commenting on the financial results for FY 23-24 and Q4, Executive Director Mr. Chirag Satia, said, “FY24 demonstrated our resilience. Despite facing industry headwinds, we are pleased to have improved our profitability this year. This success was driven by our strong relationships with state textbook boards and our stringent expense control. For FY24, our revenues were INR 17,208 Mn. Although this represents a decline due to lower paper prices, it is noteworthy that our volumes remained steady. Currently, we have a strong order book covering more than one month of revenues. These orders provide a buffer against adverse industry impacts.
During Q4 FY24, we observed a decline in both paper and raw material prices. Notably, the prices of wheat straw and agro pulp dropped significantly, positively impacting our profitability this quarter. We capitalized on this by increasing the use of agro pulp, further enhancing our savings and margins. While wood pulp prices rose, our existing inventory cushioned the impact on this quarter's performance.
He further said, Satia Industries remains steadfast in its commitment to enhancing operational efficiencies and optimizing resource utilization. Our focus on continuous improvement across projects enables us to effectively address challenges. We are pleased to announce the successful commissioning of our 75 TPH muilti fuel boiler.
Looking ahead, we are well positioned to leverage our synergies from our strategic initiatives and remain confident in our ability to navigate any external industry challenges. Our commitment to delivering shareholder value remains steadfast, achieved through stable revenue streams, strategic cost management, and targeted investments. We maintain optimism about the future despite current market conditions and are confident our focused efforts will propel us on a positive trajectory.”
ITC's Paperboards and Specialty Papers Division (ITC-PSPD) has disclosed its financial results for the fourth quarter of FY24, revealing a 6.7% year-on-year decline in revenue, totaling INR 2073 Crore. The company attributes this downturn to competitive pressures from low-priced Chinese supplies in global markets, muted domestic demand, and surge in wood costs.
Global and Domestic Challenges: In its submission to the Securities and Exchange Board of India (SEBI), the company highlighted the subdued global demand and a slowdown in domestic demand . Paperboards, Paper and Packaging Segment remains impacted by low priced Chinese supplies in international markets (including India), muted domestic demand, surge in wood cost and high base effect. Demand environment remains subdued across domestic and global markets.
The report stated that subdued realisations and surge in domestic wood prices exerted pressure on margins; structural advantages of an integrated business model, Industry 4.0 initiatives, strategic investments in High Pressure Recovery Boiler and proactive capacity augmentation in Value Added Paperboards aided in partly mitigating pressure on margins. Despite the headwinds as aforestated, the Business further strengthened its leadership position in the Value-Added Paperboard (VAP) segment through focused innovations, development of customised solutions for end-use industries and strong end user engagements.
During the year, the Company’s wholly owned subsidiary, ITC Fibre Innovations Limited, commissioned a state-of-the-art premium Moulded Fibre Products manufacturing facility in Badiyakhedi, Madhya Pradesh, to foray into the fast growing premium Moulded Fibre Products (MFP) space with applications across industries including food serving and delivery, pharmaceutical, beauty and electronics.
Capacity utilisation of Nadiad packaging and printing unit in Gujarat progressively ramped up.
The state-of-the-art premium Moulded Fibre Products manufacturing facility commissioned in Mar’24.
“The Paperboards, Paper & Packaging Segment had to contend with soft domestic and export demand conditions which significantly depressed net realisations, cheap Chinese supplies in international markets including India, unprecedented escalation in domestic wood costs and high base effect.” The report outlined.
“Paper based sustainable alternatives designed to replace single-use plastics continue to be ramped up with ‘Filo’ series - ‘FiloBev’ (for cups), ‘FiloServe’ (for QSR, bakeries, food retail) & ‘FiloPack’ (packaging for sweets and deep freeze applications), witnessing strong growth momentum in both domestic and international markets. During the year, Flustix (No Plastic) certification also has been received for FiloPack. The Business is stepping up investments, in this fast-evolving space which holds immense growth potential, supported by the R&D capabilities of the Company’s Life Sciences & Technology Centre, and external collaborations with global specialists. The Business continues to focus on developing and scaling up several innovative solutions towards “Reducing, Reusing and Recycling” of plastics; these are under various stages of commercialization” the report said.
A pipeline of products developed through proprietary solutions such 10 as ‘Bioseal’ (compostable coating to replace plastics), ‘Oxyblock’ (recyclable coating solution to enhance barrier properties in packaging) and ‘Germ free coating’ (solution for microbial free packaging surface addressing the consumer consciousness towards hygiene and safety) have been introduced, with increasing adoption levels across end use segments.
Education and Stationery Products:
The Education and Stationery Products industry witnessed strong growth during the year driven by increased household penetration on the back of higher enrolment ratios and growing literacy. The year also witnessed heightened competitive intensity with a resurgence of regional players on the back of moderation in input prices. During the year, the Business consolidated its leadership position in the industry, driven by innovative product launches and portfolio premiumisation.
The ‘Classmate Interaktiv’ Notebook portfolio continued to witness strong consumer traction driven by a wide range of differentiated offerings. These included products that enable ‘Do It Yourself’ activities with a view to ‘Enjoy Learning’, immersive technologies such as augmented reality and interchangeable covers. The Business also accelerated the adoption of ‘Classmate Pulse’ spiral format through targeted activations and focusing on new customer segments such as high school students, in addition to college goers and the youth segment. The ‘Paperkraft’ portfolio was also strengthened with the launch of a new range of notebooks with differentiated design themes catering to both personal and professional usage. The Writing Instruments portfolio delivered a strong performance on the back of recent launches with differentiated forms and features which received encouraging consumer response.
The Business sustained its leadership position on e-Commerce platforms through consistent availability of a wide assortment of products, backed by focused interventions to enhance consumer traction.
During the year, the Business enhanced its manufacturing capacity of spiral notebooks at its dedicated manufacturing facility at Vijayawada. Equipped with state-of-the-art technology, the facility enables the Business to develop differentiated notebook formats, drive cost reduction and address opportunities in overseas markets.
Packaging and Printing Business:
Packaging and Printing Business continues to be acknowledged as a ‘first choice packaging partner’ by several reputed FMCG companies in the country for providing superior and cost-effective packaging solutions incorporating high quality structural design, print embellishments, enhanced security features and design–for–recyclability. During the year under review, the packaging and printing industry witnessed several headwinds. Subdued demand in certain key end user industry segments, progressive de-cartonisation in the liquor industry and decline in price realisations rendered the operating environment extremely challenging. The recent capacity addition at Nadiad, Gujarat, with state-of-the-art equipment to cater to markets in Western region, has further augmented the Business’ capabilities in Carton packaging. Capacity utilisation at the facility has been progressively ramped up during the year.
APRIL Group enters India's growing Tissue market by acquiring Origami, bolsters global expansion strategy
The Origami Acquisition Marks APRIL’s Entrance Into India’s Fast-Growing Tissue and Personal Hygiene Market
The Pulp and Paper Times | Singapore, 15 May 2024
APRIL Group, a leading global producer of fibre, pulp and paper, has acquired a controlling stake in Origami, India’s leading consumer tissue products company, marking its entrance into the fast-growing India tissue and personal hygiene market. APRIL Group is a member of the Singapore-headquartered RGE group of companies.
Origami, a household name in India, is a fully integrated operation spanning tissue paper mills and converting plants operating at multiple locations and distribution centers across the country. As India’s leader in tissue and personal hygiene, Origami manufactures an extensive product range covering facial tissues, paper napkins, toilet tissue rolls, kitchen towels, hand towels, and wet wipes under the Origami and affiliated brands.
Origami was founded in 1995 by Neelam and Manoj Pachisia, who will continue to hold a significant minority stake in the company and continue to lead the business following the completion of the acquisition.
The Indian tissue market has shown significant year-on-year growth, driven on the back of India’s fast evolving middle class, consumer perceptions and habits on hygiene and personal care. This has created a market environment in which international-standard personal hygiene products are increasing in demand, with headroom to grow given that per capita consumption is well behind global standards.”
“The Indian tissue market is rapidly expanding, driven by consumers’ evolving perceptions and habits on hygiene and personal care,” said Suneel Kulkarni, Country Head, APRIL India & Subcontinent.
“By bringing together APRIL and Origami, we’re well placed to serve the growing national demand for high quality, sustainable personal hygiene products.”
APRIL has been a leading exporter of pulp and paper products into India over the last 25 years. The acquisition of the controlling stake of Origami is part of APRIL’s strategy to expand its global footprint into the world’s most populous markets following recent investments into the tissue markets in China, Southeast Asia and Brazil. In India, APRIL plans to follow its successful model to integrate leading local enterprises into its global growth plans and provide the resources to upgrade technology and processes to provide world class environmental conscious products at affordable prices.
Leveraging the company’s status as a leading supplier of pulp to India, APRIL’s acquisition of the controlling stake in Origami also enables the group to ‘Make in India’ to further support foreign direct investment in local production.
“Together, APRIL and Origami are stronger,” Mr. Kulkarni added. “With this acquisition, APRIL is well-positioned to drive increasing penetration and access to high quality and sustainably produced tissue paper and other products to the Indian consumer. This growth will be achieved through additional investments across manufacturing, deepening existing channels, expanding and developing new channels, and product innovation.”
Indian paper industry sees price increase due to rising raw material costs
The Pulp and Paper Times | May 8, 2024
Virgin grades paper prices are seeing a correction due to the significant increase in the costs of raw materials, transportation, and other essential inputs required for operations, affecting the paper price dynamics of the Indian paper industry. Hardwood pulp and waste paper prices have surged significantly. Continuous increases in the cost of raw materials and freight have initiated this price increase to cover the cost.
There have been price hike circulars issued by JK Paper, APP, Bindal Papers, and Khanna Paper. The increase looks significant, ranging from Rs 1,000-2,000 a tonne for various virgin grades, including boards.
JK Paper's letter to its Channel Partners & Customers stated, "In recent months, we have faced a significant increase in the costs of raw materials (Wood & Pulp), transportation, and other essential inputs required for our operations. Despite our efforts to absorb these rising expenses, we find it necessary to adjust our prices accordingly."
“Due to continuous increases in the cost of raw materials and freight, it has become necessary to initiate this price increase to cover the cost,” APP (CHINA) informed its valued customers.
Effective 16th May 2024, JK Paper announced an increase in the prices of its products. New Prices will be applicable for all fresh orders received from 16th May 2024 as mentioned below. This adjustment is essential to sustain our business operations due to the rising input costs. New Prices will be applicable for all fresh orders received from 16th May 2024. JK Paper increased the price of all FBB Grades (JK Tuffcote family) by Rs. 2000/- PMT, FBU SS (Uncoated Board) by Rs. 2000/- PMT and all Polycoated Grades -by Rs. 2000/- PMT.
“The Price of HW Pulp has gone up by 25% in the last couple of months. Also, the Recovered Paper has witnessed a 15% increase in the last 1 month. And so, we have decided to initiate this Price Increase,” Khanna Paper said in its intimation to its channel partners and Customers.
APP (China) is announcing a minimum price increment of 20 USD/t effective from May 15th, 2024. Khanna Paper Mills is increasing the Price of W&P Grades by Rs. 2000 PMT w.e.f., 7th May'24.
Bindals Papers Mills said in its intimation that Considering the sharp escalation of Raw Material prices and pressure on production cost, we are increasing the price of our Writing and Printing Grades by Rs. 1000/MT with immediate effect i.e. from 06th May'24.
“Large Mills are converting their machines into brown paper, people are tending to use more recycled paper than virgin paper,” says Mr. Inder Aurora of Tradecom International
- Prices go up and down depending on whether China is in the market or not
- All the big mills in India are setting up their own pulp lines to make their own BCTMP hardwood
- We would want to trade more within Southeast Asia, so that's why we have a zero-import duty
In an exclusive interview with The Pulp and Paper Times during Paperex 2023 in December, Mr. Inder Aurora, Managing Director, Tradecom International Pvt. Ltd. shares his thoughts on several topics, including quick review of the present recovered paper trade , import of paper, pulp market, sustainability in the raw material supply chain. Here is the whole interview he gave.
Q: please share a small introduction of Tradecom International
Tradecom International was started in 1988. It's been over three decades now, so we deal in recovered papers and wood pulp, and our customer base is small and medium mills in terms of imported recovered paper and wood pulp. Our customer bases are all large integrated pulp and paper mills, and on the unit side of the business, we have a couple of verticals. We are wholesale dealers for ITC as well as running converting centers for ITC, and we also import liner boards and high-quality flutings and customize them at two locations, one in Pune and one in Sonipat, and supply them to all the converters on a pan-India basis.
Q: Being a reputed importer of recovered paper, how do you analyze the waste paper market?
I can only say that there has to be growth in India in the paper industry. The major raw material will continue to be recovered paper, whether it is imported or domestic. Domestic collections and infrastructure will eventually improve, so we will be able to utilize more and more of the waste we generate within the country and import it to countries like America and the UK that have surplus waste paper that they will continue to ship to India because India is now the largest market. Even though China has banned recovered paper, they continue to buy large volumes via their operations in Southeast Asia in terms of recycling pulp.
I must mention here that there has been a big announcement by ITC: they are putting up an INR 4,000 crore investment in Uttarakhand to come up with the integrated pulp and paper mill, so this is one of the major expansions that we have seen recently in terms of integrated pulp and paper mills, but having said that, the majority of the requirements of India would be fed with imported and domestic waste paper.
Q: India consumes large quantity of imported waste paper. There are new large capacities coming up in the Europe and America and they will also consume waste paper. Will it be difficult for Indian Paper mills to get the raw material at a lower price? how do you see that this situation?
Let me put it this way: globally, pulp and paper production is over 400 million tons, and on average, there is a 5-7% growth in terms of production and consumption. Also, that will finally relate to the generation of waste paper, and China is indirectly importing by setting up mills across the world to make recycled pulp and send it to their plants in their home country, and China has been a major player not now but from day one. In fact, when they stopped importing waste paper, they were a 50% net importer of waste paper from all over the world, and now slowly, by setting up these mills, they will scale up to their 50% recycle pulp thing, but the rest of the 50% is available for the other countries, and India, also being a major pulp and paper industry, is growing very well.
I think there should not be any challenge in getting volumes of what we want, and our domestic collection is very low at the moment in terms of what you see in Germany and Japan, which is touching about 70 to 80%. Mills who are making paper from virgin pulp or they're importing market pulp, so that waste also eventually gets into the stream and is available for the mills for recycling, so I don't see much challenge.
Q: There's a severe fluctuation in the waste paper prices. How a paper mill can ensure the sustainability in its supply for the imported recovered fibre with the lower price ?
Prices are something that is 100% based on market demand and supply. We have seen lately the volatility on two accounts. Let's say when we talk about waste paper prices in the USA, we have seen a lot of large mills or groups like Cascades and Domtar converting their machines into brown paper, producing test liners and flutings, so there's a lot of demand from those mills. These are large mills that have been converted, and also from the point of view of sustainability, people are tending to use more recycled paper than virgin paper, so obviously there has been good demand within the country, which has driven this price to be on the higher side, but if somebody wants to import at this price, waste paper is available.
The cost of any waste paper being imported into the country, there is I would say 60 to 70% fiber and 30% shipping cost so shipping has been a very down after the Covid, this so something of the compensate to the net CIA prices.
Q: There are new capacities in Pulp generation coming in overseas market; we might see the dumping of pulp in to Indian market at lower price. Do you think that it will hamper the profitability of Indian paper mills?
I don't hear much major expansion in the pulp segment across Asia; in fact, major producers in Asia like APP and April are putting machines after machines; they're also expanding in the tissue segment very aggressively, and they're trying to consume all their pulp. The only thing is that the availability of pulp from these mills to the market is not there as much. I don't see major expansions there. India will have to when they have to import market pulp. Most of the mills, which have their own integrated operations, are also facing challenges with wood prices. This volatility in pulp has also been there laterally. We saw hardwood pulp prices going sub-$500, and now we are talking about $600+. Now, China’s economy is pretty closed in terms of various growth elements. Once they wake up, there's probably going to be huge demand from China. Once China stops buying paper, prices go down, so I feel this challenge of volatility in prices, be it waste paper, pulp, or paper, is going to be there, and we have to get used to it.
Q: Imported pulp is a one of the raw material for paper mills, what appreciation do you project in the demand of imported pulp in next 5 years? Also do you think that tableware manufactures could be the new consumer of the imported pulp in future?
I am not very knowledgeable about this, so I can't say much, but I can say that the mills that don't have enough pulp capacity compared to their machine capacity are the main users of market pulp. On the other hand, non-wood paper mills require a specific percentage of long fiber to supplement their furnish. Most large paper mills are primarily covered by their own pulp operations. Thus, there hasn't been a significant growth. We do hear about Satia Industries expanding a machine and other things, but that hasn't really altered the dynamics of pulp demand in India. BCTMP pulps are the only area where there is a significant need for pulp that has grown over time.
A lot of mills are coming into BCTMP pulp, and there has been a greater demand for all the pulps in BCTMP. BCTMP soft food has to be imported, but all the big mills in India are setting up their own pulp lines to make their own BCTMP hardwood, but then softwood has to come from North America or Scandinavia. So, demand in Europe and China or within North America has not grown as much, so this pulp is available to all these mills, but again, prices go up and down depending on whether China is in the market or not.
Q: As claimed by some paper mill association, that excess import of paper is hampering the small & medium Paper mills viability; How would you define this situation?
I don't want to comment on anything that will lead to a controversial discussion, but I think the open economy is always better than a protected economy. It gives a chance to improve your operations, and that eventually leads to longevity in the business. If you are in a protected environment, in a sense, you're not exposed to the international situation, and eventually you will get exposed regardless of how much you protect your economy. So I can only comment that I'm from a school where I would vote for an open economy, but I would not get into deeper details about whether there should be anti-dumping duty or not.
Q: Don’t you think that there has to be a level playing field for importer and paper mill; import of paper should be at a benchmark price in order to prevailing healthy market competition. Your comment please.
Anybody can have a different perspective, so today we are signing up ‘N’ number of FTAs (free trade agreements) with different countries around the world to increase trade between us, and then, as an ASIAN region, we want this region to develop to be known as Europe of Asia or North America of Asia. We would want to trade more within Southeast Asia, so that's why we have a zero import duty. Today we are seeing mergers of industry across the world, like, in a sense, recently, Smurfit Kappa and Westrock are merging, so this will create a giant, but at the same time, it will also give room for other players to expand. Today they used to compete and whatever the end result of all that competition was, but now they're going to work together and they're going to play with the market, but at the same time, there are other groups also around the world, so they will have a strategy to put in place, so that doesn't mean that this will lead to something bad.
Andhra Paper declares a lockout at the manufacturing plant of its Rajahmundry Unit due to an illegal strike, resulting in losses of INR 1.95 Cr per day
East Godavari, Andhra Pradesh | 25 April 2024 | The Pulp and Paper Times:
In a recent development, the Board of Directors of Andhra Paper Limited (APL), a prominent player in the paper and pulp industry, has decided to declare a lockout w.e.f. April 24, 2024 at 3.00 P.M. at the Rajahmundry Unit and it shall continue till further notice in this regard.
In a letter submitted to BSE by Andhra Papers said, that operations of the Manufacturing plant situated at Unit: Rajahmundry had been disrupted due to illegal strike of the workers called by the Workers Trade Unions w.e.f. April 2, 2024.
The Management said, that due to their continued illegal strike and unlawful activities of stoppage of work and considering the prevailing situation and keeping in mind the safety of employees, plant and machinery, materials and other assets, the Management has decided to declare a lockout w.e.f. today i.e., April 24, 2024 at 3.00 P.M. at the said Unit and it shall continue till further notice in this regard.
“The reasons for Lockout is illegal strike with unreasonable demands and Non co-operation of workmen to resume manufacturing operations” the letter said
The Management said the due to this strike APL is bearing loss of production per day approximately, INR 160 lacs per day (total , 195 lacs per day for the Company as a whole)
"The Management under the prevailing conditions & continued stoppage of plant operations, hereby declare Lock-out in the Mills w.e.f. 24.04.2024 from B-Shift i.e., 03.00 PM onwards excepting the essential services and support / allied services (as per the list at Annexure-II) and also Works Office, Industrial Relations, Welfare i.e., Township Maintenance & Sanitation, Transport, Sewerage Treatment Plant, OHC Medical Centre and Security & Fire Fighting departments", a notice stated.
Earlier, In a letter to SEBI, APL said, In continuation of the intimation vide our letter dated April 3, 2024 we would like to inform you that, the operations of the Manufacturing plant situated at Kadiyam Unit, East Godavari has been temporarily shut down on April 15, 2024 owing to non-availability of pulp from manufacturing unit at Rajahmundry where the illegal strike by workmen called by the workers unions is continuing since April 2, 2024. The Kadiyam unit will resume operations as soon the pulp supply is restored.
Management has appealed the striking workmen to call off and resume the duties and to restore the normalcy for further negotiations/discussions. Defying the management appeal continuing the illegal strike is accumulating the operational business losses which will impact on the Company's survival. It is also noted that the striking workmen abetting and intimidating the staff & other loyal workmen who are attending their duties.
Kadiyam unit is dependent on Pulp Supply from Rajahmundry Unit where Pulp production stopped due to ongoing strike since April 2, 2024.
Mohit Paper Mills gives unexpected return and growth in sales and profits; decides to install Boiler and Evaporator to increase the capacity
- The Company has turnover (Net) of Rs. 22,216.5/- (In lakhs) as against previous figure of Rs. 14,079.85/- (In lakhs), the Company recorded increase in sale 57.79% (approx) in FY 22-23
- The management decided to install 150 TDS Boiler and Evaporator (“BE”) in the production line, the purpose to install this BE to increase the production with existing production capacity
The Pulp and Paper Times:
Mohit Paper Mills Limited is engaged in manufacturing of various kinds of paper like Writing Printing Paper (colour and white), MG Poster paper, kraft paper and others various quality papers as required on customer demand. MPML is agro based Company using agro product for manufacturing the final product i.e. paper like Bagasse and other agriculture waste product which are abundantly available in the vicinity of the manufacturing unit.
the last previous financial year Mohit Paper has sustainable growth in term of sale as well as in term of profit, The total revenue was INR 222 coror (approx) which is compare to 140 crore rupees (approx) in last year, which is recorded growth 57 % (approx) where as growth in term of term of income MPML has recorded INR 4 crore (approx) profit as compare to INR 1.98 crore (approx) in earlier year, so that profit growth is 150% (approx), growth in the profit, with respect to the projection of 24 months.
MPML’s annual report stated that company is on expansion mode and setting up new recovery boiler in premises by installation of that recovery boiler production cost will be lower down simultaneously adding the additional stem. By making installing this boiler the profitability of the company will be increase by reduction of the cost.
At present the production capacity of the Mohit Paper is 130 MT/per day and the Company always try to utilised it’s maximum production capacity. In the financial year 2022-2023 the management decided to install 150 TDS Boiler and Evaporator (“BE”) in the production line, the purpose to install this BE to increase the production with existing production capacity. The idea behind to install BE is that to increase the production of steam, power and caustic soda lye and result of this increment in steam, power and caustic soda, the production will be increased within the existing production capacity. After installing the BE, the Company can utilized its optimum or maximum production capacity.
The management of the Mohit Paper always keeps keen eyes on every transitions of the Company. MPML is moving fast to maximization the wealth of shareholders and stakeholders. In paper industry MPML is regularly exploring and critically appraising its domestic market, the company saw downfall in respect of revenue and other aspect in the last year ( FY 21-22) due to stiff competition in the market. The Company has maintained good standards in its products and always be trying to give sharpness to the Company’s marketing strategies
At present new machines come with various facilities helping to improve the efficiency and financial viability of mill. Your Company is always in search of such opportunities and is in the process of increasing its capacity and quality improvement. In the near future the Company is in the process of increasing its capacity.
Segment or product wise Performance:
During the year FY 22-23 Mohit Paper has achieved the good level of capacity utilization with respect to the manufacture of the paper and it was done due to the expertise of the Managing Director, the technical staff and the hardwork of labourers. This is a good example of proper utilization of the capacity with minimum resources. The company is engaged in single segment of production i.e. manufacturing of paper, more than 98% of the turnover are depend paper segment. In relation of financial performance of the segment are: The Company has turnover (Net) of Rs. 22,216.5/- (In lakhs) as against previous figure of Rs. 14,079.85/- (In lakhs), the Company recorded increase in sale 57.79% (approx).
During the financial year 2022-2023, the Company gives unexpected return and growth in sales and profits. The Company has recorded immense growth during the year under review. The Company has turnover (Net) of Rs. 22,216.5/- (In lakhs) as against previous figure of Rs. 14,079.85/- (In lakhs), the Company recorded increase in sale 57.79% (approx) further the Company recorded other Income in the respective year of Rs. 411.03/- (In lakhs) as against previous figure of Rs. 185.79/- (In lakhs), the Company recorded increase in other income 121.23% (approx). As total income of current year is Rs. 22,627.53/- (In lakhs) and previous year was of Rs. 14,265.64/- (In lakhs), the Company recorded increment of 58.61%.
Net profit and PAT (Profit after Tax) was Rs. Rs. 491.56/- (In lakhs) as compared to previous year figure of Rs. 196.14/- (In lakhs) reporting an increase of 150.62% (approx) in net profit as compared to previous year
Future of Paper Industry
In current days paper is best option and demand of paper increased day by day, the demand of paper due to many reasons, which are:
Anti-Plastic thinking: There is either a reduction or elimination of the use of plastic in packaging. Antiplastic sentiment encourages biodegradable pulp and paper alternatives. This movement is being pushed forward by various government agencies as well as citizens who are concerned about their health. The problems caused by plastic present a wealth of opportunities for the paper and pulp manufacturing sector.
The rise in online market: In global markets are seeing an increase in the sale of products online day by day. It is anticipated that this pattern will carry on furtherance of years. Because of the proliferation of online shopping, packaging has had to develop to make the most efficient use of shelf space. There has been an increase in the demand for raw materials and corrugated boxes.
Food-packaging: The food packaging industry is undergoing change. Recently, there has been a rise in demand for packaging that is resistant to grease. This component can be found in a wide range of different packaged goods and restaurants and paper is used to packaging the food.
Archroma unveils groundbreaking PFAS-Free barrier coating for oil and grease applications
Pratteln, Switzerland, 19 March 2024 - Archroma, a global leader in specialty chemicals towards sustainable solutions, announces the launch of the latest innovation in their Cartaseal® portfolio, Cartaseal® OGB F10.
Cartaseal® OGB F10 is a superior water-based oil and grease resistant barrier coating that enables papermakers to provide high-quality and sustainable packaging by replacing fluoro based substances and polyethylene with a recyclable and repulpable coating. It is FDA and BfR compliant, making it suitable for the manufacturing of paper and board for food and non-food contact.
Key features and benefits of Cartaseal® OGB F10 include:
Superior oil and grease barrier: Offers unparalleled protection against oil and grease, ensuring the integrity and freshness of packaged goods. Its advanced formulation guarantees maximum resistance, providing peace of mind for both manufacturers and consumers.
Exceptional resistance even when folding: Provides superior oil and grease resistance (OGR) for folding box board and flexible paper packaging application, without compromising on performance.
Recyclable and repulpable: Facilitates easy recycling and repulping processes, contributing to a more sustainable packaging lifecycle. In addition, as it contains bio-based raw materials, Cartaseal® OGB F10 supports brands and papermakers in their journey towards sustainability by minimizing reliance on oil-based substances.
"We are excited to introduce Cartaseal® OGB F10 to the market, our latest barrier solution that addresses key challenges in the packaging industry while upholding our commitment to sustainability," said Sameer Singla, CEO PP&C at Archroma. "With its unmatched oil and grease resistance, exceptional foldability, and sustainability features, Cartaseal® OGB F10 represents a significant advancement in packaging technology, empowering businesses to meet evolving consumer demands while reducing their environmental footprint."
Cartaseal® OGB F10 sets a new standard for packaging excellence, offering a comprehensive solution that prioritizes functionality, sustainability, and performance.
Archroma remains committed to driving innovation and sustainability across the value chain, empowering businesses to embrace greener practices and meet evolving consumer demands.
Red Sea Crisis: Domestic players to build trust and listen to the customer rather than frequent price increases
- India’s imports of paper and paperboards are largely from South East Asian Countries and China
- The impact of Indian Paper Industry shall be very minimal as the pulp, mainly hardwood pulp comes mainly from Indonesia and South America
The Pulp and Paper Times provides a brief analysis of the Red Sea Crisis and its implications for the paper sector. India is a significant importer and exporter of various paper goods, including pulp, finished paper, waste paper, and other types of paper. This crisis could have an effect on the market's price structure and put the sector in disarray. We conducted in-depth analyses of the Red Sea situation and spoke with a number of prominent figures in the paper sector. Here are the opinion of Mr Aseem Bordia, who is the Immediate Past President of the Federation of Paper Traders Association (FPTA) for the year 2022-2023. The views are personal
It is a fact that global supply chains could face severe disruption as a result of the world's biggest shipping companies diverting journeys away from the Red Sea. Attacks by Houthi rebels in Yemen on commercial vessels in recent weeks have resulted in many firms deciding to avoid one of the world's busiest shipping lanes. The Houthi group has declared its support for Hamas and has said it is targeting ships travelling to Israel, though it is not clear if all the ships that have been attacked were actually heading to Israel.
The group, which is backed by Iran, has been using drones and rockets against foreign-owned vessels transporting goods through the strait of Bab al-Mandab - a 20-mile-wide channel that splits Eritrea and Djibouti on the African side and Yemen on the Arabian Peninsula.
Ships usually take this route from the south to reach Egypt's Suez Canal further north. (Check above image)
BBC news of December 26th,states that Danish shipping giant Maersk has said it is preparing to resume shipping operations through the Red Sea and Gulf of Aden. The move follows the deployment of an international military operation to prevent attacks on commercial ships by Yemen's Houthi rebels.German shipping firm Hapag-Lloyd has said it will decide on Wednesday, December 27th whether to resume using the route.
The Red Sea is one of the world's most important routes for oil and liquefied natural gas shipments, as well as for consumer goods.It is bookended by the Bab al-Mandab Strait - also known as the Gate of Tears - in the south near the coast of Yemen and the Suez Canal in the north.
The alternative route, around the Cape of Good Hope, adds about 3,500 nautical miles to the journey. This has led to fears of disruption to the supply of goods transported through the Suez Canal, and an increase in prices to cover the higher transport costs.
The news that shipping companies were avoiding the Red Sea route led the US to launch an international naval operation - named Operation Prosperity Guardian - to protect ships.
In a statement issued on Sunday the December 24th, Maersk said that with this initiative under way, "we are preparing to allow for vessels to resume transit through the Red Sea both eastbound and westbound"."We are currently working on plans for the first vessels to make the transit and for this to happen as soon as operationally possible."However, the world's second largest shipping company added that although security measures had been put in place, "the overall risk in the area is not eliminated at this stage". "Maersk will not hesitate to re-evaluate the situation and once again initiate diversion plans if we deem it necessary for the safety of our seafarers," it said.
Other shipping giants including Mediterranean Shipping Company (MSC), CMA CGM and Hapag-Lloyd have also been avoiding the Red Sea route because of the increased threat of attacks.
On Tuesday the December 26th, Hapag-Lloyd said it would re-assess the situation in the Red Sea on Wednesday the December 27th, before deciding how to proceed.Last week, the company had said it would redirect 25 ships by the end of the year.
The impact of Indian Paper Industry shall be very minimal as the pulp, mainly hardwood pulp comes mainly from Indonesia and South America. The softwood pulp though coming from Europe and North America would have some slight impact. Waste paper imports are largely from middle east countries with little impact, whereas some quantities from United States and Europe could face the heat. However, one should keep in mind two factors, first the imports are contractual and are contracted for 2-3 months in advance and secondly the shipping lines are already making plans to move back their operations to the old shipping route.
It is very unlikely that the prices of imported recovered fibre for India to witness a rise in price in the short term because of temporary shipping disruption. The shipping disruption is short term and temporary in nature. Similarly, the imported pulp prices would not witness a disruption as their shipping routes are not disrupted and for softwood pulp even if the shipping routes are disrupted, they are for very short term and reopening.
India’s imports of paper and paperboards are largely from South East Asian Countries and China. The shipping route from these countries remain unaffected. It is very unlikely that the big paper mills would be able to reap any extra benefit on the account of disruption in supplies of imported paper as there shall be no such disruptions.
The shipping disruption has been for a few days and it is very likely to be restored in a few days. The domestic markets are unlikely to witness a price increase on this account as the disruption is short term and shall not have any impact on the existing contracts of pulp and recovered paper. The shipping lines have already made plans to move back to the old shipping route.
It is imperative for the domestic players to understand that it is important to build trust and listen to the customer rather than frequent price increases. Also keep the prices of domestic paper in tandem with the imported paper.
Vipul Organics clinches INR 7.15 crore deal for pigment dyes supply to TNPL, bolstering industry presence
The Pulp and Paper Times | 4 March 2024:
Vipul Organics Limited, leading Specialty Chemicals company in the pigments and dyes segment, today announced bagging an order from TamilNadu News Print and Paper Limited(TNPL). The order from TNPL is worth Rs. 7.15 Crore to supply Blue and Violet Pigment Dye.
Paper Dyes is a new category of business that Vipul Organics ventured into only in 2022, after spending 18 months on product innovation. SunPulp Dispersions and SunDirect Dyes are a result of the painstaking R&D into the segment and have been appreciated by the industry. In addition, at Paperex 2023, Vipul Organics launched SunIonic range of modified Basic Dyes / Cationic Dyes developed specially for paper customers who have Size Press as well as a series of Colorants which can replace the traditional dyes in paper coating application.
“Within 2 years, we have become the preferred colorant suppliers to the paper industry. It is exciting to be able to meet the requirements of the industry and be known for our innovative, high quality products for the industry”, says Mr. Mihir V Shah, Executive Director, Vipul Organics Limited.
“This order is an endorsement of the quality of our products developed for the Paper Industry. We are on course to meet our target of Rs. 50 crores from this sector over the next 3 years. We received a strong positive response to our offering for the Paper Industry through participation in B2B shows of the industry. We have been busy converting our trial orders to full orders”, he adds.
In India, the dyes and pigments segment is expected to witness high growth in the Paper sector due to expanding packaging and printing industries.
About Vipul Organics Limited:
Vipul Organics Limited is a leading Specialty Chemicals company in the Pigments and Dyes segment. Today, it is amongst the foremost manufacturers of Pigments, Dyestuff, Lake Colours and Pigment Intermediaries / Fast Salts in the country. It has 3 manufacturing facilities spread across Maharashtra and has global footprint in over 50 countries. Vipul Organics ended the financial year 2022-23 with revenues of Rs.134 Crore.
Paper & Tissue One Show: MENA Pulp Week, B2B meetings, Conference on Sustainability and Pulp On April 15-18, 2024
The 9th International Paper Industry Exhibition -Paper & Tissue One Show will be held on April 16-18, 2024 at the most prestigious exhibition complex in the United Arab Emirates - Abu Dhabi National Exhibition Centre (ADNEC) with the full marketing support of the UAE Government.
Paper & Tissue One Show 2024 will bring together more than 210 manufacturers and suppliers of 60 categories of paper products and services and more than 16,000 visitors from 110 countries.
In addition to a wide range of exhibitors from different parts of the world, the show will include Indian, Russian, Chinese, Turkish and Italian pavilions with a strong representation of top national companies.
On April 15-18, 2024 the «Paper & Tissue One Show 2024» will also feature MENA Pulp Week, a series of B2B meetings, Conference on Sustainability and Pulp, and the Paper Industry Leaders Meeting, enabling attendees to share best practices and conduct business negotiations with international partners.
Conference speakers include Tom Wright and Brian McClain, world authorities on pulp and paper market analysis. Russian speakers have also been lined up for the conference and a strong Russian presence is expected at the Leaders Meeting.
This year, in parallel with the «Paper & Tissue One Show», the World Future Energy Summit, dedicated to sustainable development, will be held at the Abu Dhabi National Exhibition Centre on April 16-18, 2024. Badges obtained by visitors to one exhibition will entitle them to visit the other free of charge, which will have a positive impact on the total number of visitors and increase the opportunities for business development between the two industries.
The organisers invite Indian companies to participate in the 9th «Paper & Tissue One Show» as exhibitors and visitors.
Indian companies are also invited to participate in other events held in the framework of the exhibition.
For any enquiries, please contact the organisers at : elena.savilova@paperoneshow.net.
Nine Dragons decreased average selling price of paper approx 15% in FY 23 due to sluggish market; headwinds remain in play
- Sluggish market forced to lower prices to promote sales and suspend production several times
The Pulp and Paper Times:
The pandemic containment measures and sluggish post-pandemic economic recovery in mainland China, has decreased the revenue of Nine Dragons Paper (Holdings) Limited, One of the largest paper manufacturing group worldwide by 12.1% in FY2023.
In the financial report issued by Nine Dragons, stated, the insufficient domestic demand and consumption as well as the shrinking export market imposed significant constraints on both the demand of packaging paper and its prices, which therefore had continued to weaken. Meanwhile, unfavourable factors such as global inflation, fluctuations in energy prices, US dollars interest rate hikes and intensified import competition had adversely affected the profit performance of the Group.
“In view of such challenging operating conditions, the Group adjusted its operating strategies from time to time by actively reducing costs and inventories, and strengthening working capital and cash flow management. At the same time, we responded to market demand by taking the initiative to develop new products and find new customers, while utilizing alternative raw materials to increase our competitiveness. As a result, we saw a slight increase in sales volume during the Year. However, as sluggish market forced us to lower prices to promote sales and suspend production several times to reduce inventories, we recorded a loss this year for the first time since our listing” the report stated.
In order to achieve sustainable development and lay a solid foundation for driving profitable development in the long run, a number of the Group’s capacity expansion projects for paper production and raw materials have started production as scheduled during the Year. As of 30 June 2023, the Group’s total design production capacity for fibre raw materials amounted to 4.62 million tpa (wood pulp of 2.17 million tonnes, recycled pulp of 0.70 million tonnes and wood fibre of 1.75 million tonnes), and the total design production capacity for paper amounted to 20.02 million tpa, while the total annual design production capacity for downstream packaging plants exceeded 2.8 billion sq.m.
Capacity Expansion Plan
Sourcing high-quality raw materials is fundamental to the development of a paper making enterprise, and is also the key to cost control. As such, the Group has been actively expanding the supply of raw materials. Upon the completion of all projects, the Group’s total design production capacity for fibre raw materials will reach 6.83 million tpa (wood pulp of 4.07 million tonnes, recycled pulp of 0.70 million tonnes and wood fibre of 2.06 million tonnes), which will give better play to the advantages of its vertical integration of the production chain.
Besides, optimization of product mix and improvement of structural profitability have become the main direction for future development of the Group. A number of our domestic and overseas capacity expansion projects for paper production are underway, including the production capacity expansion projects for virgin kraftliner, printing and writing paper and bleached folding boxboard. These projects are expected to add new production capacity of 4.25 million tonnes to the Group upon commencement of production, bringing the total design production capacity for paper manufacturing to reach 24.27 million tpa by that time.
Revenue
The Group achieved a revenue of approximately RMB56,739.4 million for FY2023, representing an decrease of approximately 12.1% as compared with FY2022. The major contributor of the Group’s revenue was still its packaging paper business, including linerboard, high performance corrugating medium and coated duplex board, which accounted for approximately 89.9% of the revenue, with the remaining revenue of approximately 10.1% generated from its printing and writing paper, high value specialty paper and pulp products.
The Group’s revenue for FY2023 decreased by approximately 12.1% as compared with FY2022, resulting from the net effect of the decrease in average selling price of approximately 15.0% and the increase in sales volume of approximately 3.4%. Revenue of linerboard, high performance corrugating medium, coated duplex board and printing and writing paper for FY2023 accounted for approximately 49.5%, 25.5%, 15.0% and 8.3% respectively of the total revenue, compared to 49.3%, 25.3%, 18.2% and 5.7% respectively in FY2022.
The Group’s annual design production capacity in packaging paperboard, printing and writing paper, and high value specialty paper and pulp products as at 30 June 2023 was approximately 22.9 million tpa in aggregation, comprising approximately 12.6 million tpa of linerboard, approximately 3.4 million tpa of high performance corrugating medium, approximately 2.6 million tpa of coated duplex board, approximately 1.1 million tpa of printing and writing paper and approximately 3.2 million tpa high value specialty paper and pulp products. The four US mills capacity of approximately 1.3 million tpa, including of approximately 0.9 million tpa coated one-side, coated freesheet and coated groundwood grade for printing and writing paper and specialty paper products; and of approximately 0.4 million tpa recycled pulp and wood pulp products.
The majority of the Group’s revenue continued to be realised from the China market, in particular from the linerboard and high performance corrugating medium sectors. For FY2023, revenue related to China consumption represented 89.0% of the Group’s total revenue, while the remaining revenue of 11.0% represented overseas sales to customers in other countries.
Future Outlook
As we look forward to the post-pandemic era, there will be both opportunities and challenges. Despite headwinds remain in play over the current business environment, such as the unresolved geopolitical crises and the contraction of overseas economic activities which are unfavourable to export business, the Chinese Central Government has scaled up its policy support for the development of private economy, giving the Group the confidence that both domestic demand and consumption will pick up further while the industrial economy will continue to stabilize and improve. In the mid-to-long term, market drivers such as opportunities arising from both the trend of replacing plastic with paper and consumption upgrades as well as the tightened raw material supply will further strengthen the Group’s competitive advantages of integrated pulp and paper production, which will be beneficial to enhancing its market share and gradually achieving steady operation and profitability.
The Group will strive to strike a proper balance between production and sales, and push forward the raw material expansion plans. It will also cater to the market demand by developing innovative products and, at the same time, work on cost reduction and efficiency enhancement. With a focus on fostering profitable growth in the long run, the Group is committed to pursuing safe and green production, and will achieve a turnaround as soon as possible.
Century Pulp and Paper's Q3 revenue surges 24%, Foresees stable WPP demand in Q4 via Government Tenders
• Q3 FY24 Sales volume increased by 24% as compared to Q3 FY23.
• Sales Turnover in Q3 FY24 increased by over 10% as compared to Rs. 799 Cr. in Q2 FY24.
• Capacity utilization in Q3 FY24 was 104% as compared to 89% in Q2 FY24.
The Pulp and Paper Times | 2nd Feb 2024
Nestled at the foothills of the Himalayas in Lalkua, Uttarakhand, Century Pulp and Paper (CPP) stands out as a prominent player in the industry. With a strong focus on quality, CPP has established itself as a renowned producer of premium writing and printing paper, board, Rayon Grade Pulp, and tissue products. CPP reports a remarkable growth in its revenue for the Q3 FY24.
Commenting on the Q3 FY24 results, Mr R. K. Dalmia - Managing Director, Century Textiles and Industries Limited (CTIL) said- "The company has showcased a remarkable turnaround this quarter as a testament to its resilience. Stellar performance by Pulp and Paper business achieving higher production levels and sales volumes this quarter, as a result of various strategic initiatives.
CPP's submission to SEBI says, "Writing & Printing paper demand is expected to stabilize through government tenders in Q4. Adequate supply of Copier and Non-copier paper imports from ASEAN countries to impact price corrections despite marginal revival of seasonal demand. Exports demand expected to revive with better realization."
"The rise in Tissue paper demand is expected to sustain in Q4. Our focus would be more on improving domestic sales as well as strengthening export volumes for better realizations. Competitively priced imports from ASEAN countries are expected to marginally impact realization in domestic markets," it added.
Board demand to remain stable in Q4 with positive market sentiments in Pharma, FMCG and F&B sectors. Export demand expected to improve in Europe and USA markets. Overall export orders expected to increase in anticipation of price increases due to the supply chain disturbances caused by ongoing gee-political tensions.
Over the past year, the Pulp and Paper business has remained committed to the core values of Century Textiles and Industries Limited (CTIL) and has worked tirelessly to ensure that the vertical is on the forefront of the pulp & paper industry. The vertical does this by developing a good balance between commercial success and social and environmental responsibility
Andhra Paper to Expand Production with State-of-the-Art Tissue Paper Machine in Kadiyam Facility
East Godavari, Andhra Pradesh | The Pulp and Paper Times
In a recent development, the Board of Directors of Andhra Paper Limited (APL), a prominent player in the paper and pulp industry, has given its nod for the installation of a cutting-edge Tissue Paper Machine at its Kadiyam Manufacturing facility. The machine is set to have a daily production capacity of 100 tons, employing state-of-the-art technology to diversify the company's product portfolio.
The capital investment for this expansion is estimated to be Rs 270,00,00,000 (Rupees Two Hundred Seventy Crores only). APL has been a key contributor to the Indian paper industry since its inception in 1964, renowned for its production of high-quality specialty grade products, including writing and printing paper as well as paper boards.
The Board's decision follows its earlier in-principle approval to explore opportunities in the Tissue Paper segment, assessing commercial feasibility, technical viability, and obtaining necessary regulatory approvals. APL has successfully secured the "consent to Establish" from the Andhra Pradesh Pollution Control Board, a crucial step towards the installation of the tissue paper machine.
The proposed capacity addition is set at 35,000 Tons Per Annum (TPA) for the production of various grades of tissue paper, including facial tissue, toilet tissue, napkin, and towel grade tissue. The company anticipates commencing production within an estimated 15 months.
In a submission to the Securities and Exchange Board of India (SEBI), APL highlighted the factors driving this strategic expansion. The rise in urbanization, a heightened emphasis on hygiene driven by government initiatives like Swachh Bharat, and a steady increase in demand from the healthcare and hospitality sectors are anticipated to fuel the demand for tissue paper, napkins, and toilet and towel-grade paper consumption.
With this move, Andhra Paper Limited aims not only to meet the evolving market demands but also to reinforce its position as a leading manufacturer by incorporating the latest technology into its production processes. The expansion is poised to contribute significantly to the growth of the company and the Indian paper industry at large.
400,000 TPA: the new PM5 line is expected to double MEPCO’s overall production capacity and revenues
-MEPCO manufacture and distribute a wide range of high-quality containerboard and specialty paper products for the packaging, construction, and furniture industries
-Juthor tissue facility will satisfy 25% of the local market demand in its first phase of growth
-MEPCO’s largest-ever expansion, the PM5 facility, will be the fastest high-speed containerboard facility in the Middle East, adding an estimated production capacity of 400,000 tons
The Pulp and Paper Times:
The Middle East Paper Company (MEPCO) is the largest paper manufacturer in The MENA region. For over 2 decades, MEPCO has been on a journey of rapid expansion and diversification, while acting as a key driver of sustainability and the circular economy for the paper sector in the Kingdom of Saudi Arabia, in line with Saudi Vision 2030 and the Saudi Green Initiative.
Headquartered in Jeddah, MEPCO manufacture and distribute a wide range of high-quality containerboard and specialty paper products for the packaging, construction, and furniture industries across the Kingdom of Saudi Arabia and to over 50 markets globally.
In a remarkable period of progress, MEPCO’s total revenues of SAR 1.187 million in 2022 saw a year- on-year increase of 12.3%, leading to another record-breaking gross profit of SAR 503 million, up by a full 27.6%. Despite the global challenges of supply disruption, inflation, the Russian conflict with Ukraine, and the post-pandemic aftershocks, the Company has thrived in the face of adversity, using our market agility to supply the local market rather than focus on our international channels.
“Our strategic vision will strengthen our position as the leading paper and packaging producer in the Middle East and create even greater opportunities to reinforce our global presence, echoing Vision 2030 for the wider benefit of the Kingdom of Saudi Arabia. While we take giant strides towards our expansion targets, we will continue to adhere rigorously to the strict criteria of our strategic growth. For more than 20 years, we have understood our market, anticipated demand, delivered solutions, and contributed to the national economy. Our successes have consistently mirrored our objectives” stated by Mr. Musaab Al Muhaidib, Chairman of MEPCO in the annual report of year 2022.
On the future expansion plan, Mr Musaab informs that we continue to invest strategically for the future. The new PM5 production line is the largest expansion in our history, with the potential to double both our capacity and sales revenues; Juthor tissue facility will satisfy 25% of the local market demand in its first phase of growth. These are remarkable times for MEPCO as we build on our operational excellence, delivering a greater variety of products to our customers, more opportunities for our employees, and better returns for our Shareholders.
The annual reports said that with the PM5 facility, we will effectively double both our capacity and revenues in a growing market, widening the space between ourselves and our competitors exponentially. In addition, our investment in technology and digitization has been instrumental in our cost optimization and operational efficiency. Our cutting-edge digital solutions provide data-driven insights to ensure we are streamlined as an organization and innovative as a manufacturer, positioning MEPCO for strong and sustainable growth moving forward.
MEPCO will focus on lightweight containerboard grades, with a total investment of SAR 1.5 billion and an approximate internal rate of return of 15%. With an estimated production capacity of 400,000 tons, the new facility is expected to double MEPCO’s overall production capacity and nearly double the Company’s revenues.
“We began 2022 with strong market demand and continued to capitalize on the increase in commodity prices for the first 9 months of the year, leading up to the Ukraine conflict with Russia and the global pressure on national economies. Despite the ensuing downward trend in international paper prices, we maintained our stringent strategy of efficiency and cost containment, limiting the inflation of our cost of goods sold to just 3% this year while achieving a 12% increase in annual sales revenue,” stated by Eng. Sami Al Safran, Group president at MEPCO.
Mr Safran further stated, “Our aspirations are taking shape at a rapid pace. MEPCO’s largest ever expansion, the PM5 facility, will be the fastest high-speed containerboard facility in the Middle East, adding an estimated production capacity of 400,000 tons. While we focused our 2022 production largely in the domestic market, in order to avoid rising shipping costs and logistics challenges, our global presence continues to expand. With the PM5 technology providing a 100% increase in our containerboard capabilities, we anticipate a surge in new opportunities and new markets.”
“Looking ahead to 2023 and beyond, our Juthor plant will begin production, marking the start of a vast new revenue channel as we diversify our products as never before. We will continue to drive forward our PM5 project, which will transform the Company in terms of capacity and market expansion.” Mr Safran said.
In 2022, the Saudi paper market experienced robust development, emerging as one of the fastest-growing markets worldwide. It is projected to witness substantial growth from USD 2,206 million in 2023 to USD 2,709 million by 2028, representing a Compound Annual Growth Rate (CAGR) of 4.20% forecast over this period. This growth can be attributed to several factors, including an increasing emphasis on sustainability and a growing shift away from single-use plastic packaging towards alternative packaging solutions.
In an unsettling year of rising oil prices, global logistics challenges, and geopolitical unrest, MEPCO still achieved double digit growth across key results in the financial year through robust operational efficiency and the ability to respond to market dynamics with agility and persistence.
“Due to increased shipping costs and a disrupted supply chain, MEPCO focused more on the local market in 2022. This accounted for 60% of sales, while we remain safe in the knowledge that we have the agility, capacity and geographical advantage to renew greater emphasis on our international market with immediate effect,” The report stated.
Market Expansion and Retention
MEPCO sales and marketing teams have been instrumental in its groundbreaking successes, expanding customer base with more than 50 local, regional, and international new clients as well as eveloping presence in the Americas.
MEPCO forged a series of alliances, including partnerships with Fastmarkets RISI and Fastmarkets FOEX to incorporate the GCC containerboard price index as well as the international price index to monitor changes in global industry prices more accurately and react accordingly.
In partnering with SAP, MEPCO are transforming and enhancing digital services, automating and aligning core internal business processes, broadening B2B customer experience, and deploying e-solutions. This will drive rich omnichannel content management and customization as we expand beyond our ever-growing footprint.
An Overview of major ‘End Use’ Industries for Paper packaging
- Advanced paper packaging solutions are likely to help the market because paper is an excellent recyclable and sustainable material
- Food production in India has increased by 9.6% and beverage production raised by 6.2% in 2023
- The performance of pharma exports in FY22 has been robust, sustaining growth despite the global trade disruptions
The below article is extracted from the book ‘Indian Paper Industry- Insights & Futuristic Dimensions’, which was prepared for Indian Agro and Recycled Paper Mills Association ( IARPMA) jointly with Eupraxia Advisory Private Limited & Inpaper International
The Pulp and Paper Times
Based on end use industry, the packaging segment is expected to maintain its dominance in the pulp and paper market. The packaging category continued to hold the largest position in the worldwide pulp and paper market due to the rapid globalization of the e-commerce and retail sectors. There is a great need for both wrapping and packaging paper. Additionally, consumers and businesses in developing economies are embracing paper packaging items due to a growing awareness on the environment. Paper packaging is in greater demand in the food and beverage industry due to its ease of recycling, potential to reduce air pollution, and ability to clean the environment. The development of packaging has had a considerable impact on soft drink consumption. The pulp and paper sector are expected to thrive because of an increase in consumer knowledge of the adverse environmental effects of plastic and the eco- friendliness of paper packaging made from fibre crops.
The printing segment is anticipated to increase significantly. Due to a predicted upward swing in the education sector, enrolment, bettering including rising literacy rates, and an increase in the number of schools and colleges, the need is likely to increase. Newsprint demand growth is anticipated to be supported by rising literacy rates, expanding circulation, and an increase in the quantity of newspapers and magazines. Food production in India has increased by 9.6% and beverage production raised by 6.2% in 2023.
Online retailing is on the rise in India, due to the growing number of smartphone users and the quick internet adoption. This increases the demand for pulp and paper for packaging, as well as the rise of the e-commerce industry. Therefore, it is anticipated that the rapid expansion of online retail in India will support the expansion of the pulp and paper market.
Advanced paper packaging solutions are likely to help the market because paper is an excellent recyclable and sustainable material. Therefore, the packaging market's expansion in the upcoming years is anticipated to be boosted by the rising demand for eco-friendly packaging materials. Moreover, it is currently the most recyclable and environmentally friendly packaging material available. Customers and producers are both adopting more environmentally friendly paper packaging solutions because of increased environmental concerns. To achieve their sustainability objectives, leading companies in the food, cosmetics, and FMCG sectors collaborate closely with paper manufacturers to develop cutting- edge paper packaging solutions. This should aid in the expansion of the pulp and paper
To create a sustainable method of being environmentally friendly, a number of foreign countries have enacted a variety of regulations restricting the usage of conventional plastics. The demand for paper bags has also increased as a practical and cost-effective substitute for plastic bags. Because of all these restrictions and regulations, stores, supermarkets, and storage providers are more inclined to accept paper-based packaging.
Growth in Drugs and Pharmaceutical Industry
The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. India is ranked 3rd worldwide in the production of pharma products by volume and 14th by value. The sector is the largest provider of generic medicines globally, occupying a 20 per cent share in global supply by volume, and is also the leading vaccine manufacturer globally with a market share of 60 per cent. The performance of pharma exports has been robust, sustaining positive growth despite the global trade disruptions and drop in demand for Covid- 19-related treatments. The cumulative FDI in the pharma sector crossed the US$ 20 billion mark by September 2022.
Indian pharmaceutical exports achieved a healthy growth of 24 per cent in FY21, driven by Covid-19 induced demand for critical drugs and other supplies made to over 150 countries. The performance of pharma exports in FY22 has been robust, sustaining growth despite the global trade disruptions and drop in demand for Covid-19 related treatments. Carrying forward this growth momentum, drug and pharmaceutical exports during April- October 2022 was 22 per cent higher than the corresponding pre-pandemic period of FY20. Cumulative FDI in the pharma sector crossed the US$ 20 billion mark in September 2022. Further, FDI inflows have increased four-fold over five years until September 2022, to US$ 699 million, supported by investor-friendly policies and a positive outlook for the industry.
Moreover, as per the ICRA report, the GOI is planning to provide free generic medications to half of the Indian population through Pradhan Mantri Bhartiya Janaushadhi Kendra's at an estimated cost of USD 5.4 billion. In addition, the officials in September 2021 stated that India is open to work with East Asian partners on the development of generic pharmaceuticals and medical technology for the treatment of COVID-19 patients and vaccine development. This will further lead to an increase in the production of generic drugs in collaboration with other East Asian companies, thereby propelling the segment's growth over the coming years. Therefore, owing to the aforementioned factors, the generic segment is expected to witness growth at a faster pace than anticipated.
The above article is extracted from the book ‘Indian Paper Industry- Insights & Futuristic Dimensions’, which was prepared for Indian Agro and Recycled Paper Mills Association ( IARPMA) jointly with Eupraxia Advisory Private Limited & Inpaper International
Rastech Industries: launching a manufacturing venture for pulp and paper machines and planning to start operations by 2023
Our top 5 products are - Knife Gate Valves, Butterfly Valves, Ball Valves, Gate Valves and Globe Valves.
In an exclusive interview with The Pulp and Paper Times, Mr Sanjay Mishra, Managing Director, Regent Hitech Pvt. Ltd., shares his thoughts on several topics, including paper market, digitization in paper mill operation, and valves market analysis. He also discusses Regent’s future growth strategy, expansion and potential for new products. Here is the whole interview he gave.
The Pulp and Paper Times | 2023:
Q: Give us a brief introduction of Regent Hitech Pvt. Ltd. (RHPL)?
Established in the year 1996, we, Regent Hitech Private Limited, have emerged as one of the leading manufacturers and exporters of Knife Gate Valves, Butterfly Valves, Check Valves, Industrial Ball Valves, Globe Valves, Gate Valves, Gun Metal and Brass Valve. The wide assortment of valves offered by us is suitable for meeting the varied requirements of different industries like paper, sugar, power, and chemicals. Our equipment is supplied across the globe with the assistance of our sister concern since 1974. These products are highly appreciated by our clients for their durability, reliability, and improved functionality.
Q: RHPL is one of the major manufacturers and suppliers of valves in India. What is your quick review of the present state of paper trade market scenario?
With “Make In India” campaign; India has shown tremendous growth in manufacturing as well as e-commerce. Given the population and huge potential of consumption as well as exports, we continue to remain bullish on paper trade as paper is necessary for everything. There might be short term sluggish periods of growth in general as any industry or sector goes through but paper industry continues to stay resilient and overcome these small struggles in the long term perspective.
Q: what transformation in paper mill operation do you see in the next ten years?
Currently, India has Papermill average production at 200-300 Tonnes per / day / Machine; But we are expecting the plant sizes to grow to 500-600 tonnes per day which will have energy efficient equipments and less utilisation of water as well as Air pollution.
Q: What is the role of digitization in paper mill operation? Where does Indian Paper mill stand in this digital era?
Paper Mill Industry is heavily dependent on traditional manufacturing with heavy machinery; while many aspects of these machineries are automated, there is no digitisation in day to day operation of the mills. But the digital industry comes in very handy to reach out to our international as well as domestic clientele and connect with them; we also use these digital mediums for new customer acquisition and constant customer feedback. Digitization has made the industry global - For example, we are able to communicate with a small paper mill in Egypt and show them our innovation and techniques through Zoom and this helps us not only to expand our horizons but also tap on to the clientele like never before.
Q: How do you execute the training and support post-sale of your delivery to the paper mill? Please describe RHPL’s top five products used by paper mills
We have been in the Paper Mill Industry for 40 years and as an organisation have been known for our solution-centricity. Our regular as well as new clientele always give us constant feedback and points of improvement. We also have a dedicated team of 14 to 15 people who go for regular site visits within their allocated regions for proper training and execution of our products.
Our top 5 products are - Knife Gate Valves, Butterfly Valves, Ball Valves, Gate Valves and Globe Valves.
Q: Please shed some light on the Valves market post-COVID; what is the situation? How it is growing?
Covid was a tough time for all industries globally but as the saying goes “Tough times don’t last, tough people do” We are extremely blessed that the slowdown that occurred during the covid period was overcome shortly thereafter and we are back to projecting 15% year on year growth
Q: Any new technology on which you are working and will deliver to Paper Industry in the coming time?
Research and Development is a major part of Manufacturing. We are always looking for new and innovative ways to implement not just in our products but also the way we do things. Some of the projects that are currently underway are Valve Automation as well as manpower optimization.
Q: Recently, RHPL performed ‘bhoomi Pujan’ for setting up pulp-mill machinery manufacturing. Please describe your plan, capacity, investment and expected date of start up of this expansion.
As an entrepreneur, every new setup is a dream come true and we are grateful to start our sister concern RASTECH Industries Private Limited for Pulp and Paper Machine recently in Greater Noida and we are expecting to start operations by November 2023.
B: The plan is to expand our company to new horizons and bring in International conglomerates to partner with their technology and our understanding of on ground situations - we can overcome most obstacles and emerge as pioneers in the industry.
Q: There are some renowned manufacturers in pulp mill segment, what will be RHPL’s USP and strategy for capturing the market?
Technology, accuracy, experience, solution centricity and product optimisation are not just words for us but values we have stood by for the past 40 years. These values have been the pillars of our organisation and have resulted in making us stand out from our competition in the past and I am sure we will do the same in 40 more years to come.
Q: There has been a perception among the top paper mills of India that the international paper technology suppliers are better than the domestic suppliers. What reason behind do you see?
This argument while controversial still might stand true in some context. While in India, we have heavy dependency on our man power; our counterparts abroad have used technology to get ahead in the manufacturing process. But I still believe that India has the talent, we just need to funnel enough funds for R&D and technological innovation. In the recent past, I have visited many international paper mills and I am proud to say that we are on the right path to give them a tough competition in the future.
Q: Return on Investment (ROI) has become an important issue as the paper industry is a capital-intensive industry; being a capital equipment supplier, how does RHPL ensure Paper Mills that the investment they made is secure.
If I have to answer this in one word I will say “Experience”
Demand and supply chain is something we have learned the hard way - through making and learning from our mistakes.
Q: Any acquisition of companies by RHPL to expand in other segments please describe.
We do not use acquisition as a channel of expansion. We believe in setting up very strong and unshakable foundations for our business first and then venturing into smaller subsidiaries under the parent company so that our old and new businesses remain resilient and strong.
"From Q1 2024, the commercial scale production line will produce up to 12.5m paper bottles annually": Pulpex's CEO
- Pulpex bottles are sustainable, scalable, single-mould branded designs without material compromise
- We have no fundamental concerns about the cost of sustainable packaging
- Carbon footprint of Pulpex bottles is 90% less than glass and approximately 30% less than PET on a bottle-by-bottle basis
Recently, The Pulp and Paper Times spoke to Mr Scott Winston, CEO, PULPEX, and discussed the market scenario and various aspects of sustainable packaging, technological innovation to deliver much-needed and highly anticipated eco-packaging category change. Pulpex's patented technology enables brands to rethink their packaging proposition and achieve their sustainability goals. He discloses about the opportunity for fibre bottles and the consumer usage. Here are his full views:
Q: Please give us a brief Introduction of Pulpex and its operation.
Pulpex is a unique, first-of-its-kind, fully recyclable fibre packaging solution that uses technological innovation to deliver much-needed and highly anticipated eco-packaging category change.
Producing bottles that degrade readily in the natural environment, Pulpex's patented technology enables brands to rethink their packaging proposition and achieve their sustainability goals, whilst our partnership network gives us the ability to convert end-products at an industrial scale.
Never before has the collective need for sustainable and scalable packaging innovation been greater which is why Pulpex proudly partners with brand owners to deliver options that are more fit for purpose and which integrate into packaging manufacturers' existing infrastructure.
Q: Please shed some light on Pulpex's paper bottle and its sustainability.
Single-use packaging issues have reached an environmental tipping point. Globally more than 1.3 trillion glass and plastic bottles are produced each year and the volume of plastic waste entering our oceans is set to triple by 2040.
As we look at the opportunity for fibre bottles and the consumer usage occasions for them, we recognise that a fibre packaging solution will never be a viable direct replacement for all situations.
Pulpex allows brands to consider potential options for supplementing glass and PET bottles and, on many occasions, replacing its usage altogether. Pulpex bottles deliver significant improvements on the carbon footprint of glass bottles. The carbon footprint of Pulpex bottles is 90% less than glass and approximately 30% less than PET on a bottle-by-bottle basis. Pulpex bottles are also fully recyclable in standard paper/card waste streams, Globally, paper/card is recycled at a much higher rate than plastic.
Our unique offering harnesses the strength of sprayed barrier coatings which enable functionality vs end of life recovery and recycling and is why we are part of the 4evergreen cross-industry alliance.
Q: Moisture, gas, water, oil, and grease create a limitation in paper packaging. How much Pulpex trusts its coating solutions to overcome this limitation?
When Diageo developed the technology that would enable them to form 3D shapes from sustainably sourced wood pulp, they turned to technology partner BASF to help make this into a viable product. Wood pulp, when formed into a bottle shape, will not itself hold liquid, so a technological solution was needed. Not only must the bottle hold liquid, but it also needed to be recyclable through the existing paper waste stream. It quickly became clear that different liquids required different barrier properties, both to protect the product from the environment and to prevent it escaping from the bottle.
BASF and Pulpex have been working together to develop this concept in close conjunction with its corporate partners to define the precise performance criteria for each liquid. The underlying mission was to develop a bottle that was renewable, biodegradable and recyclable through existing paper recycling schemes. The resulting fibre bottle is lightweight and offers brand owners a sustainable, environmentally-friendly alternative to plastic and glass bottles.
Q: How does your paper bottle differ from the ‘Tetra Pack’, as both are used for liquid packaging?
Whilst we use the same renewable resources as many of our competitors, Pulpex does not use aluminium foils or other laminates.
Furthermore, instead of standard cartons, Pulpex bottles are customisable by shape and size and allow for embossing/debossing, labelling and direct printing with food-safe coloured pigments and dyes to fit any brand's needs.
Q: What does one understand about Environmental, Social & Governance (ESG) in Packaging? Why is it becoming more demanding nowadays? How Pulpex see ESG concept?
Packaging typically represents 50% of a company's Scope 3 emissions and hence plays a key part in an any corporate sustainability initiative. Pulpex is seeking to make a fundamental impact on this carbon footprint issue. Pulpex directly answers the problem of packaging performance matching its usage needs by creating fibre packaging solutions that deliver brand equity (customisable shapes, sizes and designs), technically perform (compatible with brand's existing filling infrastructure and standard paper waste streams) and, if not recycled, degrade readily in the natural environment leaving no unintended legacy.
Q: Any product’s impact comes not just from the product itself, but also from how it’s packaged and delivered to the customer. At Pulpex, how do you evaluate the perception of new-age consumers about compostable and sustainable packaging? Does the packaging keep an ‘edge’ on the Products?
Consumers’ respect for environmental issues and their changing behaviours are driving demand for renewable, recyclable, biodegradable and minimal plastic packaging. In fact, 61% of consumers are likely to switch to a brand that is more environmentally friendly than their current brand.
Furthermore, retailers are increasingly targeting zero-waste and circular economy principles for their packaging, while governments are taxing packaging materials and principles and that do not tackle or address these issues. As such, brands have all been seeking solutions, but economically viable and ready-to-go options have proven to be limited… until now.
Pulpex bottles are sustainable, scalable, single-mould branded designs without material compromise that significantly reduce the reliance of single-use plastics. With customisable shapes and designs, it offers all brands the opportunity to rethink their packaging proposition at scale.
Q: There have been more stories about the ‘Greenwashing’, especially for Paper Bottles and Food grade packaging. What is the truth behind this ‘misconception’? Don’t you think Greenwashing in developing countries is deceiving consumers?
With increasing desire and pressure on companies to be net-zero, there is inevitably some (occasionally unintentional) 'greenwashing' by brands across all sectors, including packaging. Pulpex however is proud to be the world's first, commercially scalable packaging technology capable of producing genuine paper bottles made of 90%+ sustainably sourced fibre and designed to be recycled in standard paper waste streams.
Q: Please let us know the plan of Pulpex to scale up its production facility across the world, and especially what plan for India?
From Q1 2024, the commercial scale production line will produce up to 12.5m paper bottles annually in Cambridgeshire, UK. Additional capacity will become available in targeted geographical locations globally via licensed manufacturing partners from mid 2024 including. This includes India, where we remain open to discussions with interested parties who, if interested, are free to contact us via hello@pulpex.com
Q: The production of packaging from virgin materials – whether plastic or paperboard or pulp – is nearly always more taxing on the environment than using recycled material, which is why recycling matters. How does Pulpex think about the circular economy of paper bottles? Is any plan you have?
Recycled fibre cannot be used for food and beverage products due to food safety concerns. Pulpex technology is flexible to available fibre sources and is compatible with both virgin materials and recycled fibres.
Made from sustainably sourced wood pulp that is PEFC-accredited and FSC-certified, Pulpex holds both PEFC and FSC Chain of Custody certifications.
Our bottles are widely recyclable and can be recycled in standard waste streams as you would normally recycle paper and card. As global recycling rates are far higher for paper and card than for plastic, fibre-based packaging has a much higher chance of actually being recycled and becoming more ‘circular.’ In the event a Pulpex bottle is not recycled, it will degrade readily in the natural environment.
Pulpex is also a member of 4evergreen, a cross-industry alliance of over 100 members representing the entire lifecycle of fibre-based packaging – from forests to designers, producers, brand owners and recyclers.
Q: What is the Life Cycle Analysis (LCA) of paper-based packaging? In the latest Interview with The Pulp and Paper Times, World Packaging Organization (WPO) has claimed that there is seven times less impact if we go for the plastic bag and even more so if we recycle that plastic. it is not just a bottle or box, no there’s a lot of science and technology that goes behind the creation of that particular packaging component. How do you take this claim in your innovation?
Whilst plastics are recyclable, their recycling rates are relatively low compared to fibre packaging. As such, a fundamental aspect is that fibre as a category has a much higher recovery rate than other materials and if it does escape, it degrades readily in the natural environment without any legacy impact on the environment.
As mentioned earlier, fibre packaging is not the answer to all packaging situations. The planet needs further advances in plastic, metal and glass packaging to the help with its global carbon footprint but we remain excited to see the developments in other packaging fields.
Q: What is the market size of liquid packaging? How would it grow in next five years?
Globally more than 1.3 trillion glass and plastic bottles are produced each year and, with an ever-increasing global population, it is hard to imagine anything other than demand increasing over time.
Q: We are aware that the fibres get shorter and shorter as it's recycled, and we can make products out of paper and board that lend themselves to better recycling and that can be recycled more than the figure of seven times. How do you support Pulpex’s bottle longer recyclability vs plastic?
Pulpex can use either virgin or recycled fibre in its bottles and does not reduce the quality of the fibres in its bottle making process. Post consumer use, the bottles can enter standard paper waste streams and go on to become other robust, paper-based products.
Q: packaging cost counts on retail products; companies are more aware about the pricing of products and want to keep it suitable for consumers. How do we evaluate a price of a sustainable bottle against a plastic bottle? Do you think that it will sustain in the long run?
YES - All brands have mixed packaging material portfolios. Given Pulpex's breadth of engagement with leading consumer brands across the globe (see www.pulpexhome.com<http://www.pulpexhome.com/> for more information), we have no fundamental concerns about the cost of sustainable packaging.
JMC Paper Tech forged a technological partnership with Hergen, introducing cutting-edge advancements in tissue-making technologies
- Cutting-edge advancements in Tissue, Shoe Press, Hydraulic Headbox, Film Press, and Yankee Cylinders technologies
The Pulp and Paper Times | 2nd December 2023
JMC Paper Tech and Hergen have strategically united to form a robust Technology Partnership, aiming to introduce cutting-edge advancements in Tissue, Shoe Press, Hydraulic Headbox, Film Press, and Yankee Cylinders technologies. This collaborative effort goes beyond a traditional business alliance, evolving into a synergistic relationship that leverages the unique strengths of both companies. The partnership aims to deliver state-of-the-art solutions that optimize efficiency and quality in paper production across the regions of India, Bangladesh, Pakistan, the Middle East, and Africa.
Talking to The Pulp and Paper Times, Dr. Yesha Patel, CEO of JMC Paper tech informs that JMC has recently forged a technological partnership with Hergen, extending our collaboration to the Southeast Asian market. This strategic alliance is specifically aimed at catering to the markets in India, Bangladesh, Pakistan, the Middle East, and Africa, focusing on Tissue Machines, Film Press, Shoe Press, and Hydraulic Headbox technologies.
She further said, “This collaboration brings together JMC's extensive industry experience of almost 3 decades and Hergen's 45-year legacy as an industry leader in developing advanced paper-making technology. The synergy between the two companies ensures a powerful combination of innovative prowess and technological expertise.”
“By leveraging each other's strengths, JMC and Hergen are committed to delivering groundbreaking advancements in tissue-making machinery. This strategic partnership enhances JMC’s ability to provide comprehensive solutions to our clients, reaffirming our commitment to being a one-stop-shop that offers “Concept to Commissioning” solutions for all paper production needs. The inclusion of Hergen's technologies further strengthens JMC's position, allowing us to cater to a wider array of customer needs. The partnership is poised to redefine industry standards, contributing to the continuous progress of the global paper and board and tissue manufacturing sector.” She added.
About Hergen:
Hergen is a Brazil-based industry leader with a 45-year legacy in developing state-of-the-art technology for the paper industry. Their expertise spans various areas, including shoe press, hydraulic headbox, film press, and Steel Yankee cylinder technologies. For more detailed information, you can explore their website at Hergen Website.
Satia Industries’ revenue declined by 19% due to reduction in paper prices in Q2FY24; upward trend in raw material prices - Raw material prices have started to rise in the recent past, and this upward trend could potentially affect industry margins in Q4FY24
- Net profit stood at INR 479 Mn in Q2FY24, compared to INR 508 Mn in Q2FY23, a decline of 6% YoY.
The Pulp and Paper Times | 7 November 2023
Punjab, 04 November 2023: Satia Industries Limited (SIL) one of the leading wood and agro-based paper manufacturer in India, announced its results for the second quarter and half year ended September 30, 2023.
Revenue from operations came at INR 3,734 Mn in Q2FY24, a decline of 19% YoY, due to reduction in paper prices. Additionally, the company had taken maintenance shut down of its machinery, which has also impacted the production. Decline in prices was offset by reduction in raw material prices, due to which the gross margins were stable at 58.2% in Q2FY24 as compared to 59.1%/49.1% in Q1FY24/Q2FY23
Commenting on the financial results, Executive Director Mr. Chirag Satia, said “During the past quarter, the industry encountered significant challenges, primarily in the form of declining prices, which had a notable impact on our revenues. Our revenues decreased by 19% year over-year, totalling INR 3,734 Mn. Our continuous orders with State Text boards provided vital support in mitigating the effects of price declines, ensuring the stability of our gross margins throughout the quarter.
Net profit stood at INR 479 Mn in Q2FY24, compared to INR 508 Mn in Q2FY23, a decline of 6% YoY.
Key Developments
• Satia Industries has finished the first phase of wood pulping capex with installation of four digesters. Rest two will be installed during Q3
• The company is running two cutlery machines on trial. By end of Q3FY24, the company is expecting 6 more semi-automatic machines to come
It's worth noting that raw material prices have started to rise in the recent past, and this upward trend could potentially affect industry margins in Q4FY24. However, due to our integrated approach, Satia Industries is well-positioned to efficiently manage cost escalations. Moreover, our reliance on 50% of revenues from State Text Boards provides a valuable safeguard, allowing us to secure revenues at fixed prices and ultimately delivering good returns to our shareholders.
We remain committed on maximizing our operational efficiencies and optimizing resource allocation. As a result, we consistently undertake improvement projects in our facilities, even if they are of smaller scale, strengthening our capability to effectively navigate challenges. We have successfully completed the first phase of our wood pulping capex, and the remaining phase is set to become operational in the second half of FY24. Consequently, we anticipate reaping the full benefits of this capex in the upcoming FY25.”
Outlook
• The management expects to achieve 5 to 7% growth in paper production
• The company is targeting ~200 bps improvement in the EBITDA margins in FY24 over FY23
Satia Industries Limited (SIL), is one of the largest Wood and Agro-based paper manufacturer in India. SIL was incorporated by Dr. Ajay Satia in 1980 and commenced its operations in 1984 with a small capacity of 4,950 tonne per year. It surprisingly overtook many of its peer in production achieve, to 2,09,910 MT in FY23 implying a capacity utilization of ~102%. SIL has successfully commissioned their PM 4 and has augmented its total installed capacity to 219,000 MTPA.
G20 summit halts paper mills production in North India; Kraft paper demand improves, Export may resume from November
New Delhi | 8 September 2023 | The Pulp and Paper Times:
Paper Mills in north India have stopped production for four days (7 to 10 September 2023) due to G20 Summit in Delhi restricting heavy vehicles movement in Delhi and cross border transition.
Talking to The Pulp and Paper Times, Mr Atul Bansal, MD, Maruti Papers Limited, Shamli said, Yes, The Delhi Government has issued a notification restricting heavy vehicles movement in Delhi due G20 summit, market will also be closed. We cannot send finished paper to sell as well source raw material like waste paper which primarily comes from Delhi. G20 summit will impact the production of western Uttar Pradesh's paper mills prominently.
A Gazette notification outlining a series of restrictions to be in place during the G20 Summit. These restrictions are aimed at ensuring smooth proceedings and enhanced security during the international event.
“Goods vehicles and commercial vehicles will not be permitted to operate on the few roads creating difficulties for paper mills to sell and source finished products and raw material respectively. These restrictions are also affecting to Uttarakhand, Haryana and Punjab paper mills forcing them to shut their production unit.” Mr Ashok Bansal, MD of Nikita Papers Limited said.
Mr Vinod Aggarwal, Director, Paswara Papers Ltd., told The Pulp and Paper Times, Mills are shut down for 5 days due to low demand of paper in the market, low price realisation due to over production.
On the demand front of kraft paper, Mr Ashok Bansal looks optimistic, he added, yes, demand has improved in past months and we hope it will sustain in coming months due to festive season.
Mr. Bansal also expresses his steadfast position on the export of kraft paper, saying that Indian paper mills anticipate that exports will resume in November or December when our competitive pricing due to the availability of inexpensive waste paper will allow us to export paper at a lower price than that of other nations' imports.
"One reason why paper mills are closing is because of the G20 Summit, but the reality is that overproduction means there aren't enough orders to keep the paper mill running. Due to a shortage of orders, they also want to preserve market sentiment. The Indian Recovered Paper Traders Association's (IRPTA) president, Mr. Naresh Singhal
Regarding the cost of waste paper, Mr. Singhal stated that the upper limit of price for waste paper is now hanging at Rs. 17/kg, while the lower price is Rs. 16.40/kg, while the price for finished goods has decreased to Rs. 27.50 per kg from Rs. 28.50, but orders have not yet materialised.
“As the prices of finish paper and board are not increasing as compared to the increase in waste paper rates. Waste paper stakeholders are delighted to feel that they will be able to receive the rates for their stocks which were previously stored at higher rates but the rates declined and those stockists were facing challenges of loss on their stocks.” Mr Singhal informed.
Prices of waste paper in India also gone higher accordingly. Look at the current rate trend in India Kraft/Corrugated waste paper in Punjab, Uttar Pradesh, Bihar, Jharkhand, West Bangal and North East states is approx average rate FOR Mills are from Rs 16000/ pmt to Rs 17000/ pmt. at different places.
Rates of Kraft waste paper in Central India i.e Indore, Bhopal, Nagpur, Jabalpur and surrounding areas are Rs 14300/to Rs 15000/ pmt while in Gujarat Rajasthan approx Rs 15000/ pmt to Rs 16000/ pmt.
As the price of imported waste paper gone up by $10 to 15$ per metric tons for Mix waste, OCC and apprrox 20/ 25 $ in SOP A grade, SWL Scan board and also Cup stock, he added.
Karnataka Rs 14500/to Rs 15500/ Andhra Pradesh and Telangana Rs 14000/to 15000/pmt
Collection level of corrugated waste paper is poor. Rains in Tamilnadu and Nizamabad and also some other regions of South India still continue.
Price increases across the writing-printing sector, including copiers, will lay the foundation for the upcoming year
“We expect a balanced equilibrium between demand and supply in Q3 and Q4 of FY 23-24, leading to price stability in the market”
“We can now cater to smaller orders, allowing for increased market penetration”
Recently, The Pulp and Paper Times spoke to Mr Partha Biswas, Chief Sales & Marketing, JK Paper Ltd., and discussed the market scenario of writing and printing paper, copier, its price forecast, impact of NEP20 on paper demand, Imports of paper, and other issues pertaining to paper industry. Here are his views:
The Pulp and Paper Times | June 2023:
Q: As a marketing leader, what is the current market scenario for Writing and Printing paper and Copier segment? How do you anticipate the demand and price forecast post-Q1FY24?
In the copier segment, we anticipate steady growth of around 4-5% for FY 23-24, as demand has matched pre-COVID levels. Price increases across the writing-printing sector, including copiers, will lay the foundation for the upcoming year. Import levels are expected to be equivalent to pre-COVID times, while exports may decrease due to competitive global prices. However, the implementation of the National Education Policy (NEP) 2020 and the introduction of fresh curricula for certain subjects will fuel demand, leading to a good market outlook for FY 23-24. Although a slight dip is expected in Q2, stability in prices is anticipated once the publishing sector picks up in Q3.
Q: JK Paper is exercising demand sensing and forecasting driven through its digital initiatives; please explain this exercise. Also, JK Paper intends to launch more Quick Service centres for packaging board dealers. What is this all about?
Digital Demand Sensing utilizes historical sales data enriched with external data to create a machine learning-based analytical model. Its primary objective is to enable smart marketing and sales interventions by defining micro markets at various levels, such as cities at the ward level and districts/subdistricts for the rest of India. This approach helps determine the demand and growth potential of each micro market, allowing for targeted strategies.
QSC (Quick Service Centre): We have successfully reduced lead time by 6-8 days, enabling us to deliver better and more efficient service to all clients. Previously, small order quantities were not feasible due to Full Truck Load requirements. However, with the implementation of QSC, we can now cater to smaller orders, allowing for increased market penetration.
Q:There is a anticipation that Writing and Printing paper price might further increase by end of Q2FY24 owing to boost in W&P paper demand due to National Education Policy 2020. Do you think NEP2020 will bring more demand to the Industry as well as increased price?
With the implementation of NEP 2020, we anticipate a moderate increase in demand. However, this heightened demand will be met by an increase in imports. As a result, we expect a balanced equilibrium between demand and supply in Q3 and Q4 of FY 23-24, leading to price stability in the market.
Q: New pulping capacities have been added in countries like Brazil, Uruguay and China, which will become operational in this calendar year. With softness in global demand, global pulp prices will definitely come down. This may lead to an increase in imports into India. May we see the adverse impact of cheap Imports on domestic pricing in coming months? Please explain
Indian paper prices are directly linked to global prices, particularly influenced by pulp pricing. If there is an increase in pulp production, leading to softer pulp pricing, it will result in a correction of writing and printing prices globally. The competitiveness of global prices will drive further imports, prompting domestic manufacturers to adjust their prices accordingly.
Q: What does one understand about Environmental, Social & Governance (ESG) in the Paper and Packaging industry? Why it is becoming more demanding nowadays? Is it a step towards the GREEN company?
ESG in the paper and packaging industry involves prioritizing sustainable practices, responsible sourcing, and strong governance. It addresses environmental impacts, social responsibility, and ethical decision-making. It is becoming more demanding due to stakeholder expectations, regulatory pressures, investor influence, and consumer preferences. Embracing ESG is a step towards becoming a green company as it focuses on reducing environmental footprints, promoting social welfare, and ensuring long-term sustainability. By adopting ESG principles, companies in this industry can enhance their reputation, attract investment, and meet evolving market demands.
Q: One of the largest paper-making giant, Asia Pulp and Paper (APP), have received a land allotment letter to set up one of India's most extensive paper manufacturing infrastructure (1.2 million MTA). APP will produce WPP, Tissue and Packaging Grades in India; what is your view on this massive investment? Will the local market of these grades experience a slowdown? How do Indian paper mills compete in these grades?
There is still no clarity on this investment as and when there is any information coming out of APP, we will be able to comment on this.
Q: Govt. of India has brought the Import of Paper under Paper Import Monitoring System (PIMS) from 1st October. This order shall be applicable to a range of paper products, such as newsprint, handmade paper, wallpaper base, duplicating paper, coated paper, uncoated paper, and other grades of paper. Do you think this step will bring relief to domestic paper manufacturers? Trade Bodies call PIMS a ‘CURB’ on imports and do not provide a level playing field. What is your stand on this?
PIMS is a formal way of putting in all the details of imports including place of origin. Mandatory filling of this form will bring in more transparency in the business.
Q: Indian imports of paper and paperboard have jumped 47% in FY 2022-23, the highest jump has been in the imports of uncoated writing & printing paper at 102% followed by coated paper and paperboard at 51%. Don’t you think that above data shows demand –supply gap exist in the market which is not being penetrated by domestic manufactures?
FY 22-23 was the first full year post covid, where in the demand also was 100% and it touched the pre-covid levels. Similarly, the imports in the same time period though would have shown sharp increase over last year, but in reality, its at the same level as pre-covid times (FY 19-20) (to check- growth 10-15%).
Q: IPMA has also called for the issue of quality control orders (QCOs) by the Government on all grades of paper and making BIS certification mandatory. What is BIS? Can you shed light on this and how it will help Indian Customers?
The Bureau of Indian Standards (BIS) is responsible for developing standard specifications for various products, including different categories of paper. Photocopy paper falls under compulsory certification with the ISI mark. By adhering to these specifications and obtaining the ISI mark, customers can be assured of the quality of the paper they purchase.
Q: Please shed some lights JK Paper's offering to the Market, JK Paper intends to achieve over 100% capacity utilisation in its newly established board project at Unit CPM and higher cost efficiency in FY 22-23. What are JK’s offering in board sections and its edge on other players’ products? What growth prospects do you forecast in board section in coming two years?
FBB, SBS, Cupstock, Anti-Fungal B, Poly-coated – inhouse pulp production which ensures consistent quality of raw material which leads to consistent quality if FG, faster service and we are present close to market and establishment of QSC helps us to service customers faster.
Q: Paper industry is being obsolete by digital technologies and on the other side paper industry is leaning on digital platform/media to promote or launch their products, recently JK Paper Intended to launch like JK Copier plus (Antimicrobial) and JK Pac Fresh on digital media, As a marketing leader how do you justify this contradiction?
As we move towards a plastic-free economy, paper emerges as the best alternative to plastic. Therefore, we do not believe that digital technologies will hinder the growth of paper consumption in India. In fact, leveraging digital media provides us with a platform to reach out to a wide consumer base and raise awareness about our paper products. Additionally, the education and publishing sectors will always require paper for their regular operations, ensuring a consistent demand for paper.
Q Any marketing mantras or comments for the Indian Paper industry
JK Paper Ltd. is committed to achieving continuous growth through effective marketing strategies. We emphasize the importance of innovative product development, establishing strong customer relationships, and gaining insights into customer preferences to enhance satisfaction. The company proactively analyzes future demand trends, evolving consumer behavior, global market dynamics, and the impact of related industries. With this comprehensive understanding, we develop sustainable marketing strategies aimed at driving profitable growth in the long term
New paper machine has been designed keeping in mind the requirement of corrugators in the international market: Aryan Paper Mills
-We have a base of repeat active international customers which are testament to our dedication to quality
In an exclusive interview with The Pulp and Paper Times, Mr Mihir Shah, Director- Aryan Paper Mills shares his thoughts on several topics, including waste paper crisis, paper prices and new trends in Corrugation. He also discusses Aryan Group's future growth strategy, expansion and potential for new products. Here is the whole interview he gave.
The Pulp and Paper Times | April 2023
Q: Please give us a small introduction of Aryan Group.
We, The Aryan Group, are an established organization in the paper and packaging industry of India known for its integrity, honesty, quality and ethics since 1956. Up till now, our business units have expanded in the recycling of paper with an integrated paper recycling mill, manufacturing of paper board and paper cartons with state-of-art technology and machinery. We are focussing strongly on the environment under leadership of our MD Shri Sunil Shah. Sustainaible growth with a focus on lowering the carbon footprint per ton on paper is our primary driver.
Q: Recently Aryan Group has signed an MOU with Government of Gujarat in the august presence of CM Mr Bhupendrabhai Patel for our upcoming state of the art Paper Mill. Please elaborate on your expansion plan. What is your capacity, Grade of Paper, GSM, BF, Deckle, and investment?
Aryan Paper has been strongly focussed on exports. The new machine has been designed keeping in mind the requirement of corrugators in the international market which work on a very different and evolved buying process for paper. The new machine is a high speed 5.1 m machine which will focus on various grades of paper including FM & TL grades.
Q: Excess Capacity and drop in Exports have made the paper market sluggish. Many new capacities are coming up in Gujarat and south India, which may further impact the market; how do you take this excess capacity issue? And what should be the Indian paper industry's efforts to increase the Export?
Our focus on quality and consistency has helped us establish our paper in more than 25 countries across a network of national as well as international distributors. We have a base of > 75 repeat active international customers which are testament to our dedication to quality.
Q: Aryan Paper made low-cost cardboard beds for Covid-19 patients during the pandemic, any new invention after that please elaborate, Do you think that India has good scope of using corrugated furniture and other household items? In this direction what steps are needed to be taken?
Rhea shah Our Directior who had jsut returned from her Harvard post graduation was the inpsiriing force behind the corrugated beds. She had developed the corrugated beds with her primary focus on reaching out to address issue of huge shortage of beds during the pandemic. The focus was on philantrophy rather than commercial. We had patented the design . Many had copied the same ,but we decided not pursue on our patent rights considering the larger good.
Q: How would you evaluate the waste paper market condition, European Union is planning to ban or partially ban the waste paper export to other countries, and new big capacities are coming up in US, Europe and Southeast Asia which are to consume waste paper majorly. How do you assess all this development as a waste paper buyer?
We have established stong supply chain partnerships with leading waste paper balers in US & Europe . This partnerships have evolved over a relation > 2 decades. These partnerships assure us of steady and consistent supplies over the future.
Q: Sometimes, the Quality of Kraft paper has become a significant hurdle in export; paper mills don’t maintain the quality parameter required by the end user. How do you maintain the quality parameters in Aryan Paper ?
We have visited various corrugators and understood thier working. We are proud to say that one of our customers has been running our paper on a 300 mpm Mitsubishi corrugator on a consistent basis. Our consistency and qulity has been well established and we believe that these 2 parameters are our stengths. We have seen that international buyers have a different mindset and are focuseed more on aspects like uniform web profile , runnablilty ,consistency and SCT based performance. Our team is our strength and our quality is based on our team and our European machinery.
Q: Tissue Paper is the fastest-growing segment in the paper industry, and the Gujarat region doesn’t have much capacity in tissue paper production. How do you evaluate your investment in front of the lucrative tissue paper market?
Our focus continues to be FM / TL and packaging grades for now.
Q: What growth perspective do you predict in Kraft Paper for the next five years?
We believe that the focus in the domestic market to look at value rather over price will evolve. The focus has to change from per kg to per sq meter of corrugated board to enable paper mils and corrugators to offer more value to the customer. We believe that a positive approach and a coordinated partnership by the paper mills and the corrugators to establish common performance standards will definitely help the industry explore its full potential.
Q: Recently, A big Paper Mill – JK Paper has stepped into the corrugation segment investing INR 150 crores for box making with the latest technology. Don’t you think that large investments will trigger consolidation in corrugation industry? How does Aryan Paper review this move, especially when most corrugated box manufacturers are small and medium entrepreneurs?
We are running a 2.4 m Fosber and a 1.7m Isowa line. These lines have given us the edge in terms of technology and perfromance. We will be starting our new corrugating plant within this quarter. The upcoming paper machine has been designed with the help of teams of our key equipment suppliers Bellmer , Valmet & Kadant. Our investments in technology remains focussed as does our extensive learning from the international market.
Q: One of the largest paper-making giant, Asia Pulp and Paper (APP), have received a land allotment letter to set up one of India's most extensive paper manufacturing infrastructure (1.2 million MTA). APP will produce WPP, Tissue and Packaging Grades in India; what is your view on this massive investment? Will the local market of these grades experience a slowdown? How do Indian paper mills compete in these grades?
The per capita paper consumption in India at a little over 13 kg, is way behind the global average of 57 kg. The focus of Make in India and emphasis on an efficient transportation network under the leadership of Honourable PM shri Narendra Modiji makes us confident of growth across multiple segments in the domestic market.
Shree Ajit Pulp & Paper began production at new UNIT-II with the intention of capturing the export market in the light weight segment
Vapi | 19 July 2023 | The Pulp and Paper Times
Shree Ajit Pulp and Paper Limited (SAPPL) is one of the top Kraft Paper manufacturer in India. SAPPL manufactures Premium Grade Kraft Paper – Testliner (single wire) & Multilayer Testliner (triple wire) with GSM range of 80 – 300 & BF range of 20 – 35.
Owing the demand in kraft paper segment, SAPPL has invested in enhancing its production capabilities through the acquisition of NR Agarwal Industries Limited’s UNIT-II in 2022. SAPPL has successfully commenced commercial production at its new unit i.e. Shree Ajit Pulp And Paper Ltd Unit (II) located at Plot No.1, Plot 1/B, 1 st Phase, GIDC, Vapi- 396195, Dist. Valsad, Gujarat w.e.f 17th July, 2023.
“We are pleased to inform you that after having pioneered the Indian Kraft Paper Industry for more than two decades with satisfied channel partners and having enjoyed their patronage & support in catering to domestic as well as global market with consistent quality,” the management said.
“With this, we are venturing in light weights (40 to 120 gsm) with HIGH TENSILE/TEAR performance kraft paper. The quality will meet global standards, which will directly replace imports and also facilitate the export of such grades, a MAKE IN INDIA initiative” its added.
“To sustain in the fiercer competitive market and to enhance the production capacity, after certain modification/ installation/upgradation of the equipment at said Unit-II, the Production capacity of the Unit-II will be 82500 MTS per annum,” said Mr Gautam D. Shah, Chairman & Managing Director- SAPPL in the annual report for fy 21-22.
SAPPL produces 100% recycled products. “We customize our products as per customer’s requirements as customer satisfaction is our ultimate goal. Our quality kraft paper is used by various top MNCs in India & globally to package their valuable goods,” Mr. Shah said.
The future of the Paper industry in general and Multilayer Testliner and Testliner Paper in particular is linked with the future of world economy. When the economy in general is on the down turn, the demand for SAPPL’s products is also likely to fall. On the other hand, when the economy in general is on the up-turn, the demand for the SAPPL’s products is likely to increase. SAPPL is having advantage over most of the other manufacturers as it is professionally managed and its operations are efficient, cost effective and highly competitive.
“We see some exciting new segments where the paper industry can grow at a good pace”: Pawan Agarwal
-150,000 TPA brown-field project: Naini Papers is eyeing flexible packaging segment
- Growth of WPP segment is not going to be as good as it was perhaps before COVID so there would be some sluggish growth
- Overall industry getting benefit and the consumers of India getting benefit from the coming of APP to India
Recently, The Pulp and Paper Times met Mr. Pawan Agarwal, Managing Director, Naini Papers Limited. We discussed various insights into the Indian paper industry, demand growth, digitalisation impact, future demand prospects of Writing and Printing paper, and Naini’s investment in brown field project dominance of packaging paper over publishing paper. Here are Mr Agarwal’s views:
New Delhi | 2023 | The Pulp and Paper Times:
Q: Asia Pulp and Paper is setting up a massive paper making infrastructure in Maharashtra (INDIA). What impact do you see from this new mega capacity of 1.2 million tonnes per annum? Will the market dynamics be under pressure?
I see, there is a lot of space for further production increase in India and since Asia Pulp and Paper (APP) is coming up with a Greenfield project so I would say it's a welcome step and it is going to take the industry forward to the next level. Market is growing, various segments of markets growing with APP coming into India. So I see overall industry getting benefit and the consumers of India getting benefit from the coming of APP to India.
Q: Post COVID, what is the current market paper scenario?
The dynamics of market have changed a lot post COVID and I see a lot of changes coming up. Number one, the traditional way of doing business has totally changed now and we are having more and more online meetings, more frequent online meetings. And as far as product basket is concerned, many mills have changed their product basket. Post COVID, like fine paper’s demand is not as good as it was before COVID and we are seeing that it may decline in coming days for writing, printing paper I'm talking about and also for newsprint. So those mills have found other areas to focus upon and the main area is hygiene products, and single use plastic has been banned but there is no substitute in India today and mills are working on providing the good substitute for single use plastic. So packaging is going to grow significantly in the coming days and many of mills are focusing on environmentally friendly packaging solutions. We see some exciting new segments where the paper industry can grow and grow at a good pace. So I would say next decade is going to be very exciting for Indian paper industry. We can produce not only for Indian market but also for exports.
Q: what appreciation in writing printing paper prices do you see in coming time?
You see this is all market dynamics, I would not like to comment on pricing part because we are linked globally today and there are several phenomena. You see Russia -Ukraine war, it can have an impact, then anything goes wrong with China, it can have an impact. So it is dynamic pricing. So let us not go into that. I can only say that the future of Indian paper industry is good and even if it is writing and printing segment, we are not going to see sharp decline in coming years though growth may not be as good as it was pre COVID, but it's good.
Q: Tell us about Naini Paper’s new brown-field project, which being set up in Uttrakhand? What are the market factors working behind this?
You see again, as I mentioned, the government of India has done away with single use plastic and today the consumers such as big companies who are wrapping their produce into BOPP films and plastic films, they really don't have a viable domestic option available to them. So we see a lot of market potential in this area. So this project basically is eyeing flexible packaging segment. Today, Flexible packaging when you say 99% is plastic film based but there is lot of scope. Companies like Nestle have announced 2025 is a year when they would like to do 100% environmentally friendly packaging. So we are eyeing those big consumers who are looking for sustainable packaging solutions. So this, this machine would be producing substitute for single use plastic and that would be environment friendly.
Q: Please shed some lights on the capacity of the machine and GSM range you are going to manufacture
The tonnage would be close to 150,000 tons per annum and the GSM range is right from 40 GSM to 170 GSM.
Q: What will be the product basket, sir?
It would be as I mentioned, a specialty paper and we will be producing on this machine as per the demand of the consumers, as per the needs of the consumers. So it is going to be challenging. There will be a lot of products, it would be going to the food industry and it would be going to FMCG to replace their BOPP film packaging, flexible packaging and we'll be producing some coated grades as well. But all would be for packaging applications.
Q: Please shed some lights on earlier CAPEX you done in 2018
We invested to streamline our hardwood fiber line and chemical recovery. This is going to be a new investment in the machine.
Q: what is the expected date of start-up of new machine?
It would be commissioned sometime in January 2025.
Q: what future do you see in next two years for the writing printing paper?
You see writing printing paper is going to stay strong. I mean it's not going anywhere and but as I mentioned, the growth is not going to be as good as it was perhaps before COVID so there would be some sluggish growth. The growth numbers may not be as strong but definitely you can expect it to grow by maybe 3 to 4%.
Q: Last year, Government of India has implemented the Paper Import Monitoring System (PIMS) to check on imports. Some of the Paper Trader Association is saying that it is certainly a curb on the import and it is not providing a fair level playing field to traders.
You see, government policies are based on various considerations. I would say, it's not a curb, it's a check. I mean they want the reasonable imports to be allowed, the legitimate imports to be allowed, but not the dumping. So in garb of imports, there were a lot of products that were coming into India which were not through a legitimate channel. It was sort of dumping by those companies. Like their site cuts were being dumped into India at a very, very low price. So this was hurting the Indian paper industry. So government has put his house in order now with implementing this thing. And this is going to be a trial for other products also from the government side. And we are so very happy that government has finally taken this step. And it is not going to hurt even the importers. You see, it was not benefiting anybody and it was just the dumping from those companies into the country. And I think now it would be a fair opportunity for even the domestic players to compete with the overseas counterparts.
Q: International Monetary Fund (IMF) has predicted the that in 2023, there will be a recession around the globe. So what do you think? Any impact on the paper industry?
I failed to understand the logics of economists many a time. And many a times they say something which really doesn't happen even if it is a recession. So recession doesn't mean that demand is going to die. Demand will be there. When they say recession, then we have to really look into the numbers. And it is such a complicated thing. Let us not go into that. Let us keep on responding to whatever comes up for us in the market in the coming days. And I feel recession when you say recession, inflation is going up in Europe and there's a recession in Europe, but demand is there. Demand is not going down. You look at their growth numbers in Europe, none of the countries has reported negative growth so far. So in 2023, it could be tough from liquidity point of view. It could be tough from the availability of funds for various investments. But from demand point of view, I really don't see a challenge in 2023. Thank you.
Nine Dragons Paper reports net loss due to sluggish consumption under the impact of the pandemic containment measures in mainland China
- Current business environment remains uncertain given various headwinds faced by the export business.
China | The Pulp and Paper Times:
In the first half of FY2023, as affected by the sporadic COVID-19 outbreaks and the lockdown measures across China, consumption remained sluggish and the packaging paper industry suffered from low operating rate. In addition, with the impacts of prolonged high fuel cost resulted from the geopolitical war, interest rate hikes and weakening Renminbi, the paper industry was confronted with the most challenging business environment ever.
One of the largest paper manufacturing group worldwide, Nine Dragons Paper (Holdings) Limited has also felt the heat of sluggish consumption under the impact of the pandemic containment measures in mainland China. Both the demand and selling prices of packaging paper saw a marked decline accordingly. Meanwhile, the surging costs of energy and chemicals resulted from ongoing geopolitical conflicts, coupled with adverse factors such as weakening Renminbi and interest rate hikes, have exerted an immense negative impact on the Group’s profit performance.
“In response to the extremely weak market demand, the Group had to suspend production for destocking and offer sales discount for promotion during the Period. The Group reported an unsatisfactory performance on profitability with the soaring power cost, albeit sales remained steady as compared with the corresponding period last year. It was the first time that the Group had registered a loss since its listing in 2006,” said Ms Cheung Yan, Chairlady - Nine Dragons Paper (Holdings) Limited in the interim report for the six month ended on 31 December 2022.
The operating loss for the six months ended on 31 December 2022 was approximately RMB 861.6 million as compared with operating profit of RMB 2,888.3 million in corresponding period last year. The operating loss for the period was mainly due to the decrease in gross profit margin of the Group.
The Group achieved a revenue of approximately RMB 31,198.0 million for the period, representing a decrease of approximately 9.5% as compared with the corresponding period last year. The major contributor of the Group’s revenue was still its packaging paper business, including linerboard, high performance corrugating medium and coated duplex board, which accounted for approximately 89.0% of the revenue, with the remaining revenue of approximately 11.0% generated from its printing and writing paper, high value specialty paper and pulp products.
Ms Yan further describe that Despite the setback in profitability, the Company put in place effective management measures in respect of cash flows and financial risks, and remained its position of “zero” bad or doubtful debts, thereby eliminating the risk of capital chain rupture. Meanwhile, we adopted a series of measures in a bid to break the deadlock and well prepare for market recovery. For instance, by stepping up our efforts to visit our customers, we developed white cardboard and more products that met market needs. We also focused on commencing production of wood pulp and alternative raw materials, implementing multi-pronged “cost reduction and efficiency enhancement” measures and optimizing the management system.
The Group strictly implemented its “cost reduction and efficiency enhancement” measures during the Period. We, on the one hand, adopted a product diversification strategy to develop new products, such as white cardboard, and expand our customer base in response to market changes, while on the other hand, reduced expenses in all aspects and lowered our financial risks by strengthening the management over working capital and cash flows. Despite the Group recorded a relatively stable sales volume during the Period, the sluggish market has impelled us to suspend production for destocking and lower prices to promote sales on multiple occasions. Combined with the high costs of coal and other materials, we recorded a loss during the Period.
FUTURE OUTLOOK
The year of 2023 marks a turning point in the COVID-19 pandemic over the past three years. As the Chinese Central Government further optimized the pandemic prevention policies with a series of policies and measures being put in place to stabilize the economic growth, domestic demand and consumption in China are expected to recover gradually, which would enable the packaging paper industry to get back on track. However, the current business environment remains uncertain given various headwinds faced by the export business, such as the unresolved geopolitical crisis, ongoing global interest rate hikes and overseas economic contraction. In the mid-to-long term, market drivers such as opportunities arising from both the trend of replacing plastic with paper in packaging and consumption upgrade as well as the tightened raw material supply will further strengthen the Group’s competitive advantages of integrated pulp and paper production, which will be beneficial to enhancing its market share and broadening its earnings base.
The Group will make every effort to strike a balance between production and sales, and exploit domestic and overseas raw materials and markets, at the same time striving to develop new products to cater to market needs and working aggressively on cost reduction and efficiency enhancement, aiming to realize a turnaround from loss to profit as soon as possible. The Group will leverage the key drivers for long-term growth in profitability while pursuing safe and green production
Opportunities and the future of Indian Paper Industry in the next decade
- Many mills have come up in the Kraft paper segment with capacities of up to 600 to 700 tons per day
- We have to shift to the international system of paper based on fluting and test liner.
- We need to find a way to infuse some long fiber into our paper, maybe by using more virgin pulp or other wood substitutes like straw or Bagass
- Every year, 500 billion plastic cups and 260 billion paper cups with plastic laminate are made, and of the laminated paper cups, less than one percent are recycled.
The Pulp and Paper Times | March 2023
The panel discusses the opportunities and the future of the Indian Paper industry in the next decade at IPPTA’s AGM held at Hyderabad. Panelists share their views and put forward opinions on what challenges the Indian paper industry currently faces and how the industry can solve them using different mediums.
Sharing his views on the growth of the trades and paper industry in the next decade throughout Asia, Mr. Mike Grundy, CEO of Amazon Papyrus Chemicals Private Limited, said, “My perspective is a bit outside of India. As our company operates throughout Asia, I have a view from there. Firstly, we have all heard about Environmental, Social, and Governance (ESG), and our company was not focused on it until about two or three years ago when reality struck. As a chemical company, we had to take it seriously, and found that customers look at our ESG credentials. If they want us to be a supplier, then we have to meet their standards. If anyone thinks that ESG is just a box-ticking exercise, I assure you it is not. Big brands and companies make statements and accounts their sustainability goals in their statements, and share how to achieve those goals. Sometimes there is a cost involved, but most of our actions have given us a return on investment.”
“Moving away from single-use plastic is a huge opportunity for the pulp and paper industry. Currently, around 40% of all packaging is plastic-based, and around 30% is paper- or fiber-based. That will change rapidly in favor of the paper industry, giving an opportunity and challenge to everyone. Every year, 500 billion plastic cups and 260 billion paper cups with plastic laminate are made, and of the laminated paper cups, less than one percent are recycled,” he added.
Answering a question about growth and how to achieve it, Mr. Siddharta Mohanty, Vice President & Unit Head of ITC PSPD Bhadrachalam Unit, said, “When we discuss growth, it has to be profitable. In India, there are two types of growth: one is investment-based, and the other is consumption-based. In India the growth is based on consumption and we need to figure out how to improve consumption. There is no competition because there is no investment-based growth. Before moving ahead with cost competitiveness, the first thing is to prepare a raw material strategy. There are three different types of raw materials: waste paper; the industry has to work out a strategy for waste paper collection because that is the major input cost. Second is wood; the industry needs to work with farmers, which has to be a win-win for both the farmer and society. The third is agricultural residue, which we need to oversee. It is going to impact us, so we have to start monitoring the agricultural terrain and develop strategy accordingly.”
He added, “The second is technology; we have to continuously upgrade the technology to be at par with the quality of international standards. Technology comes with investment, and it is a capital-intensive industry. Third is digital technology; today, artificial intelligence and machine learning (AIML) are largely adopted in different industries to optimize operating parameters and performance. It reduces consumption and increases output.”
Mr. Akshat Agarwal, Director of Vijay Anand Kraft Paper Private Limited, shared his thoughts on how paper mills can adapt to the changing demands and how they can use this as an opportunity to grow their market for finished products. He said, “In the last 2-3 years, many mills have come up in the Kraft paper segment with capacities of up to 600 to 700 tons per day, calling for standardization of the products. Instead of making paper based on BF, we have to shift to the international system of paper based on fluting and test liner, correlating with the board properties. There is a need for standardization of reel widths in Kraft paper. Currently, we sell paper with reel widths with a difference of one centimeter, so that needs to be changed, and a more standard system needs to be followed. It will help the mills improve their efficiency and compete in the international market.”
He added, “Under the Make in India initiative, the companies set up their plants in India, and sell their products overseas. In India, there are concerns regarding foul smell being generated from the Kraft paper mills. The issue arises due to poor ETP designs and the Zero Liquid Discharge (ZLD) permissions that they had from their PCBs. Recently, steps have been taken on how technology can be used to eliminate the bad odor in ZLD plants, and I am sure we will find some solutions.”
“One of the factors to control is the amount of long fiber present in our finished product. Most mills in India are recycled-based, and even the material or recovered fiber imported from the USA and Europe become weak, or the amount of long fiber is reducing due to recycling. We need to find a way to infuse some long fiber into our paper, maybe by using more virgin pulp or other wood substitutes like straw or Bagass, and maybe some technologies, which can improve the tear or act as a substitute for the long fiber, might help,” he added.
He said, “What is amazing is how new markets are opening up, like how micro flutes started gaining importance and are competing with mono cartons. The E and F flutes are finding applications in cosmetics, confectionaries, household chemicals, Etc. So this is because of the excellent printing capabilities. The sector requires a low GSM and a smooth finish, so the white test liners are finding applications. Another application is barrier-coated papers. We have seen a lot of seafood, fruits, and vegetable trays; sugar and flour packaging that is exported, and the contents need to be protected from external moisture, so the barrier-coated paper has a huge potential and demand.”
Mr. Akshay Rathi, Director of Kaygaon Paper Mills Private Limited, shared, “There are immense opportunities for the packaging sector to grow sustainably. In India, the per capita paper consumption is around 15 kg, which is likely to grow to over 30 kg in the next few years, whereas the global average is close to 60 kg. These numbers itself shows the scope for the Indian paper industry. Domestic consumption will help to achieve the growth, and objective of GoI to become a 5 trillion-dollar economy through exports. Currently, India stands at three trillion dollars, we see an opportunity coming our way in the next few years. The global supply chain is getting more integrated, and there are immense opportunities as the manufacturing base shifting to India.”
“As far as exports are concerned, we have seen that packaging paper can be exported. The exports of floating medium and test liner touched over 2 lakh tons per month during pandemic, and it continued for several months. However, the exports could not sustain themselves for various reasons, and issues like bad odor, logistics, run ability, and quality, so if we work on these aspects, there is a huge opportunity for the packaging industry. India exports to the Far East, the Middle East, Latin America, and African countries, these exports that happened were more out of compulsion than out of choice, because China shifted its policy on raw material imports, so for us to sustain these exports, we need to work on quality, and one cannot emphasize enough odor elimination.”
He shared, “For a ton of paper, the recycle-based paper mills consume less than 300 kWh power and less than 2-meter cube water. The segment has achieved these numbers, and it is not easy to digest. There are other areas where a lot can be done to save energy, like installation of rooftop solar plants and using biomass as fuel. Under Swachh Bharat Mission, more emphasis is given on garbage collection and its processing, not only within corporation limits, but also at the gram panchayat level. The processed can be used to convert waste into energy, and I think some government initiatives are promoting and funding local gram panchayats and corporations to collect more waste.”
Mr. Hardik Patel, Director of Sales and Marketing, Om Sree Papertek (P) Limited, shared, “The mid and small-level industries can achieve the targeted sustained growth. However, one of the problems is giving stability to customers. Today, due to the deficiency of fiber, we have waste paper people holding us hostage, and we have to rely on local procurement, which is an unorganized sector. The imported fiber that comes has a lead time of around 60 or 90 days, during which waste paper collectors hold us, hostage, by not supplying or by increasing the prices, and in turn, we fail to provide a sustained and stable market creating uncertainty for the end customer.”
Mr. Madhure Desarda, Director of Operations, Parason Machinery (India) Private Limited, sharing how to achieve growth, said, “I would talk about three categories: How we can have growth in the next decade, how to sustain, and how AIML will play a role in the future. India has more than 600 to 650 paper mills, and the average mill size for small, medium, and large would be around 150, 200, or up to 300 tons a day. Today, India has 60 molded fiber plants; the average size of the plant is 3–4 tons a day, so if you multiply 60 by 4, it is 240 tons per day, whereas, in China, the average plant for molded fiber is 250 tons a day. This molded fiber industry is made for China and India because it is a bit labor- and capital-intensive and we need good fibers, so I believe India has a good future.”
He added, “This industry will be worth around 5 billion dollars in the next one to two years, so I believe this will be a good opportunity for us to enter it, not only on the molded fiber production side, but also on the pulp supply side. Another 50–60 plants are coming into India, so any big mill, whether we go for Bagass pulp, wheat straw, or bamboo pulp, will be a good addition to the industry. Regarding sustainability, we need youth or new people in the industry. Educational institutions should be encouraged to start paper engineering courses. It can start with the elective courses in the last year and with the optional practical training, so there is an infusion of fresh blood in the paper industry, and we can have the right talent.”
Recycled paper is no longer only a product of India or China; export decline, Mills have come up in Turkey, EU, Indonesia, Vietnam, Malaysia
- Major investments in most machines across the world that earlier used to make other grades such as graphic papers.
- Global inflation and high interest rates due to overall uncertainty – we cannot export Kraft for next 4-5 months
- The fibre required for India which is almost 6-7 million Ton Per Annum will become a challenge as quantities will not be available
- Russian and some other mills from Malaysia are supplying kraft paper at almost 20% lower than India market
April 2023 | The Pulp and Paper Times:
The below article is written by Mr Naynesh Pasari, Managing Director of Shree Krishna Paper Mills & Industries Ltd. Shree Krishna Paper Mills & Industries Ltd was incorporated in the year 1974 is one of the leading manufacturers and suppliers of different varieties of Paper in Northern India and our manufacturing facility is situated at : Keshwana, Dist. Jaipur, Rajasthan State. Views are personal in the article.
Recession impact on paper in India and around the world:
During COVID there were sudden ‘MIRCO’ demands from various countries for various products. If you take for example the first phase – the work from home announcement lead to increased demand for electronics , these are products that one must needed under any circumstances. The demand for packaging and shipping these numerous boxes increased. Similarly the micro demands for masks, sanitizers, PP kits and various other covid needs that got a sudden spurt. Work from home or stay indoors also meant sudden increased demand for paper bags, grocery bags etc as the world started ordering items from home. In situations when there is micro demands the disruptions are bound to take place for in terms of prices and overall market economics. The same thing happened in paper – there was dipropionate increase in paper demand over the 18-20 months of covid 1st and 2nd phase which led to increased capacity by paper mills, price rise and major investments in most machines across the world who earlier used to make other grades such as graphic papers.
Now the world is faced with over supply as various machines have been installed in most countries and the impact can be seen across most grades in India too. The global paper market has fallen due to the fact that micro demands don’t last, macro demands do. The impact has been below, reduction in paper consumption by 4% Since past 6-8 months.
Moreover the Chinese recovered pulp prices have fallen between 30 - 50 USD PMT and consumption fallen 2.5% overall YTD.
Present Export scenario of kraft paper and next 3-month scenario:
Exports can take place in cases where domestic demand in the country you are exporting is high due to non-availability of the paper or supply is less than the demand, or price to export is lower than the domestic production. Mills have come up in Turkey, EU, Indonesia, Vietnam, Malaysia and so on. Recycled paper is no longer only a product of India or China now. Mills in most developed countries have installed recycled paper plants and offering Kraft paper at prices Indian mills cannot even match. I recently learnt that Russian and some other mills from Malaysia are supplying kraft paper at almost 20% lower than India market.
Under these circumstances, until we find a solution of the global inflation and high interest rates due to overall uncertainty – we cannot export Kraft for next 4-5 months.
Duplex and kraft manufacturers are increasing prices on account of inputs hike--- impact and market prediction for the next 3 to 6 months.
I feel a 5-6% price increase should take place every quarter, that shows the industry is healthy and there is demand for the product. The Duplex mills who once used to export their paper in large quantity to Turkey, Africa and other markets had to drop their prices by almost 25Rs. /kg or 25-30% which is due to the fact that prices increased also disproportionate. However whatever price increase the mills have now asked for Duplex or Kraft have not been accepted by the market and the industry is back to its sloppy demand since July/ Aug 2022. The important part here is that instead of price rise , the industry needs consistent orders. Once orders come on regular basis the price rise follows.
Waste paper scenario:
China is the most populated country in the world – its per capita paper consumption is 75 kgs. Collection ratio is 45% India is second most populated country but its per capita is only 20 kg. Waste collection ratio is 30% USA is 3rd most populated nation and per capita is 200kg. Waste collection ratio is 65% If you look at the above the interesting part is that India and China whose population are both more than a Billion the paper consumption of India is 1/3 rd of China’s and collection ratio is almost half.
Chinese government have already understood the value of fibre self-sufficiency and hence ensured policies accordingly such as investing in agro fibre and forests. Incase India’s per capita paper consumption increases by even 1% in next 2 years that would mean an additional approximately 2 Million tones of paper is needed in next 2 years. For that the country needs to import an additional MT of waste or produce the same domestically. That is where the real challenge is ahead as China has started using Recycled and agricultural paper pulp. The biggest change in the industry due to which the prices of waste paper has dropped since its peak. Although the prices in the peak was not sustainable and pre covid the prices used to be what it is today for most brown grades. China has also started its agriculture fibre farming and virgin fibre forests. There is a lot of shift there and they are targeting to become fibre self-sufficient country. Moreover they have invested in mills in USA, Malaysia and Vietnam making it easier for them to manufacture paper in those markets and supply to the world instead of importing kraft reels (which they did earlier) and supply finish paper to domestic and export markets. Next 24 months is critical for fibre supply. If domestic mills across the world product in full capacity and china markets open and war ends, the fibre required for India which is almost 6-7 million Ton Per Annum will become a challenge as quantities will not be available.
Imports of kraft and new trends scenario --Demand and price.
As already mentioned mills across the world have started manufacturing recycled kraft or virgin kraft at much lower prices as their capacity is higher. There has been an over emphasis on packaging paper and hence all mills have started producing the same.
Excess capacity in kraft - its impact in long-term and solution
Markets have to become domestic based. The world is moving towards in house demand and supply creation as all economies have realised the only way to sustain a country is to shield itself from global turmoil is to ensure a robust self-sustaining economy. India has been a leader in that and the next few months we need to see the actual policy w.r.t. plastic. There is no clarity as the govt. of some states have tweaked the policy and allowed some plastic making it easier or plastic to again recirculate and paper consumption to reduce. I hope that India’s will lead the world with green revolution and adopting strong policy towards plastic ban. The paper industry’s only hope is packaging and for that focus has to be green plastic free economy.
According to FPTA, increased exports of paper and paperboard caused a "material shortage" domestically that caused prices to soar, wrong propaganda by IPMA on print & social media
- Misleading Information and Wrong Propaganda by Indian Paper Manufacture Association (IPMA) on various Print and Social Media's across India
- The Indian Paper Manufacturers have exported a huge Quantity in multifold of various products led to a shortage of material in domestic market.
Mumbai | 3rd June 2023 | The Pulp and Paper Times:
Federation of Paper Traders' Associations of India (FPTA) is a Federation of 37 Associations across India and comprising of more than 6000 + Paper Traders situated across India, has claimed that misleading information and wrong propaganda on various Print and Social Media's across India spread by Indian Paper Manufacture Association (IPMA) in last few weeks on Surge in Paper Imports.
In its representation to Directorate General of Foreign Trade, FPTA says that we would like to state for IPMA's Wrong Propaganda / Misleading Information to Government of India and General Public at large. IPMA has gone to the extent of changing the parameters to suit their logic, from quantity to value. Surprisingly prior to this IPMA never spoke in terms of value.
According to the latest data issued by the Directorate General of Commercial Intelligence & Statistics (DGCI&S) in May, Indian imports of paper and paperboard have jumped 47%, from INR 7,839 crores in FY 2021-22 to INR 11,513 crores in FY 2022-23. Indian Paper Manufacturers Association (IPMA) stated in its release that imports of paper and paperboard into India have significantly increased in the last three years, in spite of adequate domestic production capacity.
On the other side, FPTA stated that The Statistics for the imports as compared by IPMA for the year 2021 - 22 and surge in 2022 - 23 are partially correct and project a different story altogether. The imports are compared to Corona Times to the last financial year. The data must be compared to the Precovid times to the present when normal times.
According to the table below, Import of paper and paperboard have come down to 1,752 thousand tonnes in FY 21-22 as compared to 2991 thousand tonnes in FY 19-20 ( precovid), which decreased by 41 per cent in two years. The exports of paper and paperboard have increased to 2857 thousand tonnes in FY 21-22 as compared to 1662 thousand tonnes in FY 19-20.
IPMA stated that due to surging imports, most small and medium paper mills in India are commercially unviable, jeopardising the livelihoods of thousands of farmers engaged in agro / farm forestry and supplying wood, the primary raw material, to paper mills.
“The story is different from what they are propagating as per the Graph or Data by DGCI&S. The Indian Paper Manufacturers have exported a huge Quantity in multifold of various products. The above chart clearly shows that exports in FY 2020 -21 and 21-22 were to the tune of 2,194 and 2,857 thousand tonnes as compared to imports of 1,747 and 1,752 thousand tonnes. Due to material exports in the Last Financial Year, there was a shortage of material and the rates per tonne were skyrocketed more than double in just a year from 2021 - 22 to 2022 -23 and availability was an issue which hampered the Businesses of various Indian industries of Make in India project.” FPTA said.
FPTA also stated the breakup of imports and exports for FY 2O21-22 quality-wise. The net figure for imports of paper and paperboards is only 1,146 thousand tonnes as 606 thousand tonnes is newsprint which is regulated by separate norms of the Government of India and do not form part of the open trade.
The representation states that It should also be noted that as per the statistics of Ministry of Commerce & Industry, Government of India, and shared by Indian Pulp & Paper Technical Association (IPPTA) the exports of paper and paperboard in the FY 21-22 were to the tune of 3.53 million tonnes as against imports of 2.18 million tonnes. The Department of Promotion of Industry & Internal Trade (DPIIT) annual reports for 2Q22-2023 also publishes the above numbers and thereby provides authenticity to the data.
“However, in FY 2022-23 the exports of paper and paper including newsprint were to the tune of 2.46 million tonnes as against imports of paper and paperboard including newsprint to the tune of 2.52 million tonnes. Imports of newsprint being 0.62 million tonnes the net figure of imports for paper and paperboards comes to 1.90 million tonnes, much below the exports of 2.46 million tonnes. One needs to compare apples with apples only and not oranges.” FPTA says.
ln 2O21-22 there was restrictions of imported Copier Paper due lo BIS certifications was mandatory for the Suppliers of imported Copier. As we have short supplies of Copier Paper in India to the required demands. BIS registrations were completed by Foreign Suppliers in 2022-23 so there was marginal increase of imports to 2021-22.
Some Other Facts of IPMA as under to consider:
-IPMA represents only 15 manufacturers as against a total of 900 out of which 553 are operational, a mere 1 .66 per cent. (DPIIT Annual Report 2022-23 for FY 21-22).
- IPMA members have an installed capacity of 4.826 million tonnes as against the total installed capacity of 30.73 million tonnes (DPIIT Annual Report 2022-23 for FY 21-22) having a share of only 15.704 per cent
-IPMA members domestic sales are to the tune of 3-710 million tonnes as against the production ol 22.50 million tonnes (DPIIT Annual Report 2022-23 tor FY 21-22), having a share of 16.488 per cent.
-IPMA had a capacity utilization rate of 89.55 per cent as against the industry's 87 per cent. (DPIIT Annual Report 2022-23 for FY 21-22)
FPTA stated that IPMA has projected a shortfall of 2 million tonnes of pulpable wood even after more than eight decades of presence of the domestic industry. IPMA also projects a Recovery Rate of a mere 38 per cent as against 68 per cent in United States and more than 70 per cent in Europe. These facts itself proves the lack of initiative towards improving the recovery rate and growing wood to make the country "AtmaNirbhar. lf at all the domestic players were to have taken even a small towards the above the Government of India would not have to spare precious foreign exchange of 2,06,920 million rupees on imports of pulp and wastepaper to the tune of 7.81 million tonnes in FY 2022-23. (Source of this data in Ministry of Commerce & Industry as circulated by IPPTA).
Kraft Paper Mills: matter of survival due to ongoing recession; plants are for ‘Sale’ in Morbi; PM operating at reduced production
- If the price falls to Rs 23 per kilogramme, there is a prospect of export
- Paper mills should consider diverting their capacities into other products such as kappa, tissue board, and recycled writing and printing paper
- Paper mills held orders for 10 days, but this has now dropped to 3 days
Vapi | Morbi| Mehsana | 12 May 2023| The Pulp and Paper Times:
For paper mills in India, the overcapacity in manufacturing lower BF kraft paper has turned into a sore point. To be competitive, paper mills are offering their product at breakeven. The paper industry is suffering from a sharp decline in demand. Paper mills are frequently temporarily or permanently stopping production.
Mr Sunil Agarwal, President of Gujarat Paper Mills Associations (GPMA), told The Pulp and Paper Times that although domestic demand for kraft paper has not decreased, we are 25% overproducing and therefore experiencing a major demand issue.
Mr Abhishek Agarwal, Director of Resonance Paper Mills, located in Morbi, stated that paper mills in Gujarat are in very poor condition, with demand driving paper mills to operate at roughly 50% capacity.
"There is no demand from the overseas market, China is closed, and we see no positive indication of demand revival in the near future," Mr Abhishek explained.
“Around 20 paper mills have been declared for sale in Morbi. Those have bank loan have decided to scrap the paper mills to repay the loan, few paper mills have taken temporary shutdown for 6 to 8 months waiting for improving market condition,” Mr Sunil Agarwal stated.
Mr Manoj Patel, director, Sukraft Group, blames overproduction of kraft paper as the primary cause of decreased demand, claiming that the paper sector saw a large amount of new production capacity constructed without any calculation in the kraft segment. "New paper mills will struggle to survive if organic demand growth does not materialise or exports resume at a higher scale." He added.
“The recycled paper industry is in severe crisis. It is now a matter of survival due to ongoing recession in domestic and international markets” Mr Sunil Agarwal, President, GPMA informed.
Mr Dixit Patel, Director of DN Paper Mills, confirms that paper plants in Gujarat are running at lower capacity. Many paper mills in Morbi have temporarily closed, while paper mills in Surat, Vapi, and Mehsana are also under strain from low demand and are compelled to work at 50 to 80% capacity. "5 to 7 plants in Morbi are on sale due to a demand crisis," he continued.
“We are running all six factories at full capacity; obviously, there is a problem with steady local demand, but because we are close to a port, we compensate for our paper production through export.” Mr Manoj Patel stated.
There is huge demand drop in lower BF such as 16, 18, 20 because most of capacity fall under this range, around 4,00,000 tonnes paper manufactured in lower BF only in Gujarat and Maharashtra.
Mr Abhishek Agarwal also blames excess capacity as the primary cause of the decline in demand. There has been no shutdown in the packaging business such as in the FMCG and electronic sectors, but a rise in paper supply has affected many paper factories. Today, buyers/corrugators have numerous options for purchasing paper which force a paper mill to compromise in pricing. He stated that in Morbi, there were perhaps 15 to 20 paper mills, which had increased to 60 to 65 in just a few years.
On the issue of a paper mill's survival, Mr Manoj Patel advises that massive new capacities in South East Asia could put a crimp in the export market for Indian paper mills, so paper mills should, or should I say must, consider diverting their capacities into other products such as kappa, tissue board, and recycled writing and printing paper. Mr Patel is optimistic about the Diwali festival's recovery of demand.
DN Paper Mills, which manufactures higher GSM paper, is operating at full capacity. "We have some export orders as well, but the decline in local demand is affecting us," Mr. Dixit noted. Mr Dixit looks optimistic to have a revival in demand from Diwali.
"Paper Industry in Morbi is facing significant challenges. The question is of existence for most paper mills in northern Gujrat . It will be a big blow to the multiple employment opportunities provided by his MSME sector. To balance the demand and supply equation, paper mills in Morbi may shut down the plant operations," Mr Dixit explained.
Mr Abhishek Agarwal added that many paper mills are closed, and if demand does not increase, paper owners will have to sell their equipment or permanently down it. If this situation persists, we will see a balancing of supply in the next three to four years.
"Export market is expected to decline because of the Chinese paper mills giant's establishment of new huge capacities in Vietnam, Indonesia, and Malaysia. Indian paper exports were totally dependent on the china market when China's Government imposed a ban on waste paper and strict norms to save the environment two years back. Now China's paper mills have overcome this hurdle by strengthening their supply chain." Mr Agarwal stated.
Mr. Abhishek Agarwal claims that a paper mill makes a profit when it operates at 100% capacity, and that the current circumstances may compel them to sell the factory if the demand crisis persists.
Mr Nailesh Patel, Director of recently formed paper mill Himalay Paptech Pvt Ltd. in Mehsana, stated, "We are operating our mill at 100% capacity but not receiving the price of our choice, there has been lot of variation in rates." The price of 18 BF paper today (9 May) is 25.50 per kg.
On the demand front, Mr Nailesh acknowledges that order frequency has declined dramatically; before, paper mills held orders for 10 days, but this has now dropped to 3 days. Furthermore, in the event that the price of finished paper falls further, corrugators and converters are not putting large orders in contrast to their previous orders.
Local demand can only be revitalised if the export market improves. "The export market is completely driven by the local price of finished paper, which is now hovering around Rs 25 to 26 per kg," Mr Nailesh remarked. If the price falls to Rs 23 per kilogramme, there is a prospect of export. When the local price plummeted to Rs. 24 per kg two months ago, a few Morbi’s paper mills received orders from outside.
FCBM: India is handicapped by lack of High-quality high strength Paper for non-packaging use
-FCBM: With evolution of very large players only a few niche players will survive
-Conditions are very dynamic these days with continuous evolution of business scenarios
The Federation of Corrugated Box Manufacturers (FCBM) of India is a leading & vibrant association representing all Corrugated Box Manufacturers. Over Last 50 years FCBM has rendered yeoman’s service for betterment of its members and promotion of Corrugated Box usage & corrugation industry.
Recently, The Pulp and Paper Times got the opportunity to have an exclusive interview of FCBM’s new president Mr. Vineet Jain, over various issues related to recession, raw material crisis and massive investment into corrugation industry by large corporate players. Here is his full interview:
Q: What is FCBM’s quick review for the present state of the market? demand is sluggish and price for raw material (Kraft Paper) has dropped down, is this a beneficial situation for corrugators?
FCBM monitors & updates its members in evolving business scenario on a continuous basis. There are constant changes in the demand & supply of Boxes, Kraft Paper & downstream items. Awareness of market forces in play is a vital component for making informed business decision for growing. With market forces working at many facets, it is difficult to predict which particular one is good or bad. Also the conditions are very dynamic these days with continuous evolution of business scenarios.
Q: Paper mills and the corrugators organization have been playing the victim card since the COVID pandemic regarding the kraft paper price hike that was artificial, the skyrocketing cost of wastepaper, logistical difficulties, etc. How does FCBM rate this situation?
The Fact that paper segment of the supply chain is very well organised and works for betterment of its fraternity has been recognised even by Competition Commission of India. Most of their decisions not based on pure commercial developments. Yes, due to Covid not just paper, all commodities prices skyrocketed but have cooled down to pre Covid levels. However, the Ukraine war has pushed fuel costs to unreasonable levels. Now the Covid alarm in China is creating another negative wave in Global business scene.
Q: what initiatives does FCMB think should be adopted in order to make paper mills and corrugators' relationships more healthy and trustful?
FCBM has been striving continuously for long to create new bridges with not only their customers but also suppliers. FCBM is willing to take two steps forward for every step taken by paper mills for a healthy and congenial business atmosphere thus creating a win-win situation.
Q: The associations related to paper and corrugations are seeking the Government's intervention in the raw material crisis. Do you think the Government can really regulate the prices and excessive export of Kraft paper in the open market dynamics?
The Government Cannot and will not get involved in price regulation unless situation is alarming. But there is little they can do to make prices move in one direction.
Q: Recently, A big Paper Mill – JK Paper has stepped into the corrugation segment investing INR 150 crores for box making with the latest technology. Don’t you think that large investments will trigger consolidation in corrugation industry? How does FCBM review this move, especially when most corrugated box manufacturers are small and medium entrepreneurs?
Consolidation is now a reality and here to stay. It has happened all over the world across all products and corrugation industry in India must be prepared for this ultimate fact. With evolution of very large players only a few niche players will survive, and rest will be victim of attrition as has happened elsewhere.
Q: What is the current growth rate of the corrugation industry in India, and how will it take shape in the next five years?
Growth of any industry depends on:
1. Growth in GDP.
2. Rise in income of & consequent living standards of public at large. These determine growth in consumerism.
3. Balance of exports and imports.
Fortunately for India most parameter determining growth of industry are very positive and medium-term projections do look very good. Till now Imports of finished goods led to subdued manufacturing in India but now with make in India policy of India, glaring gap between imports & exports will shrink. Auguring well for demand for corrugated boxes. In view of these the Corrugation industry should have growth at 10%+ PA.
Q: There has been a prediction of a recession in 2023, which may cause a reduction in packaging demand; already in Europe, paper mills are shutdown due to the energy crisis, and waste paper will start going to landfills. India is also facing high inflation. How does FCBM is drawing its strategy for the members in order to curb recession impact?
There could be a possibility of some waste going to land fill if the prices do drop more. But that does not look imminent as Energy cost in EU has dropped down to pre-war levels. There is strong likely hood that west will go through a period of almost 0 growth but to early to raise alarm bells. There is huge addition to paper capacity in India & SSE Asia which will increase demand for fibre ensuring some stability in prices.
Q: Increasing demands of Kraft Paper suppliers to specify RCT ( Ring Crush Test) instead of BF & adhere to it consistently. Box manufacturers have started differentiating mills based on consistent quality. How would FCBM evaluate the Kraft paper quality of the Indian Paper Mills on various parameters?
There is a very old adage that mother feeds a child only when it cries. At association level FCBM has been raising issues of quality & standardization of paper supplies for over 30 years. There has been considerable improvement in some parameters with a lot still to be achieved. Mills particularly the newer larger ones with better process control must come forward to engage with their customers on these issues as such improvement is beneficial to all.
Q: European Union policies place a strong emphasis on the role of packaging in the circular economy and its design to be recycled and/or reused, whereas, In India, there is no much emphasis on the circular economy of packaging. Do you think that any Legislative proposals may ensure that any packaging placed on the Indian market should go for recycling?
It is not right to compare EU conditions with India.
1. There is huge variation in degree of problem. Consumerism in EU has reached a very level with many practices such as portion packs leading to humongous generation of packaging waste. One can surmise EU is a waste generating society.
2. India is still very largely family units having different requirements of purchase, very low degree of packaging penetration, etc. Slowly India too is moving towards EU habits leading to more packaging waste.
3. However, being a late starter has its advantage. India has become aware of the harm packaging waste can cause and has started regulating use.
4. Many technologies to recycle / upcycle waste is rising on horizon daily. Many compostable packaging materials as a replacement / substitution are becoming economically available now.
5. Also, still affordable labour costs make recycling in India more economical proposition.
Q: The construction of many items utilised in day-to-day living, including as furniture, homes, workplaces, hospitals, and other locations, is another creative endeavor of the corrugation industry. India is lagging behind in the use of products constructed of corrugated material. How does FCBM want to encourage "corrugation formation" in Indian society, which might create a significant new source of income for corrugators as well?
Non-Packaging use of Corrugated is evolving opportunity globally. India is handicapped by lack of High-quality high strength Paper normally required for such applications. This in turn is caused by lack of locally available good quality fiber. Rising consumerism & social media will ensure these areas too will soon catch up with global level.
Q: Research & Development is a core exercise to develop a value-added product for the end-consumers securing product margin. How do you evaluate the R & D activity being conducted by FCBM member companies? If we see the last decade of corrugation operations, what major R & D outputs have been delivered to the end consumer market?
R&D in Packaging more a top-down syndrome in India with consumers pushing same. Still withing limited means Indian corrugation industry has risen to demands of consumers with new developments & ideas. With increasing sizes of corrugation companies impetus to R&D will gain.
Kraft Paper Mills shut down operations in North India due to a lack of demand
Delhi | Ghaziabad| Shamli| Uttarakhand | 2 May 2023 | The Pulp and Paper Times:
Paper Mills in north India have stopped production for a week due to declining demand for kraft paper. Paper mills in western Uttar Pradesh and Uttarakhand have closed due to low demand induced by the global recession and rising inflation.
Mr Ashok Bansal, Managing Director, Nikita Papers Limited, told The Pulp and Paper Times, "Yes, we have closed down our production activities from the 29th of April to the 4th of May due to sloppy demand." In addition to Western Uttar Pradesh, paper mills in Uttarakhand, Punjab, Haryana, and Rajasthan will close. The global crisis and increasing inflation had a significant impact on kraft paper consumption."
On the Shutdown by paper Mills, Mr Naresh Singhal, President of The Indian Recovered Paper Traders Association (IRPTA) said that this entire situation arose due to the fact that Kraft paper mills were continuously working only at a difference of Rs 8000/to Rs 9000/ pmt as conversion charges since long. In simple words difference between waste paper prices and finish paper prices was Rs 8/to Rs 9/ per kg,
At the time when Kraft paper mills decided to take shut down the rate of Kraft waste paper was Rs 17000/+ pmt and finished Kraft paper 18+ B.F 100 gsm was Rs 25000/ pmt ex mill which is not viable to continue long” explained by him.
Mr Prajwal Agarwal Director, Gangotri Paper Mills situated at Uttrakhand, said, “There is a shortage in demand globally, inflation is on the higher side, import orders are decreased and even corrugators are not using full capacities. We hope that demand should pick up in next two-three months and this shutdown will correct the market.”
“Recycled paper is no longer only a product of India or China now. Mills in most developed countries have installed recycled paper plants and offering Kraft paper at prices Indian mills cannot even match. I recently learnt that Russian and some other mills from Malaysia are supplying kraft paper at almost 20% lower than India market,” said Mr Naynesh Pasari, Managing Director of Shree Krishna Paper Mills & Industries.
Mr Amrish Singhal, CMD of Muzaffarnagar-based Silvertoan Papers Limited, told The Pulp and Paper Times that in the previous three years, kraft paper production capacity has expanded by about 40% in proportion to demand, which has climbed by barely 18 to 20%. Paper mill owners agreed to shut down paper their operation five days per month until the demand-supply equation was balanced.
"Paper mills have suffered significant losses, and the shutdown has spread to Uttarakhand, Punjab, Haryana, Uttar Pradesh, and a few areas of Rajasthan." To recover the demand situation, we must adopt the pattern of South and Western India paper mills, which observe forced shutdowns every month." Amrish stated.
Talking about the absorbent kraft paper demand, Mr. Vijay Mittal, Director Nachiketa Papers based in Punjab, says, “We are weaving through a very tough time; there is very crushed demand in the laminated industry; thus, we have. We are also taking a shutdown to balanced out our stock.”
Mr. Ashok Bansal further stated that corrugators had received 20% fewer orders than in previous years. In the month of May, we have seasonal demand for Apple and spirits packaging (Wine and Beer). We received a high demand from Himachal Pradesh for the packing of apples in boxes, but owing to a delay in determining the size of the box, corrugators have not made orders; we aim to fix the issue by mid-May.
On declining Export demand, Mr Naynesh Pasari, exclusively discloses that exports can take place in cases where domestic demand in the country you are exporting is high due to non-availability of the paper or supply is less than the demand, or price to export is lower than the domestic production. Mills have come up in Turkey, EU, Indonesia, Vietnam, Malaysia and so on.
“As far as exports are concerned, we have seen that packaging paper can be exported. The exports of floating medium and test liner touched over 2 lakh tons per month during pandemic, and it continued for several months. However, the exports could not sustain themselves for various reasons, and issues like bad odor, logistics, run ability, and quality, so if we work on these aspects, there is a huge opportunity for the packaging industry. India exports to the Far East, the Middle East, Latin America, and African countries, these exports that happened were more out of compulsion than out of choice, because China shifted its policy on raw material imports, so for us to sustain these exports, we need to work on quality, and one cannot emphasize enough odor elimination.” Explained by Mr. Akshay Rathi, Director of Kaygaon Paper Mills during IPPTA AGM in March.
Mr. Akshat Agarwal, Director of Vijay Anand Kraft Paper Private Limited, shared his thoughts in IPPTA AGM, on how paper mills can adapt to the changing demands and how they can use this as an opportunity to grow their market for finished products. He said, “In the last 2-3 years, many mills have come up in the Kraft paper segment with capacities of up to 600 to 700 tons per day, calling for standardization of the products. Instead of making paper based on BF, we have to shift to the international system of paper based on fluting and test liner, correlating with the board properties. There is a need for standardization of reel widths in Kraft paper.
