Overview of

Indian Paper Industry

Presented by

Dr. T. K. Roy
Director, CPPRI

Central Pulp & Paper Research Institute

Saharanpur, U.P., INDIA

PAPER INDUSTRY AT A GLANCE

The industry is fragmented with capacities ranging from 2 to 800 tonnes per day

Total number of Pulp & Paper Mills

Wood Based
Agro Based
Recycled Fiber Based Mills
Pulp & Paper Mills in Operation
Pulp & Paper Mills Closed
Installed Capacity of Mills
Per-capita consumption
(Paper & Paperboard)
Production

666
34
165
467
568
98
6.9 million tonnes
6.0 kg
5.6 million tonnes P&B
0.7 million tonnes - Newsprint

Turnover

Rs. 16000 Crores

Exchequer

Rs. 2500 Crores

Employment

Direct-3 Lacs / Indirect-10 Lacs

1

GROWTH OF PAPER INDUSTRY

First mill in the country was commissioned in 1812 in Serampur (W. Bengal).
The initial development & growth of industry in the 19th century was affected by
shortage of wood (soft wood) in the country.
In 1914 the development of pulp making processes based on bamboo lead to
rapid growth of the industry and by the end of the 1950s installed capacity increased
to 137000 tonnes.
In the 1970s excise concessions were given to small agro based mills, which resulted
in a rapid increase of small mills and capacity.
In the late 1980s the industry was in a severe oversupply situation, capacity utilisation
rates being around 60 %.
In early 1990s the government reversed the policy, making large units more
competitive (e.g. by removing excise concessions for agro based mills).

GROWTH OF PAPER INDUSTRY .. Contd

Paper capacity and production in India 1950-2005

8.00

Capacity

6.00
Production

4.00

Million tonnes

2.00
0.00
1950

1960

1970

1980

1990

2000

2005
3

Nearly 1.25 million tones of capacity is closed

Reasons for Closed Capacities

Technological obsolescence
Environmental issues

Total Paper and Paperboard demand in India

CAGR of nearly 5.5%
in the past 3 years.

Other
varities
5%
Writing &
printing
grades
40%

Industrial
paper
55%
Writing & printing grades
Industrial paper
Other varities
5

Paper, Paperboard & Newsprint

Year

Production

Imports

Exports

Consumption

1995-96

3.81

0.42

0.09

4.14

1996-97

4.11

0.59

0.07

4.63

1997-98

4.58

0.65

0.06

5.17

1998-99

4.81

0.56

0.06

5.30

1999-00

5.5

0.55

0.10

6.1

2000-01

5.5

0.56

0.13

6.02

2001-02

5.57

0.56

0.29

5.98

2002-03

5.87

0.69

0.23

6.33

2003-04

6.24

1.01

0.23

7.0

2004-05

6.52

0.87

0.26

7.15

All figures in Million Tonnes

STRUCTURE OF PAPER INDUSTRY

Categorization of the Mills Based on Cellulosic
Raw Materials
467
500

Number of Mills

400
300

165
200
100

34

0
Wood Based
Mills

Non Wood
Based Mills

RCF Based Mills

PER CAPITA CONSUMPTION

The per capita paper consumption in India is 6 kg compared to 324 kg in USA, 25 kg in
Indonesia, 250 kg in Japan and 37 kg in China

Per Capita Consumption

350
300
250

Kg

200
150
100
50

P
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A

FIBRE RESOURCES
India is a fibre deficient country. Due to lack of wood resources, the paper industry is
utilizing a wide verities of raw material for paper making ranging from forest based raw
material to annual plant and recovered paper.
7%
9%

84%

1970

30%
39%

2000

31%
34%

38%

2005
28%

Forest based

Agro based

Recycled fiber
9

TECHNOLOGICAL STATUS

Obsolescence of technology in most cases.

Lack of eco friendly state of the art processing technologies.

Uneconomic scale of operation.

In an international comparison, even the largest machines are medium-size

The average capacity of paper machines is about 14000 t/a
Most of Indian paper machines have a trim width from 1.5 to 3.5 m
There are only 9 paper machines with trim width of 5 m or more
Only 14 machines have capacities 50000 t/a or more

It is not possible to have very high speed paper machine, i.e. >1500 mpm for
type of raw material available in India

Similarly for adoption of new papermaking technology quality of raw material and
mill size are the major limitations.

Except the wood based integrated mills and few agro/RCF mills the level of
automation and process control is very low in most of the mills
10

ENVIRONMENTAL COMPLIANCE - ISSUES

The major environmental issues :

Control of color and AOX discharge

Control of release of Non Condensable Gases

Disposal of Solid waste viz. Lime Sludge/Fly ash

(NCGs).

(CREP) for Paper Industry was introduced in the year 2003 by MoEF
(CREP) to be complied by entire industry between 2005 to 2008.

11

CREP LARGE MILLS

Environmental issues

Implementation Schedule (from April

2003)

Discharge of AOX kg/ tpaper

AOX 1.5 kg/ tpaper within 2 years

AOX 1.0 kg/ tpaper in 5 years

Installation of Lime Kiln

Within 4 years

Waste water discharge m3/ tpaper

< 140 m3/ tpaper within 2 years

< 120 m3/ tpaper within 4 years for units installed
before 1992

< 100 m3/ tpaper for units installed after 1992

Odor Control by burning the reduced sulfur Installation of odor control system within 4
emissions in the boiler / lime kiln
years
Utilization of treated effluent for irrigation

Wherever possible

Color Removal from the effluent

IPMA to take up project with CPPRI

12

CREP SMALL MILLS

Environmental Issues

Implementation Schedule
April 2003)

(from

Compliance of standard of BOD, COD & Either achieve the discharge Standards
AOX
of BOD, COD & AOX by installation of
chemical recovery system or utilization
of black liquor with no discharge from
pulp mill within 3 years or
shift to waste paper
Up-gradation of ETPs so as to meet Upgrade the ETP within one year so as to
discharge standards
achieve the discharge standards
Waste water discharge/ tonne of paper
Utilization
irrigation

of

treated

effluent

Color Removal from the effluent

< 150 m3/ tpaper within 3 years

for Wherever possible
IPMA to take up project with CPPRI
13

ISSUES BEFORE INDIAN PAPER INDUSTRY

High cost of transportation and power
Inferior pulp & paper quality

Low scale of operation

Low capacity utilisation

High capital costs

Issues &
Challenges

State of art equipment &

machineries

Emerging Environmental issues

High costs of raw materials

Only 20% of the total used paper is recycled

in India compared to a global recycling
average of 40%

14

DEMAND & SUPPLY SCENARIO

Projected Demand, Supply and Short fall of Paper & Paperboard

14
12

Demand Supply Shortfall

14.0

14.85

Demand

Supply Growth @ 3.4%/annum

11.1

8.33
6.24

8.01

6.79
5.75

5.39

6
3.09

4
1.54

Paper Million Tonne

Paper Million Tonne

Shortfall

9.1

8.0
6.0

6.7
4.9

8.5

6.1

4.5

4.0
1.3

2.0

0.49

12.2
10.9

10.0

9.46

10

Supply

12.0

Demand Growth @ 6%/annum

Paper Million Tonne

16

0.6

0.4

0.6

0.0

2005

2005

2010

Year

2015

Source - Financial Express,19 Feb 2006

2020

2010

2015

2020

Year

Source Jaakko Poyry Report 2002

16

Projected Demand & Supply of Various Grades of Paper & Paperboard

p
Industry
2020

Demand

Demand

2015

Others

Demand

2010

Cultural

Demand

2005

2020

Industrial

Demand

Cultural

Others

Supply

Supply

2015

Demand

Supply

2010

Demand

Supply

2005

Demand

Supply
0.00

4.00

6.00

8.00

10.00

12.00

Source - Financial Express, 19 Feb 2006

Supply

14.00

Paper Million Tonnes

Supply

0.00

Paper Million Tonnes

2.00

Supply

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

16.00

Source Jaakko Poyry Report 2002

17

Projected Demand & Supply Shortfall of Newsprint

3.88

4.00

Demand

Supply

Shortfall

Demand

2.50

Supply

Shortfall

2.40

3.50

1.90

2.50
2.00

2.16

1.88
1.62

1.30

1.50

1.20
1.02

0.89

1.00

1.80

2.00
2.68

0.86

0.73

Newsprint Million Tonnes

Newsprint Million Tonnes

2.90

3.00

1.60
1.50

1.40
1.20
1.00

1.00

0.73

0.60

0.47

0.60

0.50

0.50

0.50

0.00
0.00

2005

2010

2015

2020

Source - Financial Express, 19 Feb 2006

2005

2010

2015

2020

Source Jaakko Poyry Report 2002

18

CELLULOSIC RAW MATERIALS - FUTURE TRENDS

28%

28%

38%

40%

84%
34%

2005

32%

Wood based

Recycled Fiber

Production 6.5 Million Tonnes

2010
Agro based

Demand Projected - 8.3 Million Tonnes

19

INDUSTRIAL WOOD DEMAND SCENARIO

The paper industrys wood demand is expected to grow from 5.9 million tonness to 7.9
million tonness by 2010, and to over 10.6 million tonness by 2015.
~0.6 million hectares and 0.8 million hectares of land will be required by 2010 and 2020
respectively to meet paper industries wood demand.

14

Million tonness of wood

10.6
Depends on agro/ waste paper use
7.9

12
10
8

5.9

6
4
2
0
2005

2010

2015

20

AVAILABILITY OF AGRICULTURAL RESIDUES

Availability of agricultural residues is good, but there are many limitations to their use

Availability

Million Tonnes

Since 1970 agricultural residues have emerged as significant alternate raw material with
45
44 being 29%.
total fiber use share

40
The main agricultural residues
(wheat
35 and rice) and grasses.
30
25
20
15
10
5
0

utilized by the paper industry include bagasse, straws

Requirement by Paper Industry

7
4
Agro Residue

2003

2010
21

RECYCLED FIBRE - RECOVERY & RECYCLING

Import of waste paper is continuously increasing
At present more than 80% of consumption is met through imports.

Million tons

6
4
2
0
1995

2000
Recovery

2003
Imports

2010

Consumption
22

INDIAN PAPER INDUSTRY IN GLOBAL

PERSPECTIVES

INDIAN PAPER INDUSTRY IN GLOBAL PERSPECTIVES

India is among the top fifteen global producers
Paper & Board Capacity (2000)
US
China
Japan
Canada
Germ any
Finland
France
Kore a
Sw e e den
Indone sia
Brazil
Rus sia
United Kingdom
Taiw an

INDIA

India
M exico
Thailand

South Africa
Arge ntina
Colam bia
Chile
Ve ne zuela
0

20000

40000

60000

80000

100000

120000

000 tonnes

Aus tralia

Source : ICRA report to IPMA : 2000

24

Indian Paper Industry in Global Perspectives Contd

World Paper & Board consumption is dominated by three major regional blocksNorth America, Western Europe & Asia.

The Paper & Board production in India is nearly 5.5 million tons as against world
paper production of 340 million tons.

India consumes nearly 5% of the Asian and 1.6% of the worlds consumption of paper
and paper board.
PERCENTAGE OF WORLD PAPER PRODUCTION

Europe,
28.0%

India, 1.6%

Rest, 9.0%

North
America,
31.0%

Asia, 30.4%

Indian Paper Industry in Global Perspectives

Contd

CONSUMPTION OF BASIC INPUTS

Input Norms

Mills in India
(Wood Based)

Mills Abroad

2.0- 2.4

1.8-2.0

Energy, GJ

23-37

18-22

Water, m3

120-200

20-60

Chemical Recovery,%

85-95

95-98

Manpower, no.

14-20

5-7

Technical manpower, no.

Fibre Recovery, %

15

40

(per tonne basis)

Raw material, tonnes

26

COMPETITIVENESS OF THE SECTOR

As compared to USA, Europe, the paper industry in India is far below the
quality standards of the products.

It is not as competitive as in other Asian countries such as ; Japan,

Indonesia, Thailand, Malaysia & China.

The paper industry in India is less competitive as compared to similar

sectors such as; cement and capital goods.

The

possible reasons which makes paper industry less competitive

compared to other similar sectors are
(i) Availability of good fibrous raw materials;
(ii) Level of technology.

27

INFRASTRUCTURE FACILITIES
Lack of required infrastructure such as; roads transports, railways,
communications and sustained power supply.

Main reason for lack of availability of desired infrastructure is

Scattered location of paper mills.
Criteria for selection of site was raw material instead of infrastructure.

Ministry of Urban Development, Ministry of Transport, Ministry of

Shipping & Ministry of Power can create the desired infrastructure.

28

QUALITY STANDARDS
The quality standards in other countries are maintained as per
customer preferences

In India we still go by BIS norms which are much below the

international standards.

General perception about the quality of products produced in India is

poor.

As far as Printing

papers and the Newspaper segment also by &

large gives preference to the imported Newsprints.

The Indian paper industry uses 20 30% more raw materials; about
30% more energy, 200% more water & 10% more chemicals.

29

STRATEGIES FOR IMPROVING COMPETITIVENESS

INDUSTRY

GOVERNMENT

Raw Material Sourcing

Policy for Industrial Plantation

Technology Up gradation &

Restructuring

Technology Up-gradation
Scheme

Product Focus

Environmental Policy

Environmental Credentials

Rational long term policy on

Duties and Taxes

IMPROVING
RETURN/MARGINS

Implication of WTO

Capacity Expansion

Rational pricing policy for

Power & water
30

Raw Material Requirement for Sustainability of the Industry

Large Wood Based Mills
There are 22 mills producing 1.9 million tons of paper.
At 6% growth rate additional fiber requirement to meet projected demand is 2
million tons of wood.
Current plantations are not sufficient to cover the industry needs. Any shortfall
will have to be met through pulp imports.
Major Capacity Expansion Greenfield
Name of the Mills

Capacity
t/day

Cost (Rs. Crore)

A. P. Paper Mills

750

1800

J.K. Papers

180

235

West Coast Paper Mills Ltd.

300

230

ITC

600

2500

HPC

900

2800

31

Raw Material Requirement for Sustainability of the Industry

Agro Based Mills
Wheat straw & bagasse will be the mainstay raw material for the sector.
By 2010 , agro based fibre requirement to meet the demand would be 7.0
million tons.
Availability of surplus bagasse for paper industry is only 10 million tons and
difficult to be increased under present operational conditions of sugar mills.
Wheat straw availability is

sufficient (22 million tons) therefore further

expansion should be expected to be based on wheat straw.

32

Raw Material Requirement for Sustainability of the Industry

Recycled Fibre
By 2010, the recycled fibre requirement to meet the demand will be 6 million
tons.
If the present recovery rate is enhanced from 18% to 25% by 2010, availability
from indigenous sources will be 1.5 million tons and 4.5 million tons will have to
be met through imports.
Challenges before the Recycled Fiber Based mills
The availability of good quality waste paper at competitive price
There is a need to take immediate measure to organize the existing waste paper
recovery system to increase the recovery rate from present 18% to 30% to be
sustainable.

33

Technology Improvements Needed

Wood Based Mills
Enhancement in productivity through adoption of advanced production
techniques such as RDH/Super Batch.
New and efficient pulp washing systems should be adopted.

ECF bleaching with ClO2 followed by peroxide is recommended .

Enzyme bleaching should be adopted to reduce chemical cost and
discharge of chloro organics.

Breast roll and blade gap formers improve paper quality and drainage
and are important for Indian raw materials.
A good press section is important in India because fibers are short.
Extended nip is the only good solution for Indian slow machines. One
shoe nip press section would be the best technology.

34

Technology Improvements Needed

Unsupported web run is normal in Indian dryer section when speed
is higher than 600 meters/min, there should be single tier dryer
groups to avoid web flutter and breaks.
Soft calendar are highly recommended and they could save bulk and
improve opacity, strength and smoothness however this requires
good CD profiles.
Films coaters and on-line calendars are recommended with good
CD profiles.
Soft roll rewinders might be a low cost alternative to improve roll
quality of this paper or coated papers.
Process automation level must be improved.

35

Technology Improvements Needed

Agro Based Mills
Technology improvement is needed for upgradation of quality of baggase and
adoption of efficient washers for straws & bagasse.
Installation of chemical recovery to meet environmental compliance.
Recycled Fiber Based Mills
Inclusion of high density pulpers
For efficient contaminant removal, introduction of high density cleaners ,
turboseparators, fine slot screens and reverse cleaners in the fiber line.
Incorporation of modern deinking cells for production of deinked pulp
Screw press and dispersion system to reduce dirt and specks in DIP
Bleach towers for post bleaching of DIP

Improvements in paper machine area are same as in wood based mills.

36

Requirements for Environmental Compliance

Wood Based Mills
Modified Technology for Pulping & Bleaching
Improved Pulp washing
Efficient use of water , reuse & recycling
Installation of odour control technology
Solid waste management & Disposal of
hazardous waste

Up-gradation of ETP & optimal use

Agro Based Mills
Installation of chemical recvcery or alternate option
Improved pulp washing
Oxidative bleaching
Reduced water consumption
Other waste management practices
Up-gradation of ETP & optimal use.
37

Requirements for Environmental Compliance

Recycled Fibre Based Mills
Reduced water consumption through closure of water loops.
Waste management
Up-gradation of ETP & optimal use.

38

Newsprint Industry - Issues

Indian raw materials i.e. hardwood, reed, bagasse are not suitable for
manufacturing TMP pulp.

Raw material and energy costs are high for CMP based newsprint mills.

Improvements needed
More use of domestic and imported ONP and OMG for deinking process to
minimise cost of production.

Identify better raw materials like Eucalyptus globulus and E. grandis for
producing chemi mechanical pulps.

There is a need to raise organised plantation of these species.

39

Implication of WTO
At present the MFN applied rates of Indian pulp & paper products
fall with in the range of 0 to 15 percent. With 251 lines having 15
percent tariff (or import duties), 18 by 5 percent and 9 with no
protection at all.

If Swiss formula with value of coefficient being 15 gets accepted

than all those tariff lines whose applied rate at present is 15
percent needs careful scrutiny.

Policy makers may need to insist that any negotiations on market

access are acceptable only on a pre-condition that all NTBs be
removed under a fast track approach. This can be a powerful
negotiating stand of India in the ongoing trade negotiations

40

ENVIRONMENTAL CREDENTIALS
European Union label is used in many products. In paper industry it is used e.g. in copy
papers. Criteria are related to pulp and paper industrys emissions to water and air,
bleaching methods, energy consumption, etc. AOX level should be less than 0.3 kg/ton
of paper. Fibre raw material for paper should be waste paper or virgin fibre from
sustainable managed forests. Many European countries have additionally their own
eco-labels.

Similar concept could be developed for Indian conditions using overall

environmental impact of the mill as criteria. The fibre base could be wood, waste
paper or agro, as long as the paper is produced with an environmentally
acceptable process.

41

SUGGESTED INITIATIVES

Technology Up-gradation/ Modernization

Modernization Required
Wood Based Mills
By and large modernized through its own resources in order to meet CREP requirement, however
the paper machine section need major rebuild up-gradation.
Needs restructuring to 1000t/day capacity.

Agro Based Mills

Immediate attention required for
pulp washing
paper machine
black liquor handling and effluent treatment.

Recycled Fibre Based Mills

Need to be modernized by introduction of
deinking cells
pulp cleaning
slots screening equipment
paper machine rebuilds.
43

ACTION PLAN

44

ACTION PLAN.. Contd

Raw Material
Wood

Government

Industry

9 Revision of Forest Policy so that

plantation can be increased.

9 Cooperation with farmers and State

Forest Dept.

9 Degraded forest lands should be

identified by state govt. and be
offered to indutry on long leases of
plantations.

9 Search for foreign partners.

9 Public private partnerships

9 FDI in plantation programmes (with

no change in land use)
9 Public private partnerships

Recycled Fibre

9 Allow duty free imports of waste

paper
9 Encourage voluntary agreements to
increase paper recovery

9 Long
term
contract
printing/converting waste

with

9 Global sourcing, foreign partners

9 Sorting of imported mixed waste
9 Fibre fractionation to separate long
fibres

Agro Fibres

9 Equal subsidy be made available to

paper industry at par with energy
subsidy of bagasse

9 Restructuring needed due to quality

and environmental reasons
9 Develop pulping and papermaking
technology based on non-wood fibre.

9 Funds for technology development

45

ACTION PLAN.. Contd

Government
Finance

Research
& Development

9 Allow duty free imports of new and 9 Better access to international financing
second hand machinery/equipment for
9 Seek for foreign partners
technology upgradation.
9 Focus on R&D to improve quality and to
9 Encourage cooperation & networking
meet customers requirement.
inside the forest cluster and other
industries to make the sector more 9 More closure to international connections
competitive.
9 Closure cooperation and interaction
between CPPRI & Industry
9 R&D funding should be increased to 1%
of turnover primarily through funding by
industry.
9 Better availability and quality of coal.

Energy policy

Environmental Policy

Industry

9 Cogeneration in pulp & paper mills

9 More uniform energy policy by states

9 Uniform policy as regards to nonbiodegradable materials.

9 Eco labeling scheme based on
sustainable
raw
material
base
(wood/waste
paper
/agro)
and
environmental friendly processes.

9 Bigger mills and modernization to meet

environmental standards.
9 Actively participate development of Eco
label schemes so that industrys can be
taken into consideration.
46