india's pulp-paper industry
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Let us look at India's pulp-paper industry now.TRANSCRIPT
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A Review of Indian paper industry
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The global pulp and paper industry consists of about 5000 industrial pulp and paper mills, and an equal number of very small companies.
Broadly, the industry can be classified into two segments:
- Paper and paperboard (writing, printing, packaging and tissue). The writing and printing paper market can be further divided into coated and uncoated segments.
- Newsprint mainly uses for newspapers, flyers, and other printed material intended for mass distribution
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The US is the largest market for paper product and commands high per capita consumption.
Asia’s main markets are China, Japan, India, Malaysia, Singapore and Thailand.
In 2005, Japan had the highest per capita consumption (247 kg), followed by Singapore (228 kg), Malaysia (106 kg), Taiwan (51 kg) China (42 kg), Indonesia (22 kg) and Philippines (16 kg).
India’s per capita consumption is estimated to be 7.0 kg in 2006.
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312.0
247.0228.0
106.0
51.0 42.022.0 16.0 14.0 6.57.0
324.0
USA Japan Singapore Malaysia Thailand China Indonesia Philippines Viet nam India
Consumption per capita,
2005 vs. 2006
(figures in Kgs)
Category Capacity Range Number of units Capacity (TPA)
Small Up to 10000 299 12,90,382
<2000 69 75,522
2000–5000 107 2,96,980
5000–10000 123 9,17,880
Medium 10000–20000 116 16,69,460
Large >20000 70 38,93,048
Category-wise paper mills in India
(figures in number)
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Indian Pulp and Paper has
shown significant
improvements.
There are still many
challenges & a long way
to go.
Capacity utilization of the
industry is just 79%, due
to old technology.
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India is the 15th largest paper producer in the world. It provides employment to nearly 1.5 million people and contributes INR25.0 billion to the government's exchequer. In last 55 years, the number of paper mills has increased from just 17 mills in 1951 to more than 666 units engaged in the manufacture of paper and paperboard, out of which nearly 568 are in operation by 2006. - 194 mills under purview of Board of Industrial and Financial Reconstruction (BIFR); nearly 60 mills with a capacity of 1.3 million tonnes is closed.
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Indian paper mills are categorised
based on the raw materials -
wood/forest based mills, agro-residue
based mills and wastepaper-based
mills.
- Due to the increasing regulation and
raw material prices, the companies
are increasingly using more non-
wood based raw material over the
years. In 2006, around 70 % of the
total production is based on non-
- wood raw material.
Recycled
Paper
38%
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Due to high growth rate, Indian paper industry is very attractive
for the foreign players
6.2 6.4
7.4 7.78.1
5.25.6
5.9 5.9
6.5
2002-03 2003-04 2004-05 2005-06 2006-07
Paper and Paperboard - Production in India, 2002-06
(figures in million tonnes) • India is self-sufficient in manufacture
of most varieties of paper and
paperboards.
- Import is mainly related to certain
speciality papers such as light
weight coated variety of paper,
cheque paper, etc.
- Due to the scarcity of raw material,
the companies also need to rely on
imported wood pulp and waste
paper.
• In last 5 years, capacity was
increased mainly through expansion
and modernisation of the existing
facilities rather than setting up
greenfield projects.
Installed Capacity
Production
0.2
0.3
0.2
0.3
0.4
0.2
0.2
0.30.3
0.3
2002-03 2003-04 2004-05 2005-06 2006-07
Import
Export
Paper and Paperboard - Import-Export, 2002-06
(figures in million tonnes)
*
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• The per capita consumption of paper in India is very low i.e. 7 Kgs in 2006, as compared to an average consumption of 28 Kgs and 58 Kgs in Asia and world respectively. The per capita consumption is expected to increase to 12 Kgs by 2020.
• The domestic paper market is dominated by large players owing to their size, brand value and financial strength. In 2006-07, the top 10 players control around 60% of the market in term of capacity.
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Various macro-economic factors like • national economic growth, • industrial production, • promotional expenditure, • population growth and the government’s allocations
for the educational sector influence the demand for paper
- The growth in paper consumption is directly related to GDP growth in the country. In the past, it has shown the 1:1 relationship with the GDP growth rate. - With expected GDP growth of 9-9.5%, the demand for Newsprint and Writing & Printing Paper is expected to grow at the same rate. Continued availability of raw materials would be a big challenge for the industry in the next 5-10 years.
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According to the Indian Pulp and Paper Technical Association (IPPTA), the paper industry is expected to fall short of demand by 1.1 million tonnes by 2010-11 due to raw material constraints. According to ITC’s estimates, the total demand for paper is around 8.0 million tonnes and is expected to grow to 10.0 million tonnes by 2012 and 21.0 million tonnes by 2020. According to Indian Paper Manufacturers Association (IPMA), consumption of paper in India is set to double from the current 7.0 million tonnes per annum by 2015.
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Demand driven P&P industry will be stressed by pressures of • quality, • availability & • environmental considerations. Society, CREP & sustainability issues will demand a change in the manner in which industry conducts itself today
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Chip size control
Dust & sound management
Raw material cleaning
Raw material Storage
Segregation of waste paper
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Pulp quality variation: H- Factor Control
Adoption of modern pulping digesters
Adoption of Single/two stage oxygen de-
lignification
Control of odour in conventional batch
digester
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Elimination of elemental chlorine &
hypochlorite from bleaching sequence
Introduction of ECF bleaching
Introduction of oxygen extraction stage in
bleaching (several mills don’t have
this)
Adoption of enzyme pre-bleaching
Look at closing bleach filtrate cycles.
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Eliminate DCE for Kraft liquor evaporation (63
per cent Indian mills have DCEs).
Introduce concentrators for black liquor
concentration above 72 per cent
Look at BL viscosity reduction opportunity
Put efforts on NPE, silica and scales
management
Introduce lime reburning systems
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Indian mills are weak in instrumentation &
process control. This results in wide
variations in quality of sectional outputs.
Variation in quality of inputs,
poor/inefficient/outdated multiple
equipments multiplies the challenges.
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On an average, recovered energy in
Indian mills meets only 45 per cent of
energy meets of pulp and recovery
section (in good global mills there is
energy excess)
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• During the previous year, pulp prices went up but
companies were unable to pass on the full increase to
buyers. However, most companies raised prices thrice
this year, to pass on raw material push. They are
reporting better performance, quarter-on-quarter.
• “The fact that companies are able to pass on the price
increase from time to time shows the demand-supply
gap is narrowing. Companies are also looking at
another round of price increase.
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The domestic paper industry is estimated at around 10 million tonnes yearly. Of this, the writing and paper segment accounts for 3.8 mt, the packaging grade paper segment is around 4.5 mt and the newsprint industry about 1.7 m t.
The domestic yearly per capita consumption of paper is only 9.2 kg, much lower than many other developing economies. The figure in China and Indonesia is estimated at 42 kg and 23 kg, respectively. However, all segments of the industry are growing at eight to nine per cent or above.
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The industry is likely to see supply pressure by the end of the year.
The supply overhang in the paper industry, caused by the bunching of new capacities by leading companies such as BILT, TNPL and West Coast in 2010, seems to be getting over.
After having faced overcapacity last year, the industry is likely to see supply pressure by the year end.
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There were many capacity additions last year, but nobody is carrying stocks or operating at a lower capacity. The market is absorbing whatever is being produced.
Demand is expected to exceed supply in 2012 and 2013,” said A Velliangiri, deputy managing director, TNPL, which has writing and printing paper capacity of 400,000 tonnes yearly. Others in the industry echo Velliangiri� ’s view.
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Sustained fibre supply-Virgin & Secondary
Sustained water supply
Sustained energy supply & quantum
reduction in specific energy use
Colour & chloro - organics in wastewater
Odour & VOC’s in emissions
Solid wastes management
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Indian Paper Industry
Strong economic growth Low consumption per capita
Printing Industry Increased government focus on
education
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Low consumption per capita
• India accounts for 15% of the world
population, it consumes only 1% of the
world paper consumption.
- The paper consumption in India is just 7
Kgs per capital, as compared to global
average of 50 Kgs per capita.
• With the increasing literacy rate and strong
economic growth, the per capita
consumption of papers is expected to
increase in the future
- According to Economic Survey, per
capita spending on education, as a
percentage of GDP, has increased from
1.2% in 1983 to 4.4% in 2003, at a
CAGR of 7.1%.
• The impact of just 1 kg increase in per
capita consumption would lead to increase
in demand by 1.1 million tonnes of paper.
Paper Per Capita Consumption in India, 2003-07
(figures in Kgs)
4.44.8 4.6
6.0
7.0
2002-03 2003-04 2004-05 2005-06 2006-07
7.37.8
8.6 8.7 9.0
7.78.2
8.89.3
9.89.2
9.6
10.511.0
2007 2008E 2009E 2010E 2011E
Paper – Demand vs. Supply, 2007-11*
(figures in million tonnes)
Capacity Demand
(7Kgs per capita)
Demand
(8Kgs per capita)
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West Coast Paper Mills (WCPM) has recorded a 88 per cent rise in its net profit at Rs. 28.52 crores in 2000-01 (Rs. 15.20 crores). Sales and income from operations rose 7 per cent to Rs. 351.33 crores (Rs. 328.68 crores). Profits jumped on better realisations coupled with an increase in demand for paper and paper board.
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• ITC Bhadrachalam Paperboards had expanded capacity from 62,500 tpa to 1.82 lakh tpa. Following the infusion of around Rs. 150 crores from ITC, the company has carved a niche for itself in the export market for coated paperboards and specialty paper.
• Tamil Nadu Newsprint (TNPL) boasts of being among the most efficient players in the newsprint industry. In 2000-01, the company reported sales of Rs. 596.40 crores and a net profit of Rs. 76.40 crores. Promoted jointly by the Tamil Nadu Government and IDBI, TNPL manufactures newsprint and printing/writing paper with a capacity of 1.8 lakh tonnes annually. TNPL uses bagasse as the main input. It is now going in for de-bottlenecking to enable capacity increase by around 25 per cent.
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Ballarpur Industries Limited (BILT) is India's largest paper company and the only Indian company to rank amongst the top 100 paper companies in the world. BILT, part of the $3 billion Avantha Group, is India's largest manufacturer and exporter of paper, with a strong presence in all segments of the usage spectrum, including writing and printing paper, industrial paper and specialty paper. The company has a diversified production infrastructure with six manufacturing units spread across the country.
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The company has 6 units, together with a capacity of 480,000 tonnes and a pulp
mill of capacity 100,000 tonnes manufacturing rayon grade pulp, in the state of
Andhra Pradesh (Kamlapuram Unit).
BILT is expanding its production capacity in both coated and non-coated paper,
to take it to around 1.0 million tonnes by 2009-10. With the increase in overall
capacity, the company expects to double its turnover by 2009-10.
◦ In October 2007, the company announced to increase the capacity of its
coated wood free paper unit at Bhigwan in Pune by adding 190,000 tonnes.
After the expansion, the total unit capacity would increase to 315,000 tonnes.
◦ The main plant and machinery and its installation would be supplied by Voith,
Germany, while some equipment will be sourced locally from suppliers like
L&T, etc.
In July 2007, the company also initiated a restructuring plan, under which it
would transfer 3 manufacturing units at Bhigwan, Ballarpur and Kamalapuram, to
a separate company called BILT Graphic Paper Products, which would be
transferred to Ballarpur Paper Holdings BV (BPH) after court approval. By this
exercise, the company would transfer its commodity business, which is capital-
intensive and would focus on the speciality and consumer-focused products
business.
Ballarpur Industries Limited (BILT)
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Installed Capacity, 2002-06
(Figures in ‘000 tonnes)
386.0 386.6406.6
480.0 480.0
358.9
457.5
407.3383.4369.9
2002-03 2003-04 2004-05 2005-06 2006-07
Installed Capacity – Paper unit, 2005-06
(Figures in ‘000 tonnes)
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To choose eco-friendly paper:
Know
1. The paper’s fiber source
2. Chemicals processing
3. Ability to be recycled or break down in a
landfill.
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