IPMA Newsletter | Pulp & Paper Industry News

From Secretary General’s Desk

The 11th annual general meeting of Indian Paper Manufacturers Association held on January 07, 2010 at New Delhi witnessed a distinguished congregation of stalwarts of the industry, thought leaders, technocrats and senior government officials.

Dr. Ajay Mathur, Director General, Bureau of Energy Efficiency, Ministry of Power, Government of India consented to be the chief guest on the occasion. Achieving greater energy efficiency has been one of the key endeavours of IPMA members for some time now and the assurance of full support of BEE to the industry by Dr Mathur came as a warm New Year message for all assembled.

Mr. David Walker, MD of Kauri Capital Pte. Ltd. Singapore and one of the most well known thought leaders on the paper sector made a well researched presentation on the most topical subject of “Competitive Forces Shaping the Indian Paper Industry”.

On the occasion, the IPMA Committee, main governing body was reconstituted with appointment of Mr Madhukar Mishra, MD Star Papers as the new President of IPMA. Mr Yogesh Agarwal, COO BILT & MD (SFI) took over as the new Vice President.

Both Mr Mishra and Mr Agarwal represent the relatively younger face of IPMA and their appointment signals the onset of a new change at IPMA. Indian paper industry is treading fast to carve its rightful place in the world paper market. However, with per capita consumption of less than 10 Kgs, India has a long way to go. The dynamism of both Mr Mishra and Mr Agarwal will ensure that paper industry in India get the much required enabling policy framework so as to be competitive globally.

During the last two years, Mr M L Pachisia who just passed on the mantle of presidentship to Mr Mishra, deftly steered IPMA through some of the difficult times that Indian industry faced following global economic slowdown. IPMA secretariat places on record its gratitude to Mr Pachisia.

Strong industrial production, increased domestic sales and encouraging international market are expected to sustain the growth momentum in this year and India Inc is expected to replay its phenomenal growth story, wiping away any traces of economic recession. It is also widely perceived that demand and consumption of paper are steadily on rise in India. Country presents a developed market and right opportunities for further growth and demand push.

On this optimistic note I wish you a very happy, productive and prosperous New Year.
- R. Narayan Moorthy

11th AGM of IPMA – A Photo Feature

True to its stature as one of the foremost events for the paper industry in India, the 11th annual general meeting of IPMA was a well turned out affair. Here are just a few glimpses from the occasion.

IPMA Committee Meeting in progress

Paper industry to double in size by 2020

Tracking a growth rate of around 7.5% per annum, the paper demand is expected to cross the 20 million tons mark by 2020 from 10 million tons currently.

“The domestic demand for all varieties of papers in India is estimated at around 10 million tons per year. Of this, writing & printing papers account for approx. 3.8 million tons, packaging grades for approx. 4.5 million tons and newsprint for about 1.7 million tons. Given India’s projected GDP growth, the renewed thrust on universal education and the changes in lifestyle, paper demand per capita will gradually move to at least 20 kg per capita by 2020, requiring more than double the quantity of paper that we currently produce and consume”, said Mr M L Pachisia, President Indian Paper Manufacturers Association (IPMA) at the 11th Annual General Meeting of IPMA.

To meet this demand, the Indian paper industry continues to expand its capacity. “Over the last 2 years alone close to one million tons capacity has been added at an investment of nearly Rs.8000 crore. Further expansion projects for additional capacity of half a million tons are already in the pipeline. These capacity additions have been somewhat ahead of demand growth resulting in over supplies currently. However, we are sure that increasing demand will catch up with the increased capacities soon” added Mr Pachisia.

Currently the per capita consumption in India is only 9.2 kg per capita, which is much lower when compared to even other developing economies. For example, per capita consumption in China & Indonesia is estimated at 42kg and 23kg respectively.

Social forestry initiative crosses 4 lakh hectares however raw material scarcity persists : Mr. M L Pachisia

A false perception as destroyer of forests continues to be associated with the paper industry. The fact is that the paper industry is already wood-positive as it is planting more trees than it is consuming, said Mr M L Pachisia, outgoing President Indian Paper Manufacturers Association (IPMA) at the 11th Annual General Meeting of IPMA.

Countering the charge of paper industry not being sustainable, Mr Pachisia said as a regenerative resource, wood is far more environmentally sustainable than many other natural resources. While wood is an easily replenishable resource, paper is biodegradable and recyclable.

As a part of the agro-forestry initiative, IPMA members have set up R&D centres for clonal propagation of high-yielding and disease resistant plants. Several million clonal or seed routed saplings are produced in these nurseries and made available to farmers at subsidized rates for plantation on their marginal lands. These plantations mainly use degraded and marginal lands of farmers, thus providing them with additional income source.

This industry led social forestry initiative has brought more than 400000 hectares under pulp wood plantations so far. In the last two years alone, IPMA member mills have arranged plantations covering 125000 hectares and have set themselves an ambitious target of further plantations covering 70000 hectares during the current calendar year.

“While the social forestry model adopted by the industry has helped improve plantations and pulpwood availability to some extent, these are by no means sufficient to meet the growing need for capacity expansions. Indeed lack of stable and viable sources of raw materials is becoming a major impediment to the Industry’s survival and growth”, added Mr Pachisia.

Major paper producing countries of the Latin America, Europe and Asia including China, Indonesia, Malaysia, etc have adopted a policy of granting forest concessions to large paper mills to plant, protect and harvest pulpwood in a cost effective manner.

In absence of similar enabling policies, paper mills in India have to necessarily depend upon small and scattered plantations developed through Industry’s social forestry initiative or Government controlled forests. In the process, the cost of collection and transportation works out to be greater than cost of the pulpwood itself. As a result, cost of raw materials in India has been continuously going up and has become most uncompetitive in comparison to the major paper producing countries of the world.

CII as well as IPMA have conducted a number of in-depth studies on all-round benefits that a public- private partnership for organized plantations can bring to all sections of the society. The Country has huge revenue wastelands which are lying fallow and un-productive; only a small fraction of it is sufficient to develop meaningful plantations.

“India also needs to put in place a framework and infrastructure for separation and collection of waste paper for recycling. The Country currently has to depend upon huge quantity of waste paper imports, which can be minimized if required infrastructure is created. This issue has also been taken up by the Industry at the highest level, based upon which a pilot study has been commissioned for Delhi and its environs. We do hope that once this report becomes available, urgent steps will be taken in this regard”, added Mr Pachisia.