One might say that the Indian paper industry is seeing renewed demand after 16 quarters of low growth and poor demand with the exception of packaging papers. The eight pandemic-ridden quarters from April 2020 to March 2022 saw little or no demand for publication papers including newsprint, while paperboard for cartons and liners for corrugated carton saw brisk requirements from consumer product companies and eCommerce. Some publication paper machines downshifted to liners, and in that burgeoning segment new projects for liner grades and corrugated cartons were initiated. The new machines for quality monocarton paperboard installed before the pandemic saw relatively good demand and gained market traction as more commercial printers added cartons to their product mix.
One of the presentations at the Paperex 2022 conference on 12 May 2022 from PK Visvanathan of Tamil Nadu Newsprint and Papers discussed the need for Indian businesses to take stock in order to succeed in VUCA environments. The first time one heard of VUCA (Volatile, uncertain, complex and ambiguous) was several years ago, at a Mumbai packaging conference. This was before the pandemic, and even then, the anxiety of businesses in India was fraught with an uncertain, volatile and ambiguous environment. The wait for a healthy business environment has been a perennial waiting for the proverbial ‘achhe din,’ with cooked up ease of doing business indices, to overcome the lack of infrastructural development and clarity in whimsical laws, regulations and compliances with orders given, diluted and withdrawn.
We took the opportunity of the Paperex conference to address some of the changing requirements for paper in the Indian market. Visvanathan’s presentation advising visionary requirements such as agility, market intelligence and the retraining of human resources and talent for operating in uncertain environments led us to ask him if he thought the current market intelligence pointed to the possibility of a change in TNPL’s product mix. We were pointing specifically to the supply chain breakdowns affecting the import of newsprint into India.
The UPM strike from January to May of this year, now settled, has given traders an opportunity to charge more for newsprint and publication papers in stock in their warehouses. While many book printers and newspapers purchased and stored paper stocks in the period of low demand during the pandemic lockdowns the current market indicates that demand will recover quickly. While European mills impose energy surcharges and the logistics are disrupted even for newsprint deals at prices as low as US$ 650 a ton, one assessment of newspaper industry experts is the need to manufacture more newsprint domestically and to improve its quality.
Visvanathan spoke of the operational measures that have transformed TNPL from a 90,000 ton paper mill started in the 1980’s to make newsprint from bagasse to a 600,000 ton behemoth that now manufactures 400,000 tons of board and 200,000 tons of paper. While the shift away from newsprint which was in the main imported at prices US$ 300 to US$ 750 a ton made it a unviable product for the majority of Indian mills the question is that with current price volatility in the US$ 1,000 range, is a change in product mix warranted by Indian mills?
While Visvanathan shared TNPL’s progress in creating a 6-acre biodiversity park, its high yielding in-house cloning facility and its access to 187,000 acres of land and efforts to help farmers reclaim degraded land for improving fibre sourcing, in a public forum he was unable to go further than to say, “If I am not able to produce newsprint in India, why should there be an anti-dumping duty on imports?” Adding that, “I should not oppose it,” he did say that domestic manufacture of improved newsprint requires a look at the viability.
Sudeep Bhattacharjee who was also a participant and a presenter at the conference also shared his experience that was broadly outlined by the earlier questioner that the quality of Indian newsprint needs to be enhanced with better strength and opacity, smoothness and strength to compete with imported mills. He added in his presentation that one way to save on wastage and costs of the valuable materail is automation.
The veteran papermaker RHK Sinha of Bindals Papers in the subsequent panel was quite articulate about the need and the possibility of making better newsprint domestically. Sinha pointed to the poor recovery of solid waste in the country which means that only 20% of waste paper reaches the mills for recycling. He also brought up the question of viability and volatility of newsprint prices, asking how long global constraints will keep prices high. As moderators of the panel we asked Atul Kumar Goel from the leading Hindi newspaper group Amar Ujala whether newspaper publishers would be willing to commit to purchase improved newsprint from Indian mills at enhanced prices and he responded by saying that this is a reasonable proposition.
This conversation between newspaper publishers and newsprint manufacturers is currently taking place across the country. It would seem that in this VUCA ennvironment that the Paperex conference brought on to the same panel both potential producers and buyers of the improved and more sustainable product mix that has to emerge from the paper industry. The opportunity for better solid waste collection and sorting at source and putting paper into the appropriate recycling stream and the manufacture of improved newsprint both seem like a priority for the public good.