In a rapidly digitizing world, where screens have become the primary source for information, the paper industry that caters specifically to newsprint or writing and printing papers is slowly declining, says Pawan Agarwal, president of the Indian Paper Manufacturers Association (IPMA). But at the same time, the paper industry is also undergoing a remarkable transformation, adapting to the changing needs of the customers and embracing sustainability, he says.
According to Agarwal, the industry is getting many more opportunities to grow — the key drivers being the demand for better quality packaging of FMCG products, textiles, and pharmaceuticals, marketed through organized retail, booming e-commerce, rising healthcare spending, and increasing preference for ready-to-eat foods. “The demand for paper in India is growing at 6-7% per annum, making it one of the fastest-growing markets in the world,” he said.
Paper as a packaging material
According to an IPMA report, the packaging paper/paperboard segment has witnessed an annual growth of 9.08% in FY 2021-22.
The paper industry has the potential to provide environment-friendly solutions for single-use plastic, he says. “The Clean India mission is not possible without the paper industry. The government has been working with sincerity to ban litter and environmental issues caused by single-use plastics, and there is no other viable alternative than paper,” said Agarwal.
Technological advancements toward sustainability
Paper can be recycled up to 6-7 times, making it one of the most recycled products in the world. Paper as a sustainable end product also needs to be produced in a sustainable way and Indian paper companies are waking up to this reality. “Paper manufacturing technology has come of age. There are a lot of environment-friendly technologies available to the industry globally. Leading Indian paper mills have adopted and adapted some of these technologies such as environment-friendly bleaching processes, wastewater treatment, efficient boilers, and other processes. We are rapidly moving up the technology and sustainability curves, matching with the world’s best,” Agarwal said.
Adding to technological advancements in the paper industry, he said, “The industry has managed to bring down its energy consumption by about 20% in the last five years. Integrated paper mills in India generate over 40% of the power they use by utilizing biomass in the pulping process. Earlier the industry used to consume 200 cubic meters of water to produce a tonne of paper. Now, the integrated mills have reduced that to under 50 cubic meters. Today, several paper mills in India, especially in the organized sector, have got the best available global technology in the field of wastewater treatment.”
Concern over the import of paper
According to the latest data by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), Indian imports of paper and paperboard have jumped 47%, from Rs7,839 crore in FY 2021-22 to Rs11,513 crore in FY 2022-23. Imports from China have increased by 112% and from Asean countries by 97%.
According to Agarwal, the import of paper and paperboard into India significantly increased in the last three years, despite adequate domestic production capacity. While the domestic industry is grappling with the issue of producing paper and paperboard at competitive costs with the rising cost of raw material and energy, substantial quantities of paper and paperboard are imported into the country at significantly lower costs.
Agarwal said the government needs to intervene and inspect the quality of the papers imported into India. Taking advantage of the zero/low import duty rates in India, some countries find India an attractive outlet for diverting their excess inventory. “They are using India as their dumping ground, which is directly hurting the Indian paper industry and making it difficult for the small and medium paper mills to sustain.
Contribution of the paper industry
For the procurement of wood, the key raw material, the industry has worked incessantly with over five lakh marginal farmers over the last several years and has successfully brought 12 lakh hectares of largely degraded land under plantations. “As a mark of sustainability, the industry is wood-positive,” said Agarwal.
As one of the key sectors in the economy, Agarwal says the industry provides direct employment to more than half a million families and indirect employment to nearly 2 million families.