Shop
Create Bookmark
– At first glance, India and China appear to have a lot in common. The two countries resemble each other as regards population (1.2 billion against 1.33 billion) as well as economic growth which estimates put at 8-9% in the next five years. In its report on the Indian pulp market, London-based consulting company Hawkins Wright Ltd. asks whether the country will follow in China’s footsteps also in the exploding pulp and paper sector. In the context of limited fibre resources the question is whether international pulp producers can discover exciting opportunities in India as in China.
India currently consumes less than 10 million t of paper and board per year which works out to a per capita consumption of 8.3 kg and therefore seemingly offers large potential for growth. However, a closer look shows that the assumption is unfounded, says Hawkins Wright. Although many people have been able to improve their standard of living, a large part of the population still lives in poverty and can therefore not be viewed as potential consumers. An official study reportedly showed in 2007 that around 750 million people live in India on less than $0.43 per day. A similar number is reported for people who have no access to sanitary facilities. The urban middle class with disposable income is estimated at about 60 million people, which is roughly equivalent to the population of the UK, and consumes 10 million tpy of paper and board.
The economic structures of the two countries also differ markedly. China’s government intervenes to a great extent in the case of investments in certain sectors. In Addition, the export sector is well developed. Over a third of the paper and board that is apparently consumed in China is actually exported, some of it in converted form.
India’s industrial policy is viewed as more “relaxed”. It offers greater support to sectors such as software, bio-technology or “creative industrial areas”. As a large section of India’s workforce speaks English and is well-educated, the services sector is well developed and not the manufacturing sector as in China.
India’s annual output reportedly amounts to 8.9 million t of paper and board of which 250,000 t are exported. Woodfree printing and writing paper makes up the lion’s share, 90% of which is uncoated. Hawkins Wright explains that almost half the produced volume is of inferior quality. Consumption of sanitary paper is reportedly marginal due to cultural reasons. Annual output of tissue amounts to just 100,000 t.
Imports amount to 1.4 million tpy. India mainly imports newsprint which accounts for almost two thirds of all imported paper followed by packaging paper (15%) and coated printing and writing paper (12%).
India uses around 2 million t of lignin annually of which 400,000 t are imported, (300,000 t from Indonesia and 50-60,000 t from Latin America). The Indian pulp industry produces around 1.1 million tpy of mostly hardwood and bamboo pulp.
Pulp and paper capacities
on expansion course in India
India’s leading paper manufacturing companies are Ballarpur Industries (BILT), ITC and JK Paper who all have integrated pulp operations. BILT is the largest buyer of bleached hardwood sulphate pulp on the market but this could change in the near term as the company is expanding its pulp output, Hawkins Wright writes in its reports. The company is installing a second-hand pulp line at its Ballarpur mill in the state of Maharashtra. BILT is also investing in its facilities in Malaysia to increase pulp capacity by 100,000 tpy.
Indian companies are also increasing their capacity for paper production. JK Paper, West Coast Paper, ITC, Andhra Pradesh Paper, Tamil Nadu Paper and Whitefield Paper all plan to commission new paper machines before the end of the year. The capacity of the PMs rarely exceeds 200,000 tpy per machine. Most of these projects also involve integrated pulp lines.
Consequently, Hawkins Wright concludes in its report that the Indian pulp market will remain quite small; both, in terms of volume as well as the customer base.
31.08.2011
Markets
- German paper market still suffering from seasonal effects and inventory destocking
- Sharp increase in worldwide pulp stocks in July
- World market pulp statistics
- Inventories and consumption of pulp consumers in Europe
- Will India’s pulp market follow in China’s footsteps?
- Russian pulp and paper industry still hoping for strong investors
- Spain’s new waste legislation gives rise to debates in the recovered paper industry
- Expansion plans in the pulp sector will lead to substantial growth in hardwood pulp capacities
- Stagnation in Finnish paper production in first half-year
- Baypapier: energy policy is threat to paper industry
- More capacity increases reported again in Europe
Companies
- Ahlstrom considering job cuts at Karhula and Mikkeli mills
- Segezha Packaging mill in Saransk standing still after fire
- Italy’s paper industry calls for change
- Mayr-Melnhof establishes third packaging site in Turkey
- Kipas Holding to enter recycled containerboard market
- Hunsfos Fabrikker in financial dire straits
- Bong to cease envelope production in Belgium
- Tullis Russell to axe 43 jobs in Markinch
- ICT commissions a new tissue machine in France
- New Page to indefinitely close Port Hawkesbury mill
- Abitibi Bowater invests and cuts jobs at Iroquois Falls mill