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This document provides overview of the Indian paper industry and raw material
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Presented by
Dr. T. K. RoyDirector, CPPRI
Central Pulp & Paper Research InstituteSaharanpur, U.P., INDIA
Overview of Indian Paper Industry
1
PAPER INDUSTRY AT A GLANCE
Total number of Pulp & Paper Mills 666Wood Based 34Agro Based 165Recycled Fiber Based Mills 467
Pulp & Paper Mills in Operation 568Pulp & Paper Mills Closed 98Installed Capacity of Mills 6.9 million tonnesPer-capita consumption 6.0 kg
(Paper & Paperboard)Production 5.6 million tonnes – P&B
0.7 million tonnes - NewsprintTurnover Rs. 16000 CroresExchequer Rs. 2500 CroresEmployment Direct-3 Lacs / Indirect-10 Lacs
The industry is fragmented with capacities ranging from 2 to 800 tonnes per day
2
GROWTH OF PAPER INDUSTRY
In the 1970s excise concessions were given to small agro based mills, which resulted in a rapid increase of small mills and capacity.
In the late 1980s the industry was in a severe oversupply situation, capacity utilisation rates being around 60 %.
In early 1990s the government reversed the policy, making large units more competitive (e.g. by removing excise concessions for agro based mills).
First mill in the country was commissioned in 1812 in Serampur (W. Bengal).
The initial development & growth of industry in the 19th century was affected by shortage of wood (soft wood) in the country.
In 1914 the development of pulp making processes based on bamboo lead to rapid growth of the industry and by the end of the 1950’s installed capacity increased to 137000 tonnes.
3
GROWTH OF PAPER INDUSTRY ….. Contd…
Paper capacity and production in India 1950-2005
0.00
2.00
4.00
6.00
8.00
1950 1960 1970 1980 1990 2000 2005
Capacity
ProductionMillion tonnes
Nearly 1.25 million tones of capacity is closed
Technological obsolescence
Environmental issues
Reasons for Closed Capacities
5
Other varities
5%
Industrial paper 55%
Writing & printing grades 40%
Writing & printing grades Industrial paper Other varities
Total Paper and Paperboard demand in India
CAGR of nearly 5.5% in the past 3 years.
6
Year Production Imports Exports Consumption1995-96 3.81 0.42 0.09 4.141996-97 4.11 0.59 0.07 4.631997-98 4.58 0.65 0.06 5.171998-99 4.81 0.56 0.06 5.301999-00 5.5 0.55 0.10 6.12000-01 5.5 0.56 0.13 6.02
2001-02 5.57 0.56 0.29 5.98
2002-03 5.87 0.69 0.23 6.332003-04 6.24 1.01 0.23 7.02004-05 6.52 0.87 0.26 7.15
All figures in Million Tonnes
Paper, Paperboard & Newsprint
7
STRUCTURE OF PAPER INDUSTRY
34
165
467
0
100
200
300
400
500
Wood BasedMills
Non WoodBased Mills
RCF Based Mills
Categorization of the Mills Based on Cellulosic Raw Materials
Num
ber o
f Mill
s
8
PER CAPITA CONSUMPTIONThe per capita paper consumption in India is 6 kg compared to 324 kg in USA, 25 kg in Indonesia, 250 kg in Japan and 37 kg in China
050
100
150200250300350
PAKI
STAN
INDI
A
LATI
N AM
ERIC
A
EAST
ERN
EURO
PEIN
DONE
SIA
CHIN
A
WOR
LD(A
vera
ge
WES
TERN
EUR
OPE
JAPA
N
NORT
H AM
ERIC
A
Per Capita Consumption
Kg
9
FIBRE RESOURCESIndia is a fibre deficient country. Due to lack of wood resources, the paper industry is utilizing a wide verities of raw material for paper making ranging from forest based raw material to annual plant and recovered paper.
Forest based Agro based Recycled fiber
7%9%
84%
39%
31%
30%
34%
28%
38%
1970
2000
2005
10
TECHNOLOGICAL STATUSObsolescence of technology in most cases.
Lack of eco friendly state of the art processing technologies.
Uneconomic scale of operation.
In an international comparison, even the largest machines are medium-size
− The average capacity of paper machines is about 14000 t/a
− Most of Indian paper machines have a trim width from 1.5 to 3.5 m
− There are only 9 paper machines with trim width of 5 m or more
− Only 14 machines have capacities 50000 t/a or more
It is not possible to have very high speed paper machine, i.e. >1500 mpm for type of raw material available in India
Similarly for adoption of new papermaking technology quality of raw material and mill size are the major limitations.
Except the wood based integrated mills and few agro/RCF mills the level of automation and process control is very low in most of the mills
11
ENVIRONMENTAL COMPLIANCE - ISSUES
(CREP) for Paper Industry was introduced in the year 2003 by MoEF
(CREP) to be complied by entire industry between 2005 to 2008.
The major environmental issues :Control of color and AOX discharge
Control of release of Non Condensable Gases (NCG’s).
Disposal of Solid waste viz. Lime Sludge/Fly ash
12
Environmental issues Implementation Schedule (from April 2003)
Discharge of AOX kg/ tpaper AOX 1.5 kg/ tpaper within 2 years
AOX 1.0 kg/ tpaper in 5 years
Installation of Lime Kiln Within 4 years
Waste water discharge m3/ tpaper < 140 m3/ tpaper within 2 years
< 120 m3/ tpaper within 4 years for units installed before 1992
< 100 m3/ tpaper for units installed after 1992
Odor Control by burning the reduced sulfur emissions in the boiler / lime kiln
Installation of odor control system within 4 years
Utilization of treated effluent for irrigation Wherever possible
Color Removal from the effluent IPMA to take up project with CPPRI
CREP – LARGE MILLS
13
Environmental Issues Implementation Schedule (from April 2003)
Compliance of standard of BOD, COD & AOX
Either achieve the discharge Standards of BOD, COD & AOX by installation of chemical recovery system or utilization of black liquor with no discharge from pulp mill within 3 years or
shift to waste paper
Up-gradation of ETPs so as to meet discharge standards
Upgrade the ETP within one year so as to achieve the discharge standards
Waste water discharge/ tonne of paper < 150 m3/ tpaper within 3 years
Utilization of treated effluent for irrigation
Wherever possible
Color Removal from the effluent IPMA to take up project with CPPRI
CREP – SMALL MILLS
14
ISSUES BEFORE INDIAN PAPER INDUSTRY
Low scale of operation Inferior pulp & paper quality
High cost of transportation and power
Low capacity utilisation
High capital costs
High costs of raw materials
Issues & Challenges
Only 20% of the total used paper is recycled in India compared to a global recycling
average of 40%
State of art equipment & machineries
Emerging Environmental issues
16
Source - Financial Express,19 Feb 2006
6.24 5.75
0.49
8.33
6.79
1.54
11.1
8.01
3.09
14.85
9.46
5.39
0
2
4
6
8
10
12
14
16
Pape
r Mill
ion
Tonn
e
1
Year
Demand Supply Shortfall
2005 2010 2015 2020
Demand Growth @ 6%/annumSupply Growth @ 3.4%/annum
Pape
r Mill
ion
Tonn
e
Source – Jaakko Poyry Report 2002
Projected Demand, Supply and Short fall of Paper & Paperboard
4.9 4.5
0.4
6.76.1
0.6
9.18.5
0.6
12.2
10.9
1.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2005 2010 2015 2020
Demand Supply Shortfall
Year
Pape
r Mill
ion
Tonn
e
17
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00
Supply
Demand
Supply
Demand
Supply
Demand
Supply
Demand
2005
2010
2015
2020
Industrial Cultural Others
p p
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00
Supply
Demand
Supply
Demand
Supply
Demand
Supply
Demand
2005
2010
2015
2020
Industry Cultural Others
Source - Financial Express, 19 Feb 2006 Source – Jaakko Poyry Report 2002
Paper Million Tonnes
Paper Million Tonnes
Projected Demand & Supply of Various Grades of Paper & Paperboard
18
1.62
0.730.89
2.16
0.86
1.30
2.90
1.02
1.88
3.88
1.20
2.68
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
2005 2010 2015 2020
Demand Supply Shortfall
1.20
0.73
0.47
1.60
1.00
0.60
1.90
1.40
0.50
2.40
1.80
0.60
0.00
0.50
1.00
1.50
2.00
2.50
2005 2010 2015 2020
Demand Supply Short fall
Source - Financial Express, 19 Feb 2006
New
sprin
t Mill
ion
Tonn
es
Source – Jaakko Poyry Report 2002
New
sprin
t Mill
ion
Tonn
es
Projected Demand & Supply Shortfall of Newsprint
19
CELLULOSIC RAW MATERIALS - FUTURE TRENDS
2005
84%
2010
Recycled Fiber
Production – 6.5 Million Tonnes Demand Projected - 8.3 Million Tonnes
38%28%
34%
Agro based
40%28%
32%
Wood based
20
INDUSTRIAL WOOD DEMAND SCENARIO
0
2
4
6
8
10
12
14
2005 2010 2015
Million tonness of wood
Depends on agro/ waste paper use
The paper industry’s wood demand is expected to grow from 5.9 million tonness to 7.9 million tonness by 2010, and to over 10.6 million tonness by 2015.
~0.6 million hectares and 0.8 million hectares of land will be required by 2010 and 2020 respectively to meet paper industries wood demand.
5.9
7.9
10.6
21
AVAILABILITY OF AGRICULTURAL RESIDUES
Since 1970 agricultural residues have emerged as significant alternate raw material with total fiber use share being 29%.
The main agricultural residues utilized by the paper industry include bagasse, straws (wheat and rice) and grasses.
Availability of agricultural residues is good, but there are many limitations to their use
74
44
05
1015
202530354045
Agro Residue 2003 2010
Availability
Requirement by Paper Industry
Mill
ion
Ton
nes
22
RECYCLED FIBRE - RECOVERY & RECYCLING
Million tons
0
2
4
6
8
1995 2000 2003 2010
Recovery Imports Consumption
Import of waste paper is continuously increasing
At present more than 80% of consumption is met through imports.
24
0 20000 40000 60000 80000 100000 120000
Venezuela
Chile
Colambia
Argentina
South Africa
Australia
Thailand
Mexico
India
Taiwan
United Kingdom
Russia
Brazil
Indonesia
Sweeden
Korea
France
Finland
Germany
Canada
Japan
China
US
Paper & Board Capacity (2000)
‘000
tonn
es
India is among the top fifteen global producers
Source : ICRA report to IPMA : 2000
INDIAN PAPER INDUSTRY IN GLOBAL PERSPECTIVES
INDIA
PERCENTAGE OF WORLD PAPER PRODUCTION
World Paper & Board consumption is dominated by three major regional blocks-North America, Western Europe & Asia.
The Paper & Board production in India is nearly 5.5 million tons as against world paper production of 340 million tons.
India consumes nearly 5% of the Asian and 1.6% of the worlds consumption of paper and paper board.
North America, 31.0%
Rest, 9.0%Europe, 28.0%
India, 1.6%Asia, 30.4%
Indian Paper Industry in Global Perspectives… Contd…
26
CONSUMPTION OF BASIC INPUTS
Indian Paper Industry in Global Perspectives… Contd…
Input Norms(per tonne basis)
Mills in India (Wood Based)
Mills Abroad
Raw material, tonnes 2.0- 2.4 1.8-2.0
Energy, GJ 23-37 18-22
Water, m3 120-200 20-60
Chemical Recovery,% 85-95 95-98
Manpower, no. 14-20 5-7
Technical manpower, no. 2 4
Fibre Recovery, % 15 40
27
COMPETITIVENESS OF THE SECTOR
As compared to USA, Europe, the paper industry in India is far below the quality standards of the products.
It is not as competitive as in other Asian countries such as ; Japan, Indonesia, Thailand, Malaysia & China.
The paper industry in India is less competitive as compared to similar sectors such as; cement and capital goods.
The possible reasons which makes paper industry less competitive compared to other similar sectors are –
(i) Availability of good fibrous raw materials;
(ii) Level of technology.
28
Lack of required infrastructure such as; roads transports, railways, communications and sustained power supply.
Main reason for lack of availability of desired infrastructure is
Scattered location of paper mills.
Criteria for selection of site was raw material instead of infrastructure.
Ministry of Urban Development, Ministry of Transport, Ministry of Shipping & Ministry of Power can create the desired infrastructure.
INFRASTRUCTURE FACILITIES
29
The quality standards in other countries are maintained as per customer preferences
In India we still go by BIS norms which are much below the international standards.
General perception about the quality of products produced in India is poor.
As far as Printing papers and the Newspaper segment also by & large gives preference to the imported Newsprints.
The Indian paper industry uses 20 – 30% more raw materials; about 30% more energy, 200% more water & 10% more chemicals.
QUALITY STANDARDS
30
Raw Material Sourcing
Rational long term policy on Duties and Taxes
Technology Up-gradation Scheme
Policy for Industrial Plantation
Technology Up gradation & Restructuring
Product Focus
Implication of WTO
Capacity Expansion
Environmental Policy
Rational pricing policy for Power & water
IMPROVING
RETURN/MARGINS
INDUSTRY GOVERNMENT
STRATEGIES FOR IMPROVING COMPETITIVENESS
Environmental Credentials
31
Large Wood Based Mills
There are 22 mills producing 1.9 million tons of paper.
At 6% growth rate additional fiber requirement to meet projected demand is 2
million tons of wood.
Current plantations are not sufficient to cover the industry needs. Any shortfall
will have to be met through pulp imports.
Major Capacity Expansion – GreenfieldName of the Mills Capacity
t/dayCost (Rs. Crore)
A. P. Paper Mills 750 1800
J.K. Papers 180 235
West Coast Paper Mills Ltd. 300 230
ITC 600 2500
HPC 900 2800
Raw Material Requirement for Sustainability of the Industry
32
Agro Based Mills
Wheat straw & bagasse will be the mainstay raw material for the sector.
By 2010 , agro based fibre requirement to meet the demand would be 7.0
million tons.
Availability of surplus bagasse for paper industry is only 10 million tons and
difficult to be increased under present operational conditions of sugar mills.
Wheat straw availability is sufficient (22 million tons) therefore further
expansion should be expected to be based on wheat straw.
Raw Material Requirement for Sustainability of the Industry
33
Recycled Fibre
By 2010, the recycled fibre requirement to meet the demand will be 6 million tons.
If the present recovery rate is enhanced from 18% to 25% by 2010, availability from indigenous sources will be 1.5 million tons and 4.5 million tons will have to be met through imports.
Challenges before the Recycled Fiber Based mills
The availability of good quality waste paper at competitive price
There is a need to take immediate measure to organize the existing waste paper recovery system to increase the recovery rate from present 18% to 30% to be sustainable.
Raw Material Requirement for Sustainability of the Industry
34
Technology Improvements Needed
Wood Based Mills
Enhancement in productivity through adoption of advanced production techniques such as RDH/Super Batch.
New and efficient pulp washing systems should be adopted.
ECF bleaching with ClO2 followed by peroxide is recommended .
Enzyme bleaching should be adopted to reduce chemical cost and discharge of chloro organics.
Breast roll and blade gap formers improve paper quality and drainage and are important for Indian raw materials.
A good press section is important in India because fibers are short. Extended nip is the only good solution for Indian slow machines. One shoe nip press section would be the best technology.
35
Unsupported web run is normal in Indian dryer section when speedis higher than 600 meters/min, there should be single tier dryergroups to avoid web flutter and breaks.
Soft calendar are highly recommended and they could save bulk and improve opacity, strength and smoothness however this requires good CD profiles.
Films coaters and on-line calendars are recommended with good CD profiles.
Soft roll rewinders might be a low cost alternative to improve roll quality of this paper or coated papers.
Process automation level must be improved.
Technology Improvements Needed
36
Agro Based Mills
Technology improvement is needed for upgradation of quality of baggase and adoption of efficient washers for straws & bagasse.
Installation of chemical recovery to meet environmental compliance.
Recycled Fiber Based Mills
Inclusion of high density pulpers
For efficient contaminant removal, introduction of high density cleaners , turboseparators, fine slot screens and reverse cleaners in the fiber line.
Incorporation of modern deinking cells for production of deinked pulp
Screw press and dispersion system to reduce dirt and specks in DIP
Bleach towers for post bleaching of DIP
Improvements in paper machine area are same as in wood based mills.
Technology Improvements Needed
37
Requirements for Environmental Compliance
Installation of chemical recvcery or alternate option
Improved pulp washing
Oxidative bleaching
Reduced water consumption
Other waste management practices
Up-gradation of ETP & optimal use.
Wood Based MillsModified Technology for Pulping & Bleaching
Improved Pulp washing
Efficient use of water , reuse & recycling
Installation of odour control technology
Solid waste management & Disposal of hazardous waste
Up-gradation of ETP & optimal use
Agro Based Mills
38
Recycled Fibre Based MillsReduced water consumption through closure of water loops.
Waste management
Up-gradation of ETP & optimal use.
Requirements for Environmental Compliance
39
Newsprint Industry - Issues
Indian raw materials i.e. hardwood, reed, bagasse are not suitable for manufacturing TMP pulp.
Raw material and energy costs are high for CMP based newsprint mills.
Improvements neededMore use of domestic and imported ONP and OMG for deinking process to minimise cost of production.
Identify better raw materials like Eucalyptus globulus and E. grandis for producing chemi mechanical pulps.
There is a need to raise organised plantation of these species.
40
At present the MFN applied rates of Indian pulp & paper products fall with in the range of 0 to 15 percent. With 251 lines having 15 percent tariff (or import duties), 18 by 5 percent and 9 with noprotection at all.
If Swiss formula with value of coefficient being 15 gets accepted than all those tariff lines whose applied rate at present is 15 percent needs careful scrutiny.
Policy makers may need to insist that any negotiations on marketaccess are acceptable only on a pre-condition that all NTBs be removed under a fast track approach. This can be a powerful negotiating stand of India in the ongoing trade negotiations
Implication of WTO
41
ENVIRONMENTAL CREDENTIALS
European Union label is used in many products. In paper industry it is used e.g. in copy
papers. Criteria are related to pulp and paper industry’s emissions to water and air,
bleaching methods, energy consumption, etc. AOX level should be less than 0.3 kg/ton
of paper. Fibre raw material for paper should be waste paper or virgin fibre from
sustainable managed forests. Many European countries have additionally their own
eco-labels.
Similar concept could be developed for Indian conditions using overall environmental impact of the mill as criteria. The fibre base could be wood, waste paper or agro, as long as the paper is produced with an environmentally acceptable process.
43
Technology Up-gradation/ Modernization
Modernization RequiredWood Based Mills
By and large modernized through its own resources in order to meet CREP requirement, howeverthe paper machine section need major rebuild up-gradation.
Needs restructuring to 1000t/day capacity.
Agro Based MillsImmediate attention required for
pulp washing
paper machine
black liquor handling and effluent treatment.
Recycled Fibre Based MillsNeed to be modernized by introduction of
deinking cells
pulp cleaning
slots screening equipment
paper machine rebuilds.
45
GovernmentRevision of Forest Policy so that plantation can be increased.
Degraded forest lands should be identified by state govt. and be offered to indutry on long leases of plantations.
FDI in plantation programmes (with no change in land use)
Public –private partnerships
Allow duty free imports of waste paper
Encourage voluntary agreements to increase paper recovery
Equal subsidy be made available to paper industry at par with energy subsidy of bagasse
Funds for technology development
IndustryCooperation with farmers and State Forest Dept.
Search for foreign partners.
Public –private partnerships
Long term contract with printing/converting waste
Global sourcing, foreign partners
Sorting of imported mixed waste
Fibre fractionation to separate long fibres
Restructuring needed due to quality and environmental reasons
Develop pulping and papermaking technology based on non-wood fibre.
Wood
Raw Material
Recycled Fibre
Agro Fibres
ACTION PLAN….. Contd…
46
GovernmentAllow duty free imports of new and second hand machinery/equipment for technology upgradation.
Encourage cooperation & networking inside the forest cluster and other industries to make the sector more competitive.
R&D funding should be increased to 1% of turnover primarily through funding by industry.
Better availability and quality of coal.
More uniform energy policy by states
Uniform policy as regards to non-biodegradable materials.
Eco labeling scheme based on sustainable raw material base (wood/waste paper /agro) and environmental friendly processes.
IndustryBetter access to international financing
Seek for foreign partners
Focus on R&D to improve quality and to meet customers requirement.
More closure to international connections
Closure cooperation and interaction between CPPRI & Industry
Cogeneration in pulp & paper mills
Bigger mills and modernization to meet environmental standards.
Actively participate development of Eco label schemes so that industry’s can be taken into consideration.
ACTION PLAN….. Contd…
Research & Development
Environmental Policy
Energy policy
Finance