With low per capita consumption of paper in the country, coupled with the government’s thrust on education, the domestic paper manufacturing industry is set for a giant leap in the times to come

Given that the current era is termed as the ‘knowledge era’, the demand for paper is set to scale strategic growth in the times to come. Although recessionary pressures led to sluggish growth in various sectors, paper has performed much better as compared to other sectors.

The demand for paper at the home turf has been growing at around 8% since the last couple of years, which is almost in line with the country’s GDP growth. With low per capita consumption of paper in India (approximately 7 kg) as compared to other nations, the long-term growth prospects for the industry look bright. The industry is expected to receive a further impetus with the government’s initiative to provide education to one and all (Sarva Siksha Abhiyan) as well as coming of multi-national companies and corporate offices.

Ajay Goenka, chairman and managing director, Rainbow Papers Limited

At present there are approximately 666 mills in India engaged in manufacturing paper and paper boards whose combined installed capacity is about 10.5 million tonnes (mt), thereby making India the 15^th largest paper manufacturer in the world.

In order to catch up with the growing demand for paper, the existing mills are required to undertake renovation and modernisation in order to optimise capacity utilisation. It is equally essential to expand capacity of the existing mills to meet the growing demand for paper. Keeping in mind environmental issues and depleting forest reserves, among others companies are slowly switching over to de-inking technology involving the use of ‘recycled fibre’ as raw material for the production of paper instead of  traditional ‘wood pulp’.

Domestic paper manufacturers need to incorporate latest technology to ensure cost competitiveness and enhance quality of their products. One needs to have the latest testing equipment, better quality fibres, pigments, chemicals etc to roll out superior quality paper.

Future prospects

The future outlook of the domestic paper industry remains bright. An annual growth of newsprint papers, printing grades and carton boards by 13%, 6% and 11%, respectively offers a competitive advantage to the Indian paper industry. It is anticipated that the industry will witness a CAGR growth of 7-8% over the next decade. This growth will be spurred by two major factors namely growth industrial output and increased spending on education.

Further the Indian print and packaging industry, which is one of the most developed in the world, is one of the biggest consumers of paper in the country. Low labour charges and establishment of several engineering institutes producing qualified personnel to run the machines will also propel the growth of the industry.

In order to remain globally competitive, the Indian paper industry will require a continuous supply of good quality raw material, both forest-based and recycled fibre which can be achieved through higher plantations and better fibre recovery. The industry also needs to upgrade its infrastructure in order to compete with its global counterparts.

To tread on growth path our paper industry needs to identify factors (both macro and micro economic), which will have a solid impact on the economy and help it to sustain growth over a long period of time.

Ajay Goenka, chairman and managing director, Rainbow Papers Limited, a mid-sized manufacturer of paper and paper products in Ahmedabad