 and specialty paper (0.6 million tonnes).){kind=link}
India embraces 15th rank among paper manufacturing nations in the world. The sum of capacity is around 12.7 million tonnes. For each capital expenditure of paper is around 11 kgs alongside the global average of 56 kgs and the Asian average of 40 kgs. India’s share in globe paper manufacture is about 2.6%. The business is fragmented with over 750 paper mills, of which only 50 mills have a power of 50,000 TPA or more. As regards, 72% of the total installed capacity of paper production in India is accounted by West Bengal, Andhra Pradesh, Gujarat, Orissa, Karnataka, and Maharashtra. Uttar Pradesh, Tamil Nadu, Haryana, Kerala, Bihar, and Assam together account for about 26% of the total paper production in India. The manufacturing is working at 89 percent capacity utilization. The present demand is estimated at 13.1 million tonnes with domestic production of 11.4 million tonnes, export of 0.5 million tonnes and import of 2.2 million tonnes. The demand is projected to boost to 23.5 million tonnes by 2024- 25. India is the greatest growing market for paper in the world with a growth rate of about 6 percent yearly. The increase of per capita paper utilization by one kg will raise the demand by about 1.25 million tonnes per annum. generally, the industry is categorized into two main sections- Paper and Paperboard and Newsprints.In terms of demand subset, Indian paper industry market containing printing & writing paper newsprint industrial paper (5.1 million tonnes) and specialty paper (0.6 million tonnes). The packaging board market size is projected at 2.4 million tonnes, mounting 11.6 %. The paper industry in India has to turn into further promising as the domestic demand is on the rise. Escalating population and literacy rate, development in GDP, development in the manufacturing sector and lifestyle of individuals are probable to account for the development in the paper industry of India. The center of the paper industry is now shifting towards more eco-friendly goods and technology.
Paper manufacturing industry is revitalizing for consolidation
Indian paper industry could observe a round of consolidation and co-operation amid different players in the next few years to together leverage quick changing manufacturing technologies and smoothen diffident addition for raw materials. This is the conclusion could leave less than 10 big players in the domestic market as next to the present 28 major ones. The industry, that is extremely reliant on wood pulp for manufacturing of paper and paper-based products, is also attempting to broaden its raw material base to lower cost of invention. This also means that there is vast potential for the area, which can be met through the use of new technologies. To advance balance sheet In the previous five years, the Indian paper area has invested about Rs 20,000 crore on capacity enhancement, machinery upgrade, and acquisitions. Now, companies in the region are seeking to advance their balance sheets. The sector is improbable to observer any noteworthy capacity additions or announcements in FY17, as existing capacities have not been fully engrossed yet. While the sector is enthusiastic to enlarge capacity further, decisions in this regard will rely on how soon companies can develop their financials. The sector, which faced issue from rising input (wood) prices, is now enhanced placed due to a renewed thrust on agro-forestry and softening of flesh costs. Now with the beginning of some state-of-the-art pulp and paper machines will affect lower operating costs and superior quality.
Paper demand to Rising
In spite of the continual focus on digitization, India’s requirement for paper is anticipated to rise 53 percent in the next six years, principally due to a sustained boost in the number of school-going children in rustic areas. Growing consumerism, modern retailing, rising literacy and the growing use of documentation will continue demand for writing and printing paper buoyant. The exponential enlargement of e-commerce in the nation has opened up the latest horizon and could donate significantly to the demand where the paper is being lengthily used for packaging. Though India’s per capita utilization is quite low compared to global peers, things are looking up and a requirement is set to rise from the present 13 MT to an estimated 20 MT by 2020. This indicates there is a lot of headroom for development in India. From a demand point of view, each one kg incremental per capita utilization results in supplementary demand of more than one MT a year. Besides, strategy aspects also have a key position to play in the development of the domestic paper industry in India. The government’s continued focus on literacy, amplified consumerism, an increase in organized retail are predictable to positively affect paper consumption and demand in our country
Import pressures
Import pressures are likely to keep on in FY17 and would rely upon the extent of the depression of rival currencies, mainly Chinese Renminbi, Thai Baht in relation to the rupee. An improvement in import pressures could end result in continued costing pressures in coated paper and uncoated paper sections. Free trade agreements with ASEAN, Korea, and Japan also led to an increase in imports over FY14-FY15. Imports developed considerably in the uncoated segment in rupee value terms at 45.5 percent and 31.4 percent in FY14 and FY15, correspondingly, the report said. The coated segment has also continued to see around 15 percent growth in imports. Continuation of antidumping duties in the US market for Asian countries could also increase import pressures, which may delay price recovery in the domestic market. Cost pressures may collapse for paper sector industries in FY17 with a lessening of wood prices. Paper mills’ continuous efforts on farm forestry as well as higher wood prices have led to increased availability of wood in nearby areas, thereby reducing average wood procurement costs for mills.
Conclusion
The domestic paper sector is likely to see marginal improvement in demand in FY17 from education and corporate sectors, aided by expected higher GDP growth of the country. India Ratings and Research (Ind-Ra) expects major sector companies to report a marginal improvement in revenue growth in FY17 to 7-8% driven primarily by volume growth. This will be on the back of increasing demand from the education and corporate sectors, aided by higher GDP growth estimated at 7.4% in FY16. Import pressures are likely to continue in FY17 and would depend upon the extent of the devaluation of competing currencies, mainly Chinese Renminbi, Thai Baht in relation to the rupee. An increase in import pressures could result in continued pricing pressures in both coated paper and uncoated paper segments. Paper mills’ continuous efforts on farm forestry as well as higher wood prices have led to increased availability of wood in nearby areas, thereby reducing average wood procurement costs for mills. It is believed that high capacity utilization, strong demand outlook, moving into environmental friendly & value-added products and capacity expansion are key signs of the attractiveness of the industry over the medium to long-term.