INDIAN PAPER INDUSTRY

he Indian Paper Industry is a booming industry and is expected to grow in the

years to come.

he usage of paper cannot be ignored and this awareness is bound to bring

about changes in the paper industry for the better. It is a well known fact that
the use of plastic is being objected tothese days.

he reason being, there are few plastics which do not possess the property of
beingdegradable, as such, use of plastic is being discouraged. Excessive use
of non degradable plasticsupsets the ecological equilibrium.

he Indian Paper Industry accounts for about 1.6% of the worlds production of
paper and paperboard.

he estimated turnover of the industry is Rs 25,000 crore (USD 5.95

billion)approximately and its contribution to the exchequer is around Rs. 2918
crore (USD 0.69 billion).

he industry provides employment to more than 0.12 million people directly

and 0.34 million people indirectly.

Introduction

he Rs. 25,000-crore Indian paper industry accounts for about 1.6% of the
worlds paper and paperboard production even though the country accounts
for nearly 16% of the global population.

he Indian paper industrys market size has been estimated at Rs.321

billion,growing at a CAGR of 10.5% from around Rs. 195 billion in 2003-04 to
Rs. 321billion in 2008-09. In 2009-10, the country produced 9.18 million tons
of paper, growing at an average 6-7%compared with 2% growth in developed
countries

(Source: Assocham).

he paper industrygrowth is forecast at 8.4% annually, touching 11.5 million

tons in 2011-12and 15 million tons by2015

Source: Business Line, 7 May, 2010).

In India, paperboard accounts for nearly 47.3% of the total market size,
followed by writing and printing paper (29.6%), newsprint (19.5%) and
speciality paper (3.6%) according to CRISILResearch.India is among the
worlds fastest growing paper markets; an increase in consumption by one
kg per capita can potentially increase annual paper demand by a million tons.
Indias paper

Overview of Paper Industry

The Indian paper industry has been historically divided on a three

dimensional matrix identified by size, grades manufactured and raw material
utilized. Generally, tariff rates have protectedsmaller units utilizing
unconventional raw material. Over the years, the growth of
varioussegments, investments levels in specific segments, technological
changes, industry fragmentationand intensity of competition have been
significantly influenced by the Government tariff policy.The present Excise
duty on Paper is 12 %. The Government of India from time to time has
givensome benefits to small industries in order to protect them i.e. the first
3500 tons produced by amill is chargeable only @ 8 % and thereafter it is @
12 %.The three main grades of paper manufactured in India are:-1.
Newsprint2. Writing and printing.3. Industrial Variety (Craft paper and Duplex
Board)Over 550 players currently populate the industry and the estimated
capacity is about 7.00 millionMetric Tones Per Annum (MTPA). Fragmentation
is severe in the industrial (packaging)grades, which rely on
unconventional raw material such as waste paper and partly agroresidues.
This division generally comprises of units with an average size of about
10000 MTPAand contributes to 45% of the output of paper and paper boards
in the country. Although theother divisions in the Indian paper industry are
also fragmented by inte