The country’s paper industry needs investments of Rs 90,000 crore by 2030 for adding new capacities to meet growing demand, JK Paper MD Harsh Pati Singhania said today.
“India is the fastest growing paper market globally, growing at over 7 per cent and projected to grow at over 4 per cent per annum till 2030 to 27 million tonnes by 2030.
“The industry has made an investment of over Rs 20,000 crore in last 5 years and it needs investments of Rs 90,000 crore to add new capacities by 2030,” JK Paper Vice Chairman and Managing Director Harsh Pati Singhania told reporters on the sidelines of a conference on paper industry here.
The paper industry has huge potential to grow as the per capital consumption of India is only 11 kgs as compared to 26 kgs in Asia and 56 kgs globally.
The Rs 50,000 crore paper industry is providing employment to four lakh people directly and 15 lakh people indirectly, Singhania said.
Demand for better quality packaging of FMCG products marketed through organised retail, rising healthcare spends, over-the-counter medicines and increasing preference for ready-to-eat foods are the key demand drivers for paperboard.
‘Make in India’ will further boost demand for packaging, he said.
The market for writing and printing paper is expected to grow by about 6 per cent annually over the next five years. As a result, market for printing and writing paper will expand from the current 4.8 million tonnes in 2015-16 to about 5.8 million tonnes per year by 2018-19.
The demand for packaging board continues to grow at a rate of around 15 per cent per annum. The industry saw entry of two new players last year, with Emami having capacity of 150,000 MT and TNPL 200,000 MT. The overall industry, including paper and board, will surpass 20 MT by 2020 from the current size of 15 MT.
Singhania said prices of wood, which is the main raw material for paper industry, is higher in India compared to most other countries and emphasised on the need of favourable policies for plantations.
The current wood requirement of the Indian paper industry is 10 MT against availability of 9 MT. The scenario is likely to improve in next two-three years because of extensive plantations done by the industry by way of social farm forestry, Singhania said.
Commenting on JK Paper’s performance, Singhania said the company has increased capacity to 4.55 lakh tonne per annum after investment of Rs 2,000 crore.
The company recorded 15 per cent growth in gross revenue at Rs 3,000 crore in 2015-16 and hopes to continue the double digit growth.
For seeking raw material security, JK Paper is looking at investment in plantations in Myanmar. The company has already commenced a pilot plantation project in Myanmar and is looking at other neighbouring and African countries for plantation to secure raw material, Singhania added.