The paper industry, estimated at R35,000 crore, gets its key raw material, wood pulp, through social forestry efforts with local communities. An estimated 5.2 lakh hectare is under social forestry projects, which supply wood pulp to key manufacturers, such as ITC, Orient, Ballarpur Industries and Star Paper.
With the decline in land availability and rising cost of importing wood pulp, the industry is looking to tie up with the forest department for taking up plantation on degraded land. Through partnerships with the forest department, people living around the degraded forest land would gain employment during the afforestation work, Madhukar Mishra, president, India Paper Manufacturers Associations (IPMA), told FE.
Mishra said through this model, the ownership of the land would remain with the forest department, while the companies would provide finance for raising eucalyptus trees used for making paper. The industry has asked the government to provide 10% of the existing 48 million hectare classified as wasteland for plantation purpose.
Even the United Nation's Food and Agriculture Organisation (FAO) has approved such a model of plantation. The way forward will be reclaiming the degraded land available in the country. It is all the more critical now to augment wood production since import of wood and wood pulp will increasingly become difficult for India since the wood exporting countries would wish to strengthen value-addition in their own countries, said Eduardo Rojas Briales, assistant director-general and head of forestry department, FAO.
In a paper submitted to the Planning Commission, the paper industry has stated that in the 12th plan, there will be an increase in demand for wood-based fibre. The constraints envisaged in increasing captive plantation will take some time to ease out. Therefore, the government may consider to waive or reduce customs duty on import of fibre (wood, logs, bamboo, wood, bamboo chips) till the time the proposed tie-up with the forest department starts taking shape, the industry stated in the paper.
The Indian paper industry has been growing around 7-8% annually. From 7.5 kg per capita consumption during 2007-08, the domestic consumption of paper has gone up to 10 kg during the last financial year. The global average per capita consumption of paper is around 50 a kg against 312 kg in the US. Even China has a per capital paper consumption of 42 per kg, while countries, such as Indonesia and Malaysia, have a per capita paper consumption of 22 kg and 25 kg, respectively.