Indian paper industry which has been witnessing a steady growth because of rise in paper consumption, is also facing shortage of raw materials. Industry has urged the government to provide degraded land for plantation purpose for the industry. Harsh Pati Singhania, vice-chairman and managing director of JK Paper spoke to FE’s Sandip Das on range of issues impacting the industry.
Give us an overview on the paper industry and how is the demand scenario?
India at present is witnessing a 6-7% annual growth in the pulp and paper industry. The growth is witnessed in all segments of paper industry – writing, printing, coated and highend packaging papers. As the demand for paper and paper products grows, the industry will need to invest an estimated R90, 000 crore over next 15 years to meet the rising demand. In the past five years, the paper industry has made an investment of R20,000 crore to put up additional capacity.
The industry is facing challenges in terms of increase in wood prices, raw materials or demand of paper. What would be your views?
At present, the annual paper consumption is around 14.5 million tonne (MT), and the demand is expected to grow 26.5 MT by 2030. The industry requires 10 MT of wood annually and the supply at present is pegged at 9 MT. At present the paper industry does plantation on over 90,000 hectare annually. The scenario is likely to improve in next 2-3 years because of extensive social farm forestry plans by industry majors. Availability and prices of raw material are the biggest constraints to the growth of the Indian paper industry. Absence of industrial plantation policy has prevented creation of scientifically managed pulp wood plantations. Of the 29 million hectares of degraded forest land, the paper industry has urged the government to allow plantation on 2.5 million hectares for industrial use. This will also generate employment for tribal people and will give impetus to the local economy. We are amongst the pioneers to have started social farm forestry in 1990s. Since then this activity has covered a large ground.
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In spite of global decline in paper consumption, Indian paper industry is still witnessing growth?
The Indian paper industry has huge potential to grow. Its current per capita consumption is only 11 kg as against 26 kg in Asia and 56 kg globally. The R50,000 crore paper industry is providing employment to 4 lakh people directly and 15 lakh people indirectly. With our young population and government focus on education we believe there is tremendous scope for paper to grow in the future.
One of the other key factors driving the growth is the rapid modernisation and urbanisation in India. People are increasingly getting used to fancy packaged items including food, and with plastic not a viable option, need for paper based packaging is growing. E-commerce is picking up and every delivery carries an invoice, which naturally is in paper and also the packaging box which is also paper.
With the world going digital or paperless, what would be its impact on the paper
There is a notion or myth that we will become paperless soon. In fact, with digitisation and e-commerce, the demand for paper is poised to grow further. In a recent survey of 3500 students in USA, more than 90% students felt that concentration and retention is better while reading text on paper. We are living in an era of transition where it might seem that the significance of paper is on decline, but this is very far from the truth. We are certain that paper is going to coexist with the digital platforms, both supplementing and complimenting each other.