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Technological Status & Potential of Productivity Enhancement in Indian

Pulp & Paper Industry under Existing Liberalization & Globalisation

Scenario

PREAMBLE

In 2002 a study was made, on “Global Competitiveness of Indian Paper

Industry”. The objective of the study was to assess the competitive ability

and sustainability of Indian Paper Industry due to increasing competition

not only in global paper market also in domestic market context due to India’s

initiation into open market economy.

The study was a milestone in outlining a road map to frame out strategies &

policies for sustenance and growth of Indian paper industry as well as

becoming globally competitive

Over the last decade , since the submission of this report, the Indian Paper

Industry has gone through significant changes in technological and

environmental status including capacity expansion, adoption of modern fiber

line technologies, improved environmental management etc .However in

spite of significant improvement in Technological & Environmental status over

these years, the Indian Paper Industry is facing stiff challenges not only in

global but even in domestic market especially from countries like, China,

Indonesia, Thailand , Malaysia etc. The major challenges before the industry

include sustained raw material availability of uniform quality, quality and

availability & price of waste Paper, high cost of basic inputs, issues related

Government policy and regulations in accordance with open market economy,

Shortage of Trained & Qualified Manpower, Sustenance crisis of Agro Based

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Mills producing kraft paper (below 50 tpd) due to environmental non

compliance, Lack of indigenous technology/equipment development etc

In this scenario there is an urgent need to explore and evaluate the potential

of productivity enhancement in Indian Paper Industry in order to formulate the

strategies or action plan to address the above issues in order to be

globally competitive in existing liberalised & globalised scenario.

OBJECTIVE OF THE STUDY

To evaluate the technological status and explore potential of productivity

enhancement in Indian Paper Industry, prepare a road map or action plan for

implementation both by Industry as well as Government to improve the

industry’s overall sustainability and competitive ability in domestic and

international market.

A) DEMAND FORECAST FOR PAPER, NEWSPRINT,

PAPERBOARDS AND KRAFT PAPER IN INDIA UP TO THE YEAR

2030:

This forecast should take a stock of demand drivers such as a growth

in literacy rate, industrial growth, and increase in population; etc.

Correspondingly it should also consider effects of growth of electronic

media as well as substitution effects of alternative materials like

plastic , jute etc. This part- must also study the end user trend in

printing, writing, packaging and new segments and the shifts taking

place between them.

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The study has to focus on “end-use demand influentials like growth in

the:-

1) Printing and publishing industry;

2) Study of Central Government purchasing;

3) Demand of I.T. peripherals (printers), photocopier manufactures;

4) Growth in circulation of newspaper and magazines;

5) Growth in demand for packaging material; &

6) Paper substituting products ;

B) POTENTIAL EXPORT MARKET FOR NEWSPRINT , COATED

AND UNCOATED WOOD FREE DUPLEX BOARD , RECYCLED

LINER , FLUTING ETC:

Details of trends in exports of various products, forecast for future

export markets catered by Indian Paper Industry

C) RAW MATERIALS:

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Availability of cellulosic raw materials in the country viz-a-viz existing

Government policies with the clear cut recommendation for the

Government and Industry on the steps to be taken to ensure

sustained availability of cellulosic raw materials to meet the demand

growth in paper, paper products & newsprint. The study should look

into all categories of fibrous raw materials namely:-

Virgin fiber {Wood, Bamboo};

Agricultural residues {Bagasee, Cereal straw & Annual plants, etc.} &

Recycled fiber {Waste paper}; (Domestic recovery and needs for

further improvement in domestic recovery; Traditional waste paper

scenario; Future of imports of waste paper in India ;)

D) INDUSTRY STRUCTURE

Details of the scale of operation , installed and operating capacities ,

capacity utilization and their growth projections in various segments of

the Industry

E) COST POSITION OF THE INDUSTRY

Details of unit level cost of basic inputs and comparison with leading

paper manufacturing countries, analysis of main cost drivers and cost

structure of various products

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F) TECHNOLOGY STATUS OF INDIAN PAPER INDUSTRY VIS A VIS

GLOBAL TECHNOLOGY TRENDS

Segment wise technological status of Indian paper Industry along with

analysis of technology gaps with leading pulp and paper

manufacturers, recommended technologies for all segments of the

Industry along with cost benefit analysis

G) RESEARCH & DEVELOPMENT & HUMAN RESOURCE

DEVELOPMENT

Need for R&D , Current Status, Focussed Areas , Future Scope &

Prospects

Status of Human resource availability , prospects of training & human

resource management in the industry

H) COMPETITIVENESS

SWOT analysis of paper industry to assess its competitiveness in

context of:

1) Scale of Operation:

Integrated mills (wood, bamboo & bagasse based);

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Agro raw materials based mills (straw, bagasse & others);

Recycled fiber (wastepaper) based mills;

(Optimum scale of operation for each raw material)

2) Quality Benchmarks:

Quality bench mark with corresponding products from Asian countries

like Indonesia, China, Thailand and developed countries like Sweden,

Finland and USA for the different grades of paper like

a) Writing & Printing Grade of paper ( Wood based , Agro Based & RCF

Based)

b) Newsprint Grade of Paper (Wood based , Agro Based & RCF Based)

c) Unbleached Kraft Paper (Wood based , Agro Based & RCF Based)

d) Coated Paper

e) Coated duplex board; &

f) Test liner / KLB;

3) Cost of Production:

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a) Pulp stage (Virgin fiber – wood & agro ) for chemical & mechanical;

b) Recycled fiber-processing stage; &

c) Paper stage (both for virgin & recycled fiber furnish);

d) Cost analysis for each Component namely;

Raw material, Chemicals, Energy, Manpower, Fuel , Power , Interest,

Depreciation and Environment & other Socio-Economic costs.

Determine the disadvantage of Indian manufactures with respect of high

cost and shortage of fibre, cost of Government administered inputs,

infrastructural inadequacy, cost of finance, labour productivity, scale of

operations, etc.

Michel Porter‘s analysis of factors affecting competitive position of

Industry and its profitability

I) MANAGEMENT PRACTICES:

Marketing Management;

Quality Management;

Inventory Management;

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Financial Management;

Energy and Environment Management;

J) REVIEW OF GOVERNEMNT REGULATIONS & IMPACT :

1. Newsprint production scenario India and reasons for low production &

low quality and suggestion for improved new structure including cost

reduction

2. Impact of Import tariffs / duties / direct / indirect taxes etc and

suggestions

3. Depreciation of the Indian currency viz-a-viz the US Dollar and the

resultant cushioning effect.

4. Thrust on literacy.

5. Prevailing lassiez – affairs environment with respect to use of non-

biodegradable materials (lack of any homogenized Government

Policy).

6. Foreign Direct Investments In Pulp And Paper Industry:

7. Export Policy , Export Potential, Facilitation of Export

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8. Other demand stimulating mechanisms.

9. Exit Policies (LABOUR).

10. Forest Policy and

11. Environmental Policy.

K) PRINTING & PACKAGING INDUSTRY IN INDIA

Status and Opportunities;

Incentive required;

Potentiality for Indian printing& Packaging industry as outsource-

sing hub for international printing industry;

Structure of printing & packaging industry;

Quality of paper and printing;

R&D and HRD potential in printing & packaging industry