Chapter-III

GROWTH AND DEVELOPMENT OF PAPER

INDUSTRY IN INDIA
If man may now be considered as having reached a high state of
civilization, his gradual development is more directly due to the
inventions of paper and printing than to all other factors.
Dard Hunter
The previous chapter highlighted the concept of performance appraisal. It has
specifically dealt with the types, importance and limitations of financial statements
analysis. It also pointed out the relevance of performance appraisal for other
industries in general and paper industry in particular. In the following chapter, an
attempt has been made to analyze the trends in the growth and development of paper
industry in India.

INTRODUCTION
The word paper is derived from the Latin word from the name of the reedy
plant papyrus and French papier (Kulshrestra: 1988). It is a web composed of
vegetables fibres, roughly oriented and matted together to form sheets. Paper is made
of raw material of the manufacture of paper is cellulose fibre, which is obtained from
trees, recovered paper and annual vegetable fibres like cereal straws, kaolin, starch
and other products are used as auxiliary materials in the paper production process.
Paper can be defined as a sheet or continuous web of material formed by the
deposition of vegetable, mineral, animal or synthetic fibres or mixtures with or
without the addition of other substances into liquid vapors, or gas in such a way that
the fibres are intermeshed together (Kulshrestra: 1988). Paper is a material made of
cellulose pulp, derived mainly from wood, rags and certain grasses, processed into
flexible sheets or rolls by deposit from an aqueous suspension and used chiefly for
writing,

printing

and

drawing,
[100]

wrapping

and

covering

walls

(http://www.thefreedictionary.com/). It is a thin material used for writing upon,

printing upon or packaging, produced by the amalgamation of fibers, typically
vegetable fibers composed of cellulose, which are subsequently held together by
hydrogen bonding. While the fibers used are usually natural in origin, a wide variety
of synthetic fibres, such as polypropylene and polyethylene, may be incorporated into
paper as a way of imparting desirable physical properties. The most common source
of these kinds of fibres is wood pulp from pulpwood trees vegetable fibre materials
such as cotton, hemp, linen, and rice are also used

(http://stationery.

indiabizclub.com/).
Paper is more than an industrial product. It is the cultural barometer of the
nation. We need paper every day for widening the frontier of our knowledge. The new
millennium is going to be the millennium of the knowledge. Paper is one of the
significant discoveries that turned the history of the world around. Pulp and paper
constitute one of the most important segments of Indias industrial economy and is
treated as a basic sector. Paper pervades all sectors of our activity from book to bullets
and from morning newspaper to nuclear technology. From the time immemorial,
paper has played a key role in the evolution of our civilization. The importance of
paper and paper product in the modern life is so obvious that no other manufactured
product processes such diversity of use. It is a basic medium of communication and
dissemination of information. It helps all the human beings for the growth of
education, reading, writing, storing, knowledge, quality of life, culture, and other
sectors of the economy. Kids to kings, all human being, are using paper either directly
or indirectly. It is very difficult to imagine modern life without paper
(Reddy.et.al:2003).

HISTORY OF PAPER
Paper has a long history, beginning with the ancient Egyptian and continuing
to the present day. For thousand of year, hand-made methods dominated and then,
during the 19th century, paper production became industrialized.
3000 BC
[101]

Of all the writing and drawing materials that people have employed down the
ages, paper is the most widely used around the world. Its name derived from papyrus
the material used by the ancient Egyptian, Greeks and Romans. Papyrus, however, is
only one of the predecessors of paper that together are known by the generic term
tapa and are mostly made from the inner bark of paper mulberry, fig and Daphne.
Recent archaeological excavations in china have revealed some of the oldest tapa
paper ever found which shows that paper was being produced in china before western
records began.
AD 105
In AD 105, the Chinese court official, Tsai Lun, (if we are to believe the
chronicle recording the claim) invented papermaking from textile waste using rags.
This can be considered as the birth of paper.
AD 610
Chinese papermaking techniques reached Korea at an early date and were
introduced to Japan in the year 610. In these two countries, paper is still made by hand
on a large scale in the old tradition, preferably from the fresh bast fibres of the
mulberry tree (kozo in Japanese).
Very soon, knowledge of papermaking spread to Central Asia and Tibet and
then on to India. When the Arabs, in the course of their eastern expansion, neared
Samarkand they too became acquainted with the production of paper and paper mills
were subsequently set up in Baghdad, Damascus and Cairo, and later in morocco,
Spain and Sicily.
14th Century
In the course of the rapid expansion of trade in the late middle ages, more and
more merchants dealt in the commodity called paper that was growing in importance
for public and intellectual life. The Nuremberg councilor Ulmann Stromer (Stromeir)
mulled over the advantages of making his own paper and, with the help of skilled
workers from Italy, transformed the Gleismuhle by the gates of his home town into a
paper mill. The dates noted in his diary, 24 June 1390 (start of work on the
waterwheel) and 7 and 11 august 1390 (oaths sworn by his Nuremberg foremen), are
the first assured records of papermaking on German soil.
[102]

16th Century
The advantages of this mill-based papermaking technique, which spread
throughout Europe in the 15th and 16th centuries: far outweighed the disadvantages of
considerable outlays of time and capital for building and fitting out with new
machinery and equipment.
17th Century
Technical progress continued in the 17th century. Smoothing the sheet by
hand, using a creasing knife or blood stone was supplemented by the use of a
smoothing hammer (similar to a forging hammer). Towards the end of the 17th
century, a new and much more efficient beater, called a Hollander, was invented.
This supplemented, or even replaced the stamping mill and further divided
papermakers into two new camps.
18th Century
During the 18th century there had been some concentration of craft activities in
large operations, the manufactories, which were dependent on skilled papermakers
organized into craft groups. The initial model was the vat that was used by J.N.L.
Robert, who built the first flat-screen papermaking machine in 1798. This was further
developed in England, mostly by Donking and the Fourdrinier brothers.
19th and 20th Century
The history of the paper industry in the 19th and 20th centuries can be broken
down into following five partly overlapping periods, each marked by definite trends:
In the first stage (from about 1800 to 1860), all work sequences previously
performed by hand were mechanized.
During the second stage (about 1840 to 1880), efforts were made to obtain rag
substitutes on an industrial scale (ground wood pulp and chemical pulp) and
appropriate industrial plants (ground wood and chemical pulp mills) were developed.
The third stage (1860 to 1950) was marked by the enlargement of the web
width, an increase in working speeds, the introduction of electric drive and further
improvements to various machine parts.
[103]

The fourth stage (1950 to 1980), which was still dependent on the old methods
as far as the mechanics were concerned, brought unprecedented changes in
papermaking.
The fifth stage leads into the future. The evolution of new sheet-forming
principles (with fluid boundaries between paper and non-woven fabrics) and chemical
pulp processes have been the main process improvements.
During the 20th Century machines were designed specifically for the
production of particular paper and boards. New materials and chemicals were
introduced into the process and automation occurred. New sheet forming principles
and chemical pulp processes also evolved (http://www.paperlinx.com/).
21st Century & Beyond
Paper is an amazing product: it is renewable, clean and incredibly versatile. It
continuously offers new possibilities, applications and end-uses.
Paper can be impregnated, enameled, creped, waterproofed, waxed, glazed,
sensitized, bent, folded, twisted, crumpled, cut, torn, dissolved, molded and
embossed.

Who

knows

to

what

uses

it

will

be

put

in

the

future?

(http://www.paperonline.org/).

GLOBAL PAPER INDUSTRY

The global paper and paperboard industry is dominated by North America,
Europe and Asia. Global paper and paperboard production stood at around 380
million tons in 2008, the US leading with over 100 million tons and accounting for
nearly a third of the worlds production. It is expected to increase to 392 million
tonnes by 2010 and 490.0 million tonnes by 2020.With a large number of paper
production capacities shutting down in North America and growing capacity creation
in Asia (especially China), the latter accounts for over a third of global paper
production, while Europe and North America account for about 30 per cent and 25 per
cent respectively. Interestingly, even as per capita paper consumption in the US is 300
kg, it is 35 kg in Asia, implying excellent growth prospects. The global pulp and

[104]

paper industry consists of about 5000 industrial pulp and paper mills, and an equal
number of very small companies.
The global paper consumption in F.Y. 2000 was approximately 325 mn
tonnes. Writing and Printing segment accounted for 32 per cent of the global paper
consumption while Packaging, Tissue and Sanitary and Newsprint accounted for 50
per cent, 6 per cent and 12 per cent respectively.
The US is the largest market for paper product and commands high per capita
consumption. Asias main markets are China, Japan, India, Malaysia, Singapore and
Thailand. In 2005, Japan had the highest per capita consumption (247 kg), followed
by Singapore (228 kg), Malaysia (106 kg), Taiwan (51 kg) China (42 kg), Indonesia
(22 kg) and Philippines (16 kg). Indias per capita consumption is estimated to be as
low as 7.0 kg in 2006.
Chart 3.1 Showing the Paper and Paperboard Production in Global Market

[105]

Chart 3.2 Showing the Consumption per Capital of 2005 and 2006

Source: CEPI; RISI; European recover paper council; ICEM World Paper Conference
(November 2005); Research India Analysis
Paper demand is unevenly distributed as 72 per cent of the worlds paper is
consumed by 22 per cent of the worlds population in the US, Europe and Japan.
The world demand for the material is expected to grow by around 3 per cent annually,
reaching an estimated 490 million tons by 2020, with significant growth coming out
of Asia and Eastern Europe. Asia dominates the demand for paper and paperboard;
consumption increased at a CAGR of 7 per cent across 2003-08. China is now the
worlds second-largest household paper consuming nation (http://industrytracker.
wordpress.com/).
The global paper demand has turned very sluggish. The excess supplies
globally are being dumped into various countries, including India. This dumping of
paper is affecting the Indian paper sector, which is in the midst of massive capacity
additions. The annual global paper and paperboard production was approximately
382.0 million tonnes in 2006. It is expected to increase to 392.0 million tonnes by
2010 and 490.0 million tonnes by 2020.

[106]

PRESENT STATUS OF PAPER INDUSTRY IN INDIA

The paper industry in India is one of the most thriving industries in the
country. The Indian paper industry accounts for about 1.6 per cent of the worlds
production of paper and paperboard. Indian paper industry is the 15th largest in the
world and provides employment to 1.3mn people in country contributing Rs25bn to
the government.
The first paper mill was set up in India more than 100 years ago. In India, the
first paper industry was developed in Kashmir, established by Sultan Zainul Abidin
(Shahi Khan) of Kashmir in 1417-67AD. (http://www.infinityfoundation.com). Paper
was observed in common use almost all over India at the close of Akbars reign. The
improved qualities of handmade paper were produced in the latter half of the
eighteenth century. William Carey started a paper mill in 1812 at Serampore, West
Bengal. Indian government had given preferential treatment to the indigenous paper
production in 1880 to encourage and establishment of paper mills. Over the years,
paper industry had been transformed into one of the major and key industries of the
country.
The growth in paper is inevitable and is likely to contribute significantly to the
governments target of achieving an overall growth of 12 per cent in manufacturing.
Unfortunately, the rising costs of raw materials, primarily wood and wood products,
are a big challenge facing the industry (http://www.indiaenews.com/). The industry
has recorded a volume growth of CAGR of 5.47 per cent over the last 3 years. In
2003-2004, it recorded a volume growth of 6 per cent in line with the GDP growth.
The Indian paper industry is accorded core sector status since paper is
categorized as an essential commodity by the government. The progress of paper
industry is inextricably linked to the national priorities and with the changing times,
its fortunes fluctuate. Indian paper industry has a 1:1 correlation with the economy.
With the expected GDP growth of 6.9 per cent for F.Y 2005 and 7-8 per cent for F.Y
2006 as per RBI, the paper sector is expected to record a similar growth rate.
Indian economy has experienced healthy GDP growth during recent years and
the perspectives are positive for the future also. The paper industry has a crucial role
to play for economic growth of the country as paper consumption is considered as one
[107]

of most important indices of educational and cultural growth of a nation. The industry
growth, pegged now at 7-8 annually (http://www.capitalmarket.com). The paper
industry can broadly be classified into following:
Paper and paperboard (writing, printing, packaging and tissue). The writing
and printing paper market can be further divided into coated and uncoated segments.
Newsprint mainly uses for newspapers, flyers, and other printed material
intended for mass distribution.
Fig 3.1

Paper and Paperboard

Printing and Writing

Newsprint

Packaging

Tissue and Sanitary

The Rs. 25,000-crore Indian paper industry accounts for about 1.6 per cent of
the worlds paper and paperboard production even though the country accounts for
nearly 16 per cent of the global population. The Indian paper industrys market size
has been estimated at Rs.321 billion, growing at a CAGR of 10.5 per cent from
around Rs. 195 billion in 2003-04 to Rs. 321 billion in 2008-09. In 2009-10, the
country produced 9.18 million tons of paper, growing at an average 6-7 per cent
compared with 2 per cent growth in developed countries. The paper industry growth is
forecast at 8.4 per cent annually, touching 11.5 million tons in 2011-12 and 15 million
tons by 2015. In India, paperboard accounts for nearly 47.3 per cent of the total
market size, followed by writing and printing paper (29.6 per cent), newsprint (19.5
per cent) and specialty paper (3.6 per cent) according to CRISIL Research
(http://industrytracker.wordpress.com/).
The growth of machine made paper industry can be divided into two phases
such as: Pre Planning Period and Post Planning Period.

[108]

PRE PLANNING PERIOD

Indias production of paper at the beginning of the twentieth country was
estimated at 19,000 tonnes. In 1911, the production was at 27,200 tonnes. Their
production levels reached to 40,000 tonnes in 1931 and to 1,10,100 tonnes by 1945.
The Second World War (1939-1945) provided adequate impetus for the stabilization
and expansion of paper industry in India. All types of paper and paperboard were
made during this period. The post-war economic boom coupled with cessation of
imports, made indigenous production rise considerably and the industry attracted
sizeable investment. But the production of paper generally remained stagnant until
1950 as is evident from Table- 3.1

Table (3.1) : Production of Paper in India (1911-1950)

Year

Production
(000 tonnes)

Growth Rate (per cent)

Over previous year

1911

27.20

1921

24.70

-0.091

1931

40.00

0.619

1941

95.00

1.375

1945

110.10

0.022

1950

109.3

0.030

Source: Paper Industries in India: Report and directory, 1980

POST PLANNING PERIOD

The planned development in paper industry in India began only in post
independence period. The growth however slowed down in sixties owing to the
escalation of cost and scarcity of forest based raw material.
The Indian paper industry made significant strides in post independent period.
Organized growth of paper industry commenced only in the planning era from 1951

[109]

onwards. With the setting of new mills and modernization of and expansion of
existing mills, under the various Five Year plans, the paper industry has showed an
impressive development. The targets and achievements, under various Five Year
Plan/Annual plans, are given in the Table-3.2 (Reddy: 2003). The following table
shows the Plan Wise Capacity and Production of Paper Industry in India:
Table (3.2)

: Capacity and Production

(First Plan to Eleventh Plan)

of

Paper

Industry

in

India

(mn MT)
Plan Periods

Year

Capacity
Target

Production

Actual Achievement Target

Quotient
(per cent)

Actual Achievement
Quotient
(per cent)

First Plan

1951-56

0.21

0.21

100

0.2

0.19

93.6

Second Plan

1956-61

0.46

0.43

94.1

0.36

0.35

98.3

Third Plan

1961-66

0.83

0.67

80.3

0.71

0.56

78.5

Annual Plan

1966-69

0.75

0.73

97.3

0.64

0.66

103.6

Fourth Plan

1969-74

0.99

0.85

0.83

97.1

Fifth Plan

1974-79

1.3

1.14

87.5

1.05

0.9

85.7

Sixth Plan

1980-85

2.05

2.4

117.1

1.5

1.36

90.7

Seventh Plan

1985-90

2.7

3.04*

112.6*

1.8

2.43*

135

Eighth Plan

1992-97

3.85

4.2

109.1

3.2

2.8

87.5

Ninth Plan

1997-02

4.9

5.1

104.1

4.2

3.7

88.1

Tenth Plan

2002-07

Eleventh Plan

2002-03

5.1

3.4

2003-04

5.1

5.6

2004-05

7.4

5.9

2005-06

7.6

5.9

2006-07

7.8

6.1

7.8

6.3*

2007-12
2007-08

7.5

Note: *: Anticipated
Source: Centre for Industrial & Economic Research (CIER).

[110]

TRENDS IN PRODUCTION OF PAPER IN INDIA

The growth of the Indian paper industry for last decade is indicated in graph
3.3 the data indicates that in the beginning of the millennium the production growth
rate shows a downward trend. This is however more a case of capacity constraints
from 2004-06, where after the industry announced many capacity expansions and up
gradations. Due to recession there is a sharp fall in the year 2007-2008. This bottle
neck is likely to ease out in the coming time as about 58 projects worth Rs. 20,907
crores are outstanding in the sector. Even in the face of recession, as many as 29
projects with an outlay of Rs. 6,724 crore are under implementation (Mathur: 2009).
Graph 3.3
Production Growth Rate of the Paper and Paper Board Sector

Year-wise Capacity and Production of Paper Industry in India (1980 to 2008-09)

The capacity and production of paper has tremendously increased over a
period of time in India. Data set out in the following table 3.3 shows the Year Wise
Capacity and Production of Paper Industry in India from 1980 to 2008-2009:
[111]

Table (3.3) : Capacity and Production of Paper Industry in India (1980, 1985
to 2008-2009)
(Lakh or 0.1 mn MT)
Year

Installed
capacity

Production

Capacity Utilization
per cent

1980

15.4

10.6

68.8

1985

23.5

14.3

60.6

1986

26.5

15.5

58.6

1987

27.6

16.5

59.8

1988

28.5

17.2

60.9

1989

30.1

18.2

60.3

1990

30.4

19.6

64.5

1991

32.8

19.6

59.8

1992

34.2

21.3

62.3

1993

35.5

22

62

1994

37.9

22.2

58.6

1995

36.7

35.4

96.5

1996-97

41

39.1

95.4

1997-98

43

43

100

1998-99

44.5

44.5

100

1999-00

51

51

100

2000-01

51

48.4

94.9

2001-02

51

49.5

97.1

2002-03

55

52.4

95.3

2003-04

51

55.6

109

2004-05

72

57.9

80.4

2005-06

76.0

59

77.6

2006-07

78.0

62.5

80.1

2007-08

78.0

62.9

80.6

2008-09 (Prov.)

89.0

53.9

60.6

Source: Centre for Industrial & Economic Research (CIER). (652)

[112]

Chart 3.4 Showing the Production of Paper and Paperboard in India from 2000
to 2009

Trends in Per Capita Consumption of Paper in India

Indias per capita consumption of paper and paper products is around 8 kg as
against the world average of 56 kg. The Indian per capita consumption of paper is 7
kg, in comparison to the Asian average of 21 kg, World average of 55 kg and US
average of 331.7 kg. So the Indian pulp and paper industry has got a tremendous
growth potential estimated at about 8 per cent per year. Indias per capita paper
consumption grew 10.6 per cent in 2009-10 (from 8.3 kg in 2008-09 to 9.18 kg)
compared with 45 kg in China and 350 kg in developed countries, implying a large
scope for correction. Of the total consumption, Printing and Writing paper accounts
for about 35%, Newsprint 20% and Industrial and Speciality Papers 45%. In the
following chart 3.5 capacity variety wise paper is shown:

[113]

Chart 3.5

As paper consumption is linked to economic development, India has emerged

as one of the worlds fastest growing paper markets. Per capita consumption increased
from 8.3 kg during 2008-09 to 9.18 kg in 2009-10, a growth of 10.6 per cent even
though this is low compared with Japans 250 kg, Koreas 170 kg, Chinas 45 kg,
world average per capita consumption of 56 kg and Asian average of 46 kg. The
following table shows the Per Capita Consumption of Paper in India from 2000-2001
to 2010-2011:
Table 3.4 : Per Capita Consumption of Paper in India
Year

Consumption (in Kgs)

2000-2001

4.44

2001-2002

4.44

2002-2003

4.38

2003-2004

4.8

2004-2005

4.6

2005-2006

6.0

2006-2007

7.0

2007-2008

8.3

2008-2009

9.18

2009-2010 Exp.

9.4

2010-2011 Exp.

10.0

Source : Compiled from Various Reports

[114]

Chart 3.6 Showing the Per Capita Consumption of Paper in India

Chart 3.7 Showing the per capita consumption of various countries

h
ttp://www.pcra.org/english/latest/book/11-chapter-11.pdf

[115]

Chart 3.8 Showing the Expected Production and Consumption of Paper and
Paperboard in India in the year 2009-2010, 2014-2015 and 2019-2020

Source: CII; IPMA; Bilt; Research India analysis

India is self-sufficient in manufacture of most varieties of paper and
paperboards. Import is mainly related to certain specialty papers such as light weight
coated variety of paper, cheque paper, etc. Due to the scarcity of raw material, the
companies also need to rely on imported wood pulp and waste paper. It is well known
fact that the volumes of import and exports of paper in India are small. The Graph 3.9
indicates that imports of paper and paper boards in to India are increasing steadily in
the past few years. The rate of exports growth on the other hand has shown a steady
downturn. The industry needs to monitor this situation closely so that the balanced of
trade is maintained in the interest of the industry.

[116]

Graph 3.9
Balance of Trade for the Paper and Paper Board Sector

Indian pulp and paper industry is experiencing the positive impact of a robust
GDP growth. Paper consumption is set to double from the current 7 million tonnes per
annum in the next eight years, according to Indian Paper Manufacturers Association
(IPMA). Increasing demand for paper brings with it new challenges of economies of
scale, efficient usage of resources, need to develop and expand sustainable use of
fibre, and vale chain management. During the period 2002-2007 newsprint registered
a growth of 13 per cent, writing & printing, containerboard, carton board and other
registered growth of 5 per cent, 11 per cent, 9 per cent, 1 per cent respectively. At the
national level, India generates the highest return on capital employed in the global
paper and forest products industry. India is the fastest growing market for paper
globally and it presents an exciting scenario; paper consumption is poised for a big

[117]

leap forward in sync with the economic growth and is estimated to touch 13.95
million tons by 2015-2016 (http://www.capitalmarket.com).
The futuristic view is that growth in paper consumption would be in multiples
of GDP and hence an increase in consumption by 1 kg per capita would lead to an
increase in demand of I million tonnes. As per industry estimates, paper production
are likely to grow at a CAGR of 8.4 per cent while paper consumption will grow at a
CAGR of 9 per cent till 2012-13. The import of pulp and paper products is likely to
show a growing trend.
In 2006, there were around 77 mills listed in Schedule to the Newsprint
Control Order, 2004 as mills manufacturing newsprint paper of which 2 in Central
Public Sector, 2 in State Public Sector and 73 in Private Sector. The production of
newsprint has increased at a CAGR of 12.5 per cent over the last 5 years. The
production of newsprint in 2006-07 (April-August 2006) was 420,000 tonnes.
According to the International Newspaper Marketing Association (INMA) estimates
that approximately more than 360.0 million literate people in India are still not
reading newspaper. Thus, increase in the number of newspaper reader would also
increase the demand for newsprint. The demand for newsprint in the country is met
partly from indigenous production and partly by import. Free imports and low
customs duty have made newsprint market competitive. There is no price or
quantitative controls. Various policy measures have been taken to improve production
and availability of newsprint.
The data noted in the Table (3.5) shows the Installed Capacity, Consumption,
Production, Import and Export of Newsprint in India (1983-1984, 1988-1989 to 20082009).

[118]

Table (3.5) : Installed Capacity, Consumption, Production, Import and Export

of Newsprint in India (1983-1984, 1988-1989 to 2008-2009)
(In Lakh Tonne)
Year

Installed Consumption Production

Capacity

Imports

Exports

Import
Ratio
(per cent) #

1983-84

3.70

1.76

1.94

52.00

1988-89

5.70

3.20

2.50

44.00

1989-90

5.60

3.10

2.50

45.00

1990-91

5.10

2.80

2.28

45.00

1991-92

5.60

3.20

2.50

45.00

1992-93

5.40

3.00

2.00

37.00

1993-94

5.60

3.61

1.50

27.00

1994-95

7.00

4.02

2.98

43.00

1995-96

7.50

4.10

3.40

45.00

1996-97

7.68

8.50

3.00

5.47

64.00

1997-98

7.83

9.00

4.00

4.98

55.00

1998-99

9.70

9.50

5.25

4.27

47.00

1999-00

10.61

5.04

4.39

2000-01

10.83

6.34

4.44

2001-02

12.04

6.20

4.44

2002-03

12.25

6.27

5.20

2003-04

6.8

7.5

0.03

2004-05

7.6

6.7

0.05

2005-06

9.13

6.85

0.11

2006-07

10.32

7.92

0.05

2007-08

10.39

8.94

0.04

2008-09

9.4*

NA

NA

Note: #: Import to Consumption Ratio.

*: Up Till Jan. 09 NA: Not Available
Source: Ministry of Commerce & Industry, Govt. of India. (10584)
[119]

TRENDS IN AVAILABILITY OF NEWSPRINT IN INDIA

Alike paper the availability of news print has also gone up in India over a
period. The data exhibited in the following Table (3.6) shows the availability of
Newsprint in India:
Table (3.6) : Availability of Newsprint in India (1983-1984 and 1988-1989 to
2007-2008)
(Lakha Metric Tonne)
Year

Production

Import

Consumption

Import Ratio *
(per cent)

1983-1984

1.76

1.94

3.7

52

1988-1989

3.2

2.5

5.7

44

1989-1990

3.1

2.5

5.6

45

1990-1991

2.8

2.28

5.1

45

1991-1992

3.2

2.5

5.6

45

1992-1993

3.0

2.0

5.4

37

1993-1994

3.61

1.5

5.6

27

1994-1995

4.02

2.98

7.0

43

1995-1996

4.1

3.40

7.5

45

1996-1997

3.0

5.47

8.5

64

1997-1998

4.0

4.98

9.0

55

1998-1999

5.2

4.2

9.5

44

1999-2000

4.5

4.0

8.5

47

2000-2001

6.3

4.4

10.7

41.1

2001-2002

6.5

4.0

10.5

38.1

2002-2003

6.3

5.2

11.5

45

2003-2004

6.9

7.5

14.4

52

2004-2005

7.6

6.7

14.3

47

2005-2006

9.1

6.8

15.9

43

2006-2007

10.3

7.9

18.2

43

2007-2008(b)

10.4

8.9

19.3

46

Note: *: Import to consumption ratio.

a: lakh 105 or 0.1 mn.
b: Annualized.
Source: Centre for Industrial & Economic Research (CIER). (652)

[120]

Chart 3.10 Shows the Newsprint Production in India from

2000-2001 to 2008-2009

Chart 3.11 Shows the Import and Export of Newsprint in India

from 2000-2001 to 2008 to 2009

[121]

Graph 3.12 Shows the Production and Growth Rate of Newsprint Sector
From 2000-2001 To 2007-2008

GROWTH DRIVERS
Growth drivers play an important role in the appraisal of any industry.
Keeping in mind the significance of growth drivers, in the following pages, an attempt
has been made to study the major growth drivers of paper industry:
Economic Growth
The Indian economy is expected to grow at 8.5% in 2010-11 and 9% in 201112. With the fundamental strengths and strong advances in private consumption and
investment in next two years, the economy growth is projected at 10% in 2011-12.
Moving forward, India's GDP is set to quadruple over the next ten years and the
country is likely to be a USD 4 trillion economy by 2020. According to the Economist
[122]

Intelligence Unit (EIU), the research arm of London-based Economist magazine,

India is expected to overtake China to become the world's fastest growing economy
by 2018.
Increasing Literacy and Government Thrust on Education
The literacy rate in the country has increased from 18.33% in 1951 to 65.38
per cent in 2001. Thus, in five decades, the literacy percentage had grown by 47.05%
or by an average of 9.41% per decade. The implementation of the Right of Children to
Free and Compulsory Education Act, 2009, which assures free school facilities from
Class I to VIII for children between 6 and 14, translates into a huge demand potential
for the paper industry. The estimated numbers are bound to be huge as the law will
bring on school rolls over one crore students who do not go to school now. Going by
the thumb rule that each student uses about 10 kg of paper a year, enrolment of over
one crore students will mean an additional demand for about one lakh tonnes of paper.
The academic segment demand is growing by about 10% annually as the
student population and paper usage increase. The Governements existing Sarva
Shiksha Abhiyan programme for education for all seeking compulsory education
would contribute significantly to increasing the per capita consumption of paper.
The Government has increased the budget allocation for school education by
16% from Rs. 26,800 crore in 2009-10 to Rs. 31,036 crore in 2010-11. Further, the
additional fund allocation to states amounting to Rs.3,675 crore for elementary
education under the Thirteenth Finance Commission grants for 2010-11 will provide
more fillip to the demand of printing and writing paper.
Urbanization, Changing Demographics
Urbanization is an inevitable part of a countrys economic evolution. Indian cities
are home to an estimated 340 million people, or 30% of the population. It is estimated
that Indias population will reach 1.47 billion with around 40% urbanization. That
means close to 590 million will be living in cities which are nearly twice the
population of the USA today. This will be the fastest addition to the urban population
of any country in history outside China, according to a study by the McKinsey Global
Institute (MGI). Unlike other countries grappling with aging population and rising
dependency ratios, India has a young and rapidly growing population. It is estimated
that nearly 180 million new job seekers will enter Indias work force over the next
two decades.
[123]

Increasing Consumerism
The MGI report estimates that India's middle class is expected to increase by
more than ten times from its current size of 50 million to 583 million people by 2025.
And over 23 million Indians (more than the present population of Australia today) are
expected to be counted as billionaires. By 2025, it is forecasted that India will become
the 5th largest consumer market, surpassing Germany. Higher urbanization and
consumerism have been the key drivers for the structural changes in India. The
increasing disposable incomes and lifestyle changes have changed the consumer
outlook and preferences providing a growth thrust to the economy. Further, it is
estimated that the gross domestic savings in India would grow by 3.8 times from
Rs.19 trillion in 2009 to Rs.72 trillion by the end of the next decade. This increased
savings could lead to a huge surge in domestic consumption expenditure which is set
to triple from Rs. 30 trillion in 2009 to Rs.113 trillion in 2020. Thus, Indias large and
growing domestic market with increasing purchasing power and consumerism, are
strong growth drivers for the paper industry.
Service Sector Thrust
As the economy develops on the back of growth in real sectors like
manufacturing, industrial production, agriculture, etc., it is supported by ancillary
services like banking and insurance from the financial services sector. Other critical
services which are expected to grow along with the forward march of the economy are
education, healthcare, recreation and IT services.
The growth in the service sector propels demand for office supplies. To
provide an illustration: It is estimated that for every candidate an IT company recruits,
paper manufacturers sell over five reams, about 2,500 sheets, of copier paper directly
related to the recruitment process in the form of letters, instructions and training
manuals. Backed by demand from the service sectors, the copier paper market is
expected to grow at 14% over the next few years.
Printing Industry
The fast growing printing industry and increasing focus towards niche sector
magazines are the other factors driving growth for paper industry. With a readership
base of over 250 million readers, India is the second largest print market in the world.
Long term prospects for growth remain favourable as there is a population of
[124]

approximately 359 million who are literate but do not currently read any publication
in India. Revenues from newspaper publishing are expected to grow at CAGR of
9.1% over the next 5 years and are projected to reach Rs. 245.4 billion by 2013. The
magazine publishing segment is expected to grow at a CAGR of 8.1% over the next 5
years and is projected to reach Rs. 20.5 billion by 2013. The low cost base of Indian
printing industry is attracting many outsourcing projects from the foreign publishers
and hence it is expected to grow at a CAGR of 15% over the next few years thereby
fuelling further growth in the paper industry (Annual Report of WCPM: 2010).
Map 3.1: Showing Location of Pulp and Paper Industry

[125]

Chart 3.13 Projected Demand and Supply of Paper and Paperboard and
Newsprint from 2005 to 2020.

Source: CPPRI; Research India Analysis

[126]

PRESENT POSITION OF PAPER MILLS IN INDIA

The number of paper mills has also increased in India. There were 515 paper
mills in India in 2000 which now went up 656 units, engaged in the manufacture of
paper and paperboard. Capacity utilization of the industry is just 79 per cent, due to
old technology. Moreover, 194 mills under the purview of the Board of Industrial and
Financial Reconstruction (BIFR) and nearly 60 mills with a capacity of 1.3 million
tones have been closed. Based on the raw material utilized, the paper units can be
classified into three broad categories as:

Wood Based (Bamboo, Hardwood Etc.)

Agro-Based (Bagasse, Jute, Rice and Wheat Straw)

Waste Paper Based

Due to increasing regulation and raw material prices, the companies are

increasing using more non-wood based raw material over the years. Round about 70
per cent of the total production is based on non-wood raw material, in 2006. The
following Table (3.7) shows the Category-Wise Mills in India:

Table (3.7): Category-Wise Paper Mills in India (Figures in number)

Category
Small

Medium
Large

Capacity Range

Number of units

Capacity (TPA)

Up to 10000

299

12,90,382

<2000

69

75,522

20005000

107

2,96,980

500010000

123

9,17,880

1000020000

116

16,69,460

>20000

70

38,93,048

[127]

INSTALLED CAPACITY OF PULP AND PAPER INDUSTRY

IN INDIA
The installed capacity of pulp and paper industry in India has shown alarming
results. The following Table (3.8) shows the Installed Capacity of Pulp and Paper
Industry in India from 1980 to 2008-2009:
Table (3.8) : Installed Capacity of Pulp and Paper Industry in India (1980,
1981, 1986 to 1995 and 1995-1996 to 2008-2009)
Year

No. of
Mills

Installed Capacity
(' 000 Metric
Tonne)

Average Capacity
(Metric Tonne)

Index 1980=100
No.

Capacity

1980

121

1538

13000

100

100

1981

138

1656

12000

114

108

1986

271

2655

9000

224

173

1987

288

2760

9000

238

179

1988

297

2867

10000

245

186

1989

305

3014

10000

252

196

1990

311

3049

9803

257

198

1991

327

3284

10000

270

213

1992

334

3418

10234

276

222

1993

340

3551

10444

281

231

1994

350

3670

10486

289

239

1995

350

3670

10486

289

239

1995-96

380

4100

10789

314

267

1996-97

380

4200

11053

314

274

1997-98

380

4350

11447

314

283

1998-99

380

4550

11794

314

296

1999-00

380

4900

12895

314

324

2000-01

380

5100

13421

314

332

2001-02

380

5100

13421

314

332

2002-03

385

5500

14286

318

358

2003-04

380

5100

13421

305

332

2004-05

515

7400

14369

426

481

2005-06

568

7600

13380

469

494

2006-07

600

7800

13000

469

507

2007-08

600

7800

13000

496

507

2008-09E

666

8900

13363

550

579

Table: Abbr.: E: Estimates

Source: Centre for Industrial & Economic Research (CIER). (652)
[128]

Chart 3.14 Shows the Raw Material Wise Paper Mills in India
Raw Material-Wise Paper Mills in India
(Figures in number)

Source: DIPP; water and agro industry; Mysore Mills estimates; Research India
analysis

GOVERNMENT POLICY
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 protected smaller units utilizing unconventional raw material. Over
the years, the growth of various segments, investments levels in specific segments,
technological changes, industry fragmentation and intensify of competition have been
significantly influenced by the government tariff policy (http://www.docstoc.com).
The role of the government is crucial in the Indian paper industry as it plays the role
of regulation, supplier (the wood supplying forests are owned by the government) and
buyer (government is the single largest buyer of paper). The domination of small
paper mills was high in India till nineties. But now these have faded into the oblivion,
as

they

did

not

have

advantages

of

economies

of

scale

(http://www.researchandmarkets.com). The government had completely delicenced

the paper industry from July 17, 1997; foreign participation is permissible. Most of
the paper mills are in existence for a long time and hence present technologies fall in a
wide spectrum ranging from oldest to the most modern. The entrepreneurs are now
required to file an Industrial Entrepreneur Memorandum with the Secretariat for
Industrial Assistance for setting up a new paper mill or substantial expansion of the
[129]

existing mill in permissible locations. The paper industry is a priority sector for
foreign collaboration and foreign equity participation up to 100 per cent receives
automatic approval by Reserve bank of India. Several fiscal incentives have also been
provided to the paper industry, particularly to those mills which are based on non
conventional raw material (http://www.economywatch.com).
There is an excellent budget for the paper industry, as the excise cut would
give the sector the necessary boost. The cut in excise duty from 12 per cent to 8 per
cent will give a big relief to paper industry who were struggling to increase their
margin.
Excise duty has been fully exempted on paper and paper products,
manufactured from non-conventional raw materials, up to clearance of 3500 metric
tonnes in a year from a unit. However, this benefit is available only if the unit does
not have an attached wood/bamboo pulping unit. They will also be levied only 8 per
cent excise duty for production in excess of 3500 metric tonnes in a year
(http://www.capitalmarket.com/).
The government has maintained the effective rate of duty on paper, paper
board and articles at 4 percent while raising the duty for certain stationery products
like folders, letter pads and file covers to 8 percent. Notebooks and exercise books
have also been exempted. Apparently, the move will have no impact whatsoever on
paper consumption (http://www.ipma.co.in/).
Central Excise:
Central Excise is levied @8 per cent for the first 3500 MT production and
thereafter @12 per cent on the value of the invoice. The company is availing
permitted MODVAT benefits as per Central Excise regulation. For import duty paid
on waste paper procured from overseas the company is entitled to adjust the entire
duty paid component as that of MODVAT credits.
VAT (value added tax):
VAT replaces the existing multipoint taxes levied by various states with effect
from April 05. As that of other industries, the paper trade is also covered under VAT
for domestic sales done in the state of Kerala. However for interstate sales CST is
continued to be levied as per existing Government regulations.
[130]

Service Tax:
Being classified as a manufacturing industry, the industry even for Job Work
on conversion basis will not be subjected to Service Tax requirements. A recent
notification from Central Government also confirms such a stand.
Factory Licenses:
All the licenses required under Municipality Act, Factories Act are obtained
and duly renewed.
Pollution Control:
Necessary permission under effluent discharge Act is obtained and the
facilities required to maintain the permission are in place (http://www.docstoc.com/).
Since the government has already cut down the excise duty by 600 basis
points (in December 2008 by 400 basis points and in February 2009 by 200 basis
points), no future cut is expected in excise duty. Future stress on primary education,
rural education and more allotment of money for the various education schemes is
expected.
Union Budget 2011-2012 (March 01, 2011)
Indirect Taxes The budget proposals have a largely neutral impact on the
paper industry.
Excise Duty:
The excise duty on paper and paperboard has been increased from 4 per cent
to 5 per cent.
(Notification No 2/2011 - Central Excise Dated 1st March, 2011)
Customs Duty:
The basic custom duty on paper and paper board has been retained at 10 per
cent. The custom duty on wood pulp has also been retained at 5 per cent. However the
custom duty on waste paper has been reduced from 5 per cent to 2.5 per cent.

[131]

Union Budget 2010-2011(March 01, 2010): Indirect Taxes

The Union Budget 2010-11 was tabled on February 26, 2010 in the
Parliament. No significant budget proposals have been made impacting the paper
industry.
Excise Duty:
The excise duty on paper and paperboard has been retained at 4 per cent.
However excise duty @ 10 per cent is imposed on some of the paper products viz
baby and clinical diapers and sanitary napkins which were fully exempt hitherto.
Also, excise duty on cartoon, boxes and cases of corrugated paper and paperboard
manufactured by standalone manufacturers is reduced from 8 to 4 percent.
(Notification No 10/2010 - Central Excise Dated 27th February, 2010)
Customs Duty:
The basic custom duty on import of paper and paperboard is retained as 10 per
cent as before.
Exemption from 4 per cent additional duty of customs (Special CVD) is
provided on import of waste paper and paper scrap affected by the traders. However,
there is no change in its tariff structure in case of import by the Actual Users.
(Notification No.24/2010 Customs dated 27th February, 2010)
(Feb 24, 2010) High Court admits IPMAs petition on safeguard duty
The decision of the Directorate of Safeguards, Department of Revenue,
Ministry of Finance, and Government of India to not recommend safeguard duty on
paper and paper board imports has come as a rude shock to the industry which is
reeling under the impact of unbridled imports for a while now.
A writ petition with a prayer to quash/set aside the impugned notification
dated 13th November 2009 issued by Directorate of Safeguards to not impose
safeguard duty on imports of coated paper & board has been admitted by a division
bench of the Delhi High Court.

[132]

The court has issued notices to the government of India and the Director
General of Safeguards (DGS) directing them to reply to the petition. The court has
listed the matter for hearing of May 11, 2010 (http://www.ipma.co.in/ ).

PAPER POLLUTION
Pulp and paper mills generate varieties of pollutants depending upon type of
the pulping process being used. The production, use and recycling of paper has a
number of adverse effects on the environment which are known collectively as paper
pollution. Pulp mills contribute air, water and land pollution. Discarded paper is a
major component of many land-fill sites, accounting for about 35 per cent by weight
of municipal solid waste (before recycling). Even recycling paper can be a source of
pollution due to the sludge produced during deinking.

PROBLEMS FACED BY PAPER INDUSTRY IN INDIA

The sharp rise of prices during 1973-74 created a paper crisis in the country.
Since then, the paper industry was engulfed in a crisis due to a variety of reasons,
leading to a sub-optimal use of installed capacity (Datt: 2002).The financial
performance of paper mills has been highly unsatisfactory despite numerous facilities
and fiscal concessions being provided to them. To understand the broad implications,
it is necessary to know the problems being confronted by the industry (Reddy: 2003).
Fig. 3.2

[133]

Raw Materials
The problem of getting adequate supplies of cellulosic raw materials on a
regular basis at a reasonable cost is the main problem in our paper industry. At present
about 64 per cent of paper production is based on non conventional raw materials
such as agro residues and recycled fiber and only 36 per cent paper production comes
from good quality of cellulosic raw material i.e. forest resource. Sustained availability
of low cost and good quality of cellulosic raw material is one of the major factors
inhibiting the growth of paper industry. Amongst the cellulosic raw materials,
bagasse, straw and waste paper have inherent drawbacks of limited and scattered
availability of suitable technology for conversion into higher grade pulp.
Obsolete Technology
Most of the paper mills operating in India are very old and are using outdated
technology including plant and machinery. Whatever plant and machinery is
manufacture in India, it is available at a high cost. Even the available supplies are not
in a position to meet the entire machinery needs of the industry. Except a few mills,
most of the paper mills in India operate on technologies which are more than 30 years
old compared to average mill in Europe.
Finance
In order to make the size of operations international competitive, investments
are becoming very high. The industry will have to take recourse to international funds
and overseas joint venture partnership.
High Cost of Basic Inputs
The growth of paper industry is largely affected by inadequate availability of
energy i.e., coal and power. Steep hike in the cost of basic inputs viz. chemicals and
raw materials is posing serious threat to the very existence of paper mills.
Poor Profitability
Poor profitability is one of the problems of paper industry. Under capacity
utilization, higher costs of production, industrial dispute and financial management
are some of the reasons for poor profitability.
[134]

Environmental Issues
The production, use and recycling of paper has a number of adverse effects on
the environment which are known collectively as paper pollution. The Indian industry
recognizes that it is a polluter. The paper industry releases chlorinated compounds,
dioxins and furans, wastewater are known to carry high levels of BOD, COD and
suspended solids. On the atmospheric side, the industry faces the daunting task of
tackling the emission of non-condensable gases. The problem of solid waste disposal
is also a major concern to the industry in the face of local environmental pressures.
Under Utilization of Capacity
Capacity utilization rate has been declined over the years. This is due to the
availability of inadequate raw material, finance, lack of skilled manpower.
Research and Development
Till 1980, there was no organization involved in the research and development
in paper industry. Research and development status in the paper industry is still in its
infancy and the only organization equipped to undertake industry oriented applied
research on modem lines is the Central Pulp and Paper Research Institute (CPPRI),
established in 1980. There is lot of ground to be covered in research and pulp wood
plantation development if the paper industry is to develop along the right lines and
meet the challenges of future.
Lack of Skilled Manpower
The total manpower cost per tonne of product is quite high. Manpower cost in
paper industry in India varies from 8 percent to 16 percent of the total production cost.
The industry has also the difficulty of obtaining floor-level technicians with technical
background. More than 80 percent of the employments are in production departments,
research and development accounting for only one percent of the total task force. One
of the main reasons for very low capacity utilization is the acute shortage of skilled
manpower (Reddy: 2003).
Competition in Global Market
Quality products at competitive price are necessary for effective global
competition. The Indian paper mills are facing quality problems due to lack of good
quality cellulosic raw materials available in the country.
[135]

Sickness
From the very beginning, the small units have suffered from various
constraints. They did not have chemical recovery plants, nor did they provide for
disposal of effluents. They had installed second hand machinery imported from
elsewhere and they made use of unconventional raw materials. As a result, the small
paper units found it difficult to operate efficiently, to maintain quality of paper or
produce at a low cost (Datt: 2002).
Other Problems
Some other problems faced by paper industry in our country are:

Poor infrastructure,

To many administrative hurdles,

Tedious bureaucratic methods,

Poor productivity,

Poor instrumentation,

Lack of commitment to innovation,

Poor recycling of waste paper,

Regional barriers,

Decolourization and detoxification air pollution problem,

Recovery of chemicals from agro based black liqueur,

Political interference and

Competition from global competitors

SWOT Analysis of Indian Paper Industry

Competitive strengths:

Large and growing domestic paper market.

Relatively low personnel and fuel costs.

Well developed printing industry.

[136]

Competitive Weakness:

Fibre shortage.

Small and fragmented industry structure.

Environmental problems of most of the small pulp mills and also some big
mills.

Impact of high local taxes (sales tax, entry tax etc.)

Competitive Opportunities:

Enormous domestic market potential.

WTO: foreign participation/ FDI would speed up restructuring.

Low labor cost.

Competitive Threats:

Unprepared mills for international competition.

Decline in capacity.

Short term planning for raw material (http://reviewessays.com/).

SUGGESTED REMEDIES:
To overcome the problems faced by the paper industry, the following
suggestions will go a long way and the worst will be over permanently:
Raw Material
In order to overcome the problem of inadequacy of raw materials, industry has
to go for plantation programmes for self-sufficiency in raw material. It would be in
the long term interest of the country to encourage units based on unconventional raw
materials and to help bigger paper mills to switch over gradually to unconventional
raw materials. Government should encourage growth of large-scale plantations of
eucalyptus plants particularly in south India which has suitable soil for the plantation
of eucalyptus.

[137]

Jaakko Poyry Consulting Company study recommended that small percentage

(about 5 per cent) of degraded lands should be converted as production forest by
having corporate involvement in the plantations. Degraded forest lands should be
identified by state governments and offered to industry on long leases for plantations
(Mathur: 2009).
Technology Upgradation
The industry should be helped to optimize capacity utilization through
renovation and modernization of existing large mills. Modernization programme is
possible with the proper evaluation of projects and proper planning.
Infrastructure
Improvement of communication e.g. rail, road, port which will help the entire
industrial sector.
Royalties and Leases
Government should reduce the present rates of royalties for the leases of the
forestland. Policy should be stable and based on long-term basis.
Research and Development
To meet the challenges of future, the paper industry should set up more
research and development institute.
Finance
Paper industry should adopt effective control of operating costs for the
improvement of financial health. Adoption of profit planning and control techniques
such as marginal costing, cost-volume-profit analysis, standard costing, activity based
costing system may enable the mills to push down the operating costs and boost up
the profits. Product mix is the other way of improving profitability of the mills. For
instance, mills instead of selling paper, as it is, they may convert them into paper
product like notebooks so that marketability will be more effective (Reddy: 2003).

[138]

Utilization of Capacity
Industry must utilize the capacity up to maximum level. For meeting the future
demand the industry have to create an additional capacity through the expansion of
existing mills and setting up of new mills.
Global Competitors
Now-a-days the strategy for companies is go global or go home. So, to
compete globally in terms of quality and cost, it is imperative to produce products of
uniform quality and maintain consistency in quality to reduce rejections.
Government Policies
Social forestry scheme should be introduced to small and marginal farmers to
promote sapling and knowhow for raising plantations of fast growing trees with an
assurance of a buy back at a remunerative price. Right now, an estimated 55 million
bagasse is available, but currently industry uses only 8 per cent. Bagasse can be
introduced in replace of using bamboo, rice or white straw. There should be more
uniform cost effective power policy for paper production units/mills
Environment
The old method to treat environment issues is no longer effective; therefore,
overall strategy needs to be adopted to select proper process and equipment, and
maximum segregation of effluents which should be treated selectively.
Paper industries in India certainly flourish in future, if it is able to solve the
problems in front of it. At present the paper industry is at cross roads with the above
mentioned problems. Therefore, the industry has to take all the above mentioned
problems as challenges and try to overcome the problems and bring back the industry
into profitable position.

[139]

CONCLUSION
The foregoing discussion traced that the Indian paper industry is a booming
industry and is expected to grow in the years to come. The 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 to these days.
The reason being, there are few plastics which do not possess the property of being
degradable, as such, use of plastic is being discouraged. Excessive use of non
degradable plastics upsets the ecological equilibrium (http://www.economywatch.
com/). Indian paper and newsprint industry has a huge potentials and prospects in
coming future. In our, country, demand for paper and newsprint is rapidly increasing.
The wood and paper industry is probably the only large-scale industrial system which
is genuinely capable of satisfying future requirements with respect to sustainable
development.
The globalization of Indian economy has lead to a healthy growth of 6 to 7 per
cent industry and that is growth happening in all the sectors. Moreover the per capita
consumption of paper in India is going up. Due to environmental concerns, the use of
plastics is likely to be banned by the government of India within a short span of time.
Hence within 2 to 3 years industry will be witnessing an explosive growth of
packaging in India mainly in food, textile and export segments.
To face future challenges, the Indian Paper Industry has been focusing on
repositioning of product lines, improving internal efficiencies and making investments
in expansion and building production capacities and to further penetrate in the global
market. Obviously it is showing its preparedness to meet the challenges
(http://reviewessays.com/). Reading a book will remain a great pleasure into the
future and paper, as a ubiquitous material with its many uses, will continue to play an
influential role. Many artists will continue to express themselves by using this most
versatile material.
Thus, after having discussed a detailed account of growth and development of
Indian Paper Industry, the researcher moves on to the main task i.e. performance
appraisal of some selected paper mills in India. In the next chapter, our aim would be
to make a through survey of four selected sample paper mills.
[140]

REFERENCES:
1.

Ahuja, S. P. (1980), Paper industry in India-Retrospects, Prospects and

Directory New Delhi: The Institute of Economic and Market Research. p.21

2.

Bora, Khagen (2008), Energy Management in Pulp and Paper industry: A

Case Study of Cachar Paper Mills M.B.A Thesis, Faculty of Economics and
International Centre for Promotion of Enterprises (ICPE), Ljubljana
University, Ljubljana. Retrieved from: http://www.cek.ef.uni-lj.si/magister/
bora134-B.pdf

3.

Datt, Ruddar; Sundharam K. P. M (2002), Indian Economy S.Chand &

Company Ltd., New Delhi. pp.649-650

4.

Kulshrestha N.K. (1988), Analysis of Financial Statements of Indian Paper

Industry Navman Prakashan, Aligarh. pp. 1-2

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