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Future of Paper Industry in India


      You have to be opportunistic, and try to figure out what creates value….where the bottom is, what creates incremental value, and in what combinations. – John C Malone

Paper demand in western countries is shrinking despite its economic growth and it is expected to continue in the future. Indian paper industry is expected to grow and reach 25 million tonnes by 2021 from 20.37 million tonnes in 2019-20 at a rate of 7.8% CAGR (Compound annual growth rate), India has come out as the fastest-growing market in terms of consumption, and posting 10.6% growth in per capita consumption of paper in 2017-18, reveals the ASSOCHAM paper. Western countries are already focusing on gearing towards the eastern market gradually. Among the targeted ones, India is the major one where 75% of acquisitions have been made in India particularly in APPM (Andhra Pradesh paper Mills).



source: ResearchGate


Most of the Indian Mills are privately owned and have few that are running under the Government of India. There are 600 paper mills in India among which 12 are big players such as BILT, ITC, APPM etc. Indian paper industry is currently enjoying a period of steady growth and rising profits. However, the industry is about to experience a major transformation and enter into a period of consolidation. This transitional period will lead to a fraction of the big players having control over the majority of the industry and the more marginal paper mills being pushed out from the market. The major reasons cited at the event for the upcoming consolidation were:

1) Small paper mills not being able to compete with the investment cap of business tycoons.

2) Lower cost paper imports from South-East Asia

3) Stringent environmental regulations by the Government of India

 

 

Moving towards sustainable development presents both opportunities and threats for the Indian paper Industry. Smaller paper mills are presented with financial struggles like investing in infrastructure required for adapting to the strict environmental regulations on water and fuel consumption imposed by the Government of India, Uneconomical plant size, and technological obsolescence. On the other hand, the ban on plastics presents tremendous opportunities for the paper industry to grow and diversify its products. The demand for paper is going to increase rapidly as the world is getting more eco-conscious and the demand for alternatives for plastic use is growing rapidly.

Integration of Electrical systems, adding iMCC (intelligent motor control systems) with mill Distributed Control Systems (DCS) completely, will help in monitoring the overall energy consumption. Also integrating raw material being used or real-time flow information and using same for quality control at various stages will improve the efficiency.

 

source: kanvic

Enterprise resource planning systems, manufacturing execution systems or collaborative production management systems, and supply chain management systems have not received proper attention from the paper industry. Also, there exists a lack of coordination between the automation department and IT within the mill. As a result pulp and paper industry in India lags behind its Asian and global counterparts.

Integrated production management will improve the mill management and business systems rapidly. Quality control labs with statistical models can be linked to give an advantage to both production and quality control personnel. Dealers and end users can track their orders as the product moves through various stages of production. Business will not survive with just traditional automation systems. Only integrated automation and enterprise systems will enable these industries to achieve sustainable competitive advantage.

It’s high time for integrators to work collaboratively with the pulp and paper industry to enable them for the competitive business. Indian pulp and paper industry has tremendous opportunity to improve their profit margin by increasing their investment in automation systems and enterprise solutions, and most important integrating them to achieve collaborative production management. Indian paper industry has a lot of potential to grow and this gap shows that, as in India paper consumption is increasing rapidly as never before.

 - Anshu Prakash

    Electrical engineer
    Yash Pakka Pvt Ltd
    e-mail: send2anshup@gmail.com

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