Paper and paperboard manufacturers in India are implementing capacity expansion, de-bottlenecking as well as technology upgradation projects involving an investment of ₹25,000 crore, a top leader of Indian Paper Manufacturers Association said.

“A million tonne in capacity will be added. But it’s not as much about capacity as the focus on modernisation, de-bottlenecking and replacing old technology. Around ₹5,000 crore of the investment will be on new technology to help lower carbon footprint,” IPMA president Pawan Agarwal said in a select media interaction on Tuesday.

His company Naini Papers, of which he is the managing director, is setting up a 1.25 lakh tonne plant with ₹2,000-crore investment in Uttarakhand to make paper pouches that will replace single use plastic used in food packaging.

Growing at 8.2% CAGR

Mr. Agarwal, who was in Hyderabad for the two day PaperTech 2024 conference and exhibition, said the investments assume significance amid rising demand for the products, particularly an enhanced offtake from the e-commerce sector, and new avenues opening up by virtue of paper being environment friendly and biodegradable. “There is a lot of expected demand for paper industry and products. E-commerce has driven the demand and we expecting 8.2% CAGR for the next five years, which is almost similar to the GDP growth,” he said.

To queries on the paper and paperboard industry, he said it consists of both organised and unorganised players with former’s production pegged at nearly 22 million tonne (Mt). The market for the products in India is around 25 Mt.

Idle capacity

The installed capacity would be around 30 Mt with a lot of it in the unorganised sector lying idle and plants shut, he said, adding there is little by way data pertaining to the unorganised sector.

On challenges for the industry, Mr. Agarwal said rising imports from ASEAN countries and China, especially post Covid-19, is one of the biggest. With imports rising 34% in last one year alone, the imported price almost $100 less per tonne and products with quality defects and non-standard sizes are entering, IPMA has represented to the government to introduce an anti-dumping duty. “We want around 20-25% dumping duty,” he said, adding such a measure will help the domestic industry that provides 5 lakh direct employment and 15 lakh indirect employment.

He told the conference that member mills continue to make sizeable investments to upgrade and implement clean and green technologies, product quality and on farm forestry. Specific water and energy consumption is being reduced continuously so as to lessen the carbon footprint.

Focus on raw material

“In terms of sustainability, we need to focus even more on three aspects of raw material procurement, production process and the end-use of paper. Substantial amounts have been spent by the paper industry on plantation R&D, production of high quality clonal saplings with lesser rotation period, technical extension services to improve agro/farm forestry services, hand holding of marginal farmers over a gestation period of 4-5 years,” he said.

Use of recycled fibre/wastepaper for making paper is growing. Last couple of years, however, were challenging in view of a severe crunch in availability of wastepaper as supply chain disruptions and inadequate availability of containers hampered the arrivals of wastepaper.

From next financial year around 40 paper mills are expected to come under the ambit of the Carbon Credit Trading Scheme (CCTS). The targets will be in terms of reduction or removal of greenhouse gases emissions.