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Abstract： Indian paper industry has been showing a positive demand growth unlike Europe and USA， despite couple of issues being confronted by the paper industry such as availability of good quality raw material， scale of operation， cost reduction and environment. In view of the increasing competition among the domestic and the global players， sustainability， green production gaining significance， there is a growing need to upgrade， develop and adopt appropriate advanced technologies tailer made to the requirement of Indian paper industry. In light of above， UNIDO implemented a project supported by DIPP， Govt. of India aimed towards capacity building of the Nodel Research Institute （CPPRI）， Indian paper industry’s associations and Indian paper industry. The present article highlights key findings of various activities carried out under the project such as diagnostic assessment of the paper industry， demonstration of identified technologies， dissemination of the findings among the industries and twinning with the international institutions having relevant expertise and training.
Keywords： Indian paper industry; raw material; scale of operation; environment
1 Introduction
Indian paper industry is one of the most flourishing and thriving industries. It is the 15th largest in the world and accounts for about 4.0% of the world’s paper production.
The paper industry plays a significant role in Indian economy with a turnover of over INR 56000 crores and a resultant contribution of around INR 5500 crores to the national exchequer.
There are 863 pulp and paper mills in India with an operational installed capacity of around 21 million tons per annum as against total installed capacity of 25 million tons per annum of paper and paperboard. The paper industry provides direct employment opportunities to about 0.5 million people and indirect employment to over 1.5 million people.
2 Structure of Indian paper industry
Indian paper industry uses diverse raw materials like wood， agro residues and recycled fibres. Of around 610 operational mills， 67% of the paper production is contributed by recycled fibre-based mills （519 mills）， 22% by wood-based mills （22 mills） and the remaining 11% of the production is contributed by agro-based mills （69 mills）.
Despite the fact that Indian paper industry holds its importance in the national economy， unfortunately the industry stands highly fragmented; predominately consisting of small/medium scale mills based on recycled fibres and agro residue fibres， and few of the large mills using wood. Structure of Indian paper industry is shown in Fig.1. The operational capacity of the mills varies from 10 to 1500 t/d. Out of around 600 units which are operational， more than 400 units having capacities of below 100 t/d. Out of which 267 mills have an installed capacity of below 50 t/d. Further， there are only 40 mills having capacities of more than 300 t/d， of which only 20 mills have the capacity of more than 500 t/d. Indian paper industry is categorized into different sectors based on raw materials used or by the variety of paper produced.
3 Indian paper industry segments based on raw material
Indian paper industry is typically divided into three major sectors based on the raw materials used. These are wood-based， agro-based and recycled fibre-based sectors. The consumption of different raw materials by the paper industry depends upon the variety of paper produced， availability of raw material and environmental factors to certain extent.
The distribution of Indian paper industry based on the type of raw material used for making paper viz. wood， agro residues and recycled fibre is given in Table 1.
The raw material consumption pattern has changed over the last few decades. In early seventies the share of wood-based raw material was 84% whereas the agro-based and recycled fibre-based raw material contributed only 7% and 9%， respectively. Presently， wood-based large integrated paper mills having installed capacities in range of 250～1500 t/d， have production share of around 22%. The medium sized agro-based paper mills have capacities of 30～550 t/d with a production share of 11% whereas the recycled fibre-based paper mills operate in the range of 10～1400 t/d contributing to 67% of total production （Fig.2）. Till about a decade ago， the wood-based， agro-based and recycled fibre-based paper mills contributed 31%， 22% and 47% respectively to the total production. This spurt in mills shifting to use of recycled fibres over other raw materials is seen mainly for environmental compliance.
4 Indian paper industry segments based on products
Indian paper industry mainly produce writing & printing paper， packaging paper （industrial grade） and newspaper.
In terms of volume， highest contribution to Indian paper production comes from packaging paper followed by writing & printing paper and newspaper. Out of the total production of 17.4 million tons of paper and paperboard， writing & printing paper constitutes 35%， packaging paper 55% and newspaper around 10%. However， certain speciality papers such as security papers and check papers are imported in India.
The writing & printing paper comprises mainly of uncoated varieties viz. cream wove paper， maplitho paper; branded copier paper is mainly produced from wood-based raw materials with a little share from agro-based and recycled fibre-based raw materials， whereas the packaging paper， classified into kraft paper， boards， poster paper and others including duplex board and grey board is mainly produced by the small and medium sized recycled fibre-based and agro-based mills. Newspaper is produced by mills utilizing mainly recycled fibres as raw material. Table 2 presents the production of various grade papers from different raw materials in Indian paper industry[1]. India produces many varieties of papers， namely， writing & printing paper， packaging paper， coated paper and some specialty paper. Varieties under writing & printing paper are cream wove paper， super printing paper， maplitho paper （non-surface and surface size）， copier paper， bond paper， coating base paper and others. The varieties under packaging paper are kraft paper and boards， poster paper and others. The other varieties under coated paper are art paper and board， chromo paper and board and others. There are approximately 610 operational paper mills in India， of which twelve are major players.
5 Demand & supply scenario
The paper industry in India looks extremely positive as the demand for upstream market of paper products， like， tissue paper， tea bag tissue， filter paper， light weight online coated paper， medical grade coated paper， etc.， is growing up.
In spite of the continual focus on digitization， India’s requirement for paper is anticipated to rise 53% in the next six years， principally due to a sustained boost in the number of school-going children in rustic areas. Growing consumerism， modern retailing， rising literacy and the growing use of documentation will continue demand for writing & printing paper buoyant. The exponential enlargement of e-commerce in India has opened up the latest horizon and could donate significantly to the demand where the paper is being lengthily used for packaging. Though India’s per capita utilization is quite low compared to global peers， things are looking up and a requirement is set to rise from the present 13.2 kg to an estimated 20 kg by 2020. This indicates there is a lot of headroom for the development of paper industry in India. From a demand point of view， each one kilogram incremental per capita utilization results in supplementary demand of more than one million tons a year. Besides， strategy aspects also have a key position to play in the development of Indian paper industry. The government’s continued focus on literacy， amplified consumerism， an increase in organized retail are predictable to positively affect paper consumption and demand in India.
The following prime grades of paper imported from USA， Europe， Dubai and Singapore are label stock， wet strength papers， tea bag tissue， soft tissue， filter paper， insulation kraft， extensible kraft， decorative laminates， overlay tissue， thermal papers， digital papers， coated paper and board and some specialities. The volume of the import of paper and paperboard was around 1.34 million tons （per annum） in 2007～2008 which increased to around 1.48 million tons in 2015～2016， contributing around 8.55% of the total consumption of paper and paperboard. India exports 0.64 million tons of paper & paperboard per annum. Paper exports account for a meagre 3.70% of the total paper and paperboard production. Nearly half of the newspaper demand in India is met by imports. 1.50 million tons of newspaper was imported in 2015～2016， which is higher than 1.33 million tons for the previous year.
India exports following grades of papers to Middle East， South Eastern countries， Eastern Europe and USA： A4 copiers paper， wood-free （mostly from bamboo and agro-waste by several small mills）， MG varieties （from small agro-based mills）， coated duplex （mostly from recycled fibre-based mills） and large quantity of converted products like stationery items， calendars， books， magazines， children’s play books and comics. The export of newspaper from India is negligible.
6 Growth and future projections
Driven by the need to meet the rising demand of paper in India， the paper industry witnessed more than two-folds increase in the paper and paperboard manufacturing capacity in the past ten years. Installed capacities increased from 7.32 million tons per annum in 2005～2006 to 21.30 million tons per annum in 2015～2016 with significant capacity expansions occurring during 2009～2010 and incremental capacity additions in subsequent years. The main driver in growth of Indian paper industry has been the positive growth in domestic paper demand. As per the data available， Indian paper industry has indicated a steady growth with an average rate of around 6%～7%， which has been indicated by the growth in the capacity which has increased from 12.7 million tons （2010～2011） to 21.30 million tons （2015～2016）[2].
Based on the average growth rate of around 7.8% and the average consumption growth of around 7.4% in last decade， the projected production of paper in India in 2025 is expected to be 25 million tons and consumption around 27 million tons （approx）.
Indian paper industry can be more competitive by adding improvements of key ports， roads and railways and communication facilities， revision of forest policy is required for wood-based paper mills so that plantation can be raised by paper industry， cooperatives of farmers， and state government. Degraded forest land should be made available to the paper industry for raising plantations.
7 Major issues & challenges
Major issues confronting Indian pulp and paper industry are high cost of production caused by inadequate availability & non-availability of good-quality fibrous raw materials， uneconomical scale of operation， high cost of basic inputs including energy and water， technological obsolescence and environmental challenges. Despite a positive demand outlook， there are several barriers to the growth of the paper industry. Some of the major issues confronting the paper industry in India are summarized below. 7.1 Raw material availability
Scare availability and quality of raw material is one of the biggest challenges faced by Indian paper industry. Unlike the developed countries， India is a fibre deficient country. The paper industry depends on a mixed source of raw materials consisting of wood， agro residues and recycled fibres. However， the supply of each source is limited forcing the paper industry to depend on imported pulp， wood chips and waste paper. Various factors exert influence on consistent supply of raw materials.
Since the last several years， Indian paper industry has been plagued by inadequate supply of wood. The paper industry does not have access to the forest lands which are owned by the government. Only felling from the forests mainly bamboo， hard wood and eucalyptus are available to the paper industry. Government regulations on captive plantation by the paper industry also restrict the use of degraded forest lands for plantation of pulpable species of trees.
The availability of agro residues is affected by cycles in agricultural produce. Other factors limiting their availability for the paper industry include：
·Utilization of bagasse as an alternative fuel in sugar industry.
·Recovering of only 75% wheat straw due to prevailing harvesting mechanism.
·High cost of transportation of loose straw （40% higher）.
Availability of indigenous waste paper is poor as most of the post-consume paper finds alternate use as in packaging. Waste paper recovery rate in India is as low as 35% compared to 55%～60% in developed nations. Further in the absence of an effective waste paper collection， sorting and grading system， the quality of waste paper is inferior. The paper industry relies on waste paper imports to meet its demand of waste paper.
7.2 Cost of basic input
Rising cost of various inputs to the paper industry like fibrous raw materials， chemicals and coal severely hampered the profitability and competitive edge of the industry. The price of coal in India has increased over the years despite decline in international coal prices. The prices of fibrous materials in India have followed a rising trend， due to unfavorable demand supply scenario in the country. However in the present times due to renewed thrust on agro-forestry and softening of pulp prices， the situation has eased substantially. A comparison of cost structure in Indian mill and European mill indicates higher raw material cost for Indian mills at 57% compared to only 40% in European mill. 7.3 Low scale of operation and obsolete technologies
Indian paper industry is highly fragmented predominately consisting of small units based on recycled fibres and agro residue fibres. While only 169 mills have capacities over 100 t/d and around 424 mills in India have installed capacities ranging from 10 to 100 t/d. Most of the large scale paper mills have made substantial investments on capacity enhancements and modernization to reap the benefits of economies of scale， the smaller scale mills still operate on obsolete technologies. As a result， the small scale mills continue to have poor productivity and low operating margins.
The major reasons responsible for technological obsolescence in pulp and paper sector are：
·Industry is generating below par returns on investments. This is due to high cost of basic inputs and complexity of scale of operation. Due to low returns on investment， paper industries are not able to mobilise funds for modernisation.
·Interest component on investment is very high in India as compared to other countries. Due to low rate of interest the mills abroad are able to invest heavily on technology/modernization and therefore， are cost competitive.
·The capital to turnover ratio in case of Indian paper industry is very poor when compared to other industrial sectors in India （e.g. 3∶1 in paper industry compared to 1∶1 in cement industry）.
7.4 Environmental concerns
The major environmental issues faced by the paper industry include： high effluent load， high color load， recycled fibres， black liquor treatment in small scale agro-based mills， solid waste treatment， concern over air pollution center with growing public awareness. For compliance to strict environment regulations， the paper industry needs to invest heavily in：
·Fibre recovery system.
·Tertiary treatment systems like membrane filtration （ultra-filtration/reverse osmosis）， activated carbon filter， pressure sand filter.
·Up-gradation/modification of existing ETPs etc. to increase reuse/recycle of back liquid or treated mill effluent and zero discharge level.
7.5 Lack of skilled manpower
Indian paper industry faces a severe shortfall of skilled manpower. Presently there are only seven institutions offering B. Tech/M.Sc. Degree/Diploma courses in the area of pulp and paper. Availability of process stream technical manpower from existing seven institutions is quite low （less than 300 persons） against a requirement of 571 persons per year at the level of B. Tech. & Diploma. This shows that there exists a big gap between requirement & availability of technically trained manpower to meet the present and the growing demand of the paper industry. 7.6 Technological challenges
The major technological challenges being faced by Indian paper industry range from issues related to the raw materials handling， yield， process and energy efficiency， quality， and handling of internal process water and treatment of black liquid and solid waste including de-inked pulp （DIP） sludges and plastic waste[3]. Some of the challenges may be addressed by technology or through investments at the different mills， while others cannot be solved.
7.7 Raw material storage and handling
7.7.1 Wood-/agro-based paper mills
The availability and the high cost of raw materials have been the major issues with wood- and agro-based mills. One of the reasons for the high price in case of straws could be the higher handling charges for transportation of straws in loose form without compact bailing. This has a direct bearing on the cost of the raw material being delivered to the mills.
7.7.2 Recycled fibre-based mills
Sorting of recycled fibres is not optimal. This issue cannot be solved in the individual mills alone. Sorting systems to remove both waste components such as plastic and to improve the sorting of paper into different product categories （tailored for the product; the right fibre to the right product） would be highly beneficial. This would help ensure good product quality and minimum process variations.
7.8 Pulping of wood-/agro-based paper mills
In most of the large scale wood-based paper mills， pulping of wood-based raw material is carried out in continuous （stationary） digesters， using rapid displacement heat （RDH） pulping process followed by the oxygen delignification （ODL） process. In medium/large scale agro-based mills producing a bleached variety of writing & printing grade paper and paperboard， the most common practice of pulping is the use of continuous Pandia digesters with or without using an ODL step. Whereas， a few of the agro-based mills producing unbleached variety of paper， still use energy inefficient batch digesters. With regards to pulping of recycled fibres， various types of pulpers （ranging from low consistency to high consistency） are used including efficient drum pulpers （only in few mills）.
7.9 Bleaching
A majority of the medium-scale agro-based paper mills have bleaching sequences with elemental chlorine stages causing a concern for pulp quality and environment. The majority of large-scale wood/agro-based paper mills use elemental chlorine free （ECF） bleaching sequences. Whereas few of the medium scale agro-based mills which still use elemental chlorine as bleaching agents. Recycled fibres-based mills producing bleached variety use obsolete and environmentally unfriendly calcium hypochlorite as the bleaching chemicals which are added directly to the hydra-pulper and/or in the chest before the decker washer.
7.10 Product quality and pulp yield
Due to the fibre properties of the raw material available indigenously， this issue can be partly addressed in recycled fibre-based mills through proper fibre processing by optimizing the process conditions for pulping in hydra-pulper and in bleaching （use of proper bleaching equipment lay out and use of environmentally friendly bleaching chemicals）.
7.11 Stickies/slime issues related to closing of the water systems
Closing up of the water system to reduce fresh water consumption and effluent discharge from the mills results in the build-up of slime and stickies. This issue is extremely important， and creates huge quality and chemical usage issues unless the internal water management in the mills is handled correctly.
7.12 Environmental management
7.12.1 Effluent treatment
All the mills have high focus on effluent treatment. Small scale paper mills follow more or less the same regulations as larger scale mills， thus costs related to effluent treatment plant investment and energy/chemicals in effluent treatment systems are considerable.
Closing up of the water system and reduced fresh water consumption has resulted in serious issues related to TDS and colour （in case of agro-/ wood-based mills）.
7.12.2 Disposal/usage of solid waste （plastic waste/ DIP sludge）
This issue is especially important for mills using recycled fibres as their raw material. It cannot be solved in the mill alone; the collection system should apply better sorting systems to minimize the amount of plastic in the raw material delivered at each unit.
7.12.3 Wet end operation and chemical optimization
This is a typical challenge for mills where a majority of the costs are related to chemical usage， but also important for mills with low chemical usage. Chemical usage optimization will also affect product quality and emissions.
7.12.4 Lack of process automation
Essentially， there is a huge potential for automation and system integrators to work collaboratively with India’s pulp and paper companies and help them acquire the competitive edge. This means paper mills in India have tremendous opportunity to improve their profit margin by increasing their investments in automation systems and enterprise solutions， and integrating them to achieve collaborative production management. Enterprise solutions， such as enterprise resource planning systems， manufacturing execution systems or collaborative production management systems， and supply chain management systems have not received adequate attention from the paper industry management. Also there exists a lack of coordination between the automation department and IT department within the mill. As a result， the pulp and paper industry in India lags behind its Asian and global counterparts.
There are not many mills that have integrated wet-end systems in the overall control strategy. The paper mill， is the formative stage in a papermaking process and any forward control strategy results in impressive gains in terms of quality. Likewise， energy， being the significant portion of production cost， is getting less attention in terms of monitoring the overall consumption of power across various sections of the plant.
8 Indian paper industry revitalizing for con-solidation
Indian paper industry could observe a round of consolidation and co-operation amid different players in the next few years to together leverage quick changing manufacturing technologies and smoothen diffident addition for raw materials. This could leave less than 10 big players in the domestic market as next to the present 28 major ones. The industry， that is extremely reliant on wood pulp for manufacturing of paper and paperbased products， is also attempting to broaden its raw material base to lower cost of invention. This also means that there is vast potential for the area， which can be met through the use of new technologies. Indian paper industry has invested about Rs 20000 crore on capacity enhancement， machinery upgrade， and acquisitions. While the sector is enthusiastic to enlarge capacity further， decisions in this regard will rely on how soon companies can develop their financials. The sector， which faced issue from rising input （wood） prices， is now enhanced due to a renewed thrust on agro-forestry and softening of flesh costs. Now with the beginning of some state-of-the-art pulp and paper machines. The paper industry will meet the need of lower operating costs and superior quality.
9 Conclusions
Indian paper industry is likely to see marginal improvement in demand from education and corporate sectors， aided by expected higher GDP growth of the country. Though India’s per capita utilization is quite low compared to global peers， things are looking up and a requirement is set to rise from the present 13 million tons to an estimated 20 million tons by 2020. The government’s continued focus on literacy， amplified consumerism， an increase in organized retail are predictable to positively affect paper consumption and demand in india. This indicates there is a lot of headroom for development of paper industry in India. Paper mills’ continuous efforts on farm forestry as well as higher wood prices have led to increased availability of wood in nearby areas， thereby reducing average wood procurement costs for mills.
Industry expects major sector companies to report a marginal improvement in revenue growth to 7%～8% driven primarily by volume growth. It is believed that high capacity utilization， strong demand outlook， moving into environmentally friendly & value-added products and capacity expansion are key signs of the attractiveness of the industry over the medium to long-term.
In spite of the continual focus on digitization， India’s requirement for paper is anticipated to rise 53% in the next six years， principally due to a sustained boost in the number of school-going children in rustic areas. Growing consumerism， modern retailing， rising literacy and the growing use of documentation will continue to demand for writing & printing paper buoyant. The exponential enlargement of e-commerce in the nation has opened up the latest horizon and could donate significantly to the demand where the paper is being lengthily used for packaging.
Acknowledgment
The author expresses heartfelt gratitude to Isaksson Anders and his team for useful discussions and their inputs in preparation of the manuscript.
References
[1] Thapliyal B P， Singh K， Tandon Rita. The Indian Paper Sector Status Report 2017 & Sustainabilty Prospets[C]//A research paper in Proceedings of the 13th International Technical Conference on Pulp， Paper and Allies Industries. New Delhi， India， 2017： 1-10.
[2] Jain R K. Compendium of Census Survey of Indian Paper Industry[M]. Saharanpur， India： Central Pulp & Paper Research Institute， 2016： 10-30.
[3] Jain R K， Eriksen Oyvind， Isaksson Ander， et al. Development and Adoption of Appropriate Technologies for Enchancining Sustainability and Competitiveness of the Indian Paper Industry[C]//A research paper in Proceedings of the 13th International Technical Conference on Pulp， Paper and Allies Industries. New Delhi， India， 2017： 41-52.
Keywords： Indian paper industry; raw material; scale of operation; environment
1 Introduction
Indian paper industry is one of the most flourishing and thriving industries. It is the 15th largest in the world and accounts for about 4.0% of the world’s paper production.
The paper industry plays a significant role in Indian economy with a turnover of over INR 56000 crores and a resultant contribution of around INR 5500 crores to the national exchequer.
There are 863 pulp and paper mills in India with an operational installed capacity of around 21 million tons per annum as against total installed capacity of 25 million tons per annum of paper and paperboard. The paper industry provides direct employment opportunities to about 0.5 million people and indirect employment to over 1.5 million people.
2 Structure of Indian paper industry
Indian paper industry uses diverse raw materials like wood， agro residues and recycled fibres. Of around 610 operational mills， 67% of the paper production is contributed by recycled fibre-based mills （519 mills）， 22% by wood-based mills （22 mills） and the remaining 11% of the production is contributed by agro-based mills （69 mills）.
Despite the fact that Indian paper industry holds its importance in the national economy， unfortunately the industry stands highly fragmented; predominately consisting of small/medium scale mills based on recycled fibres and agro residue fibres， and few of the large mills using wood. Structure of Indian paper industry is shown in Fig.1. The operational capacity of the mills varies from 10 to 1500 t/d. Out of around 600 units which are operational， more than 400 units having capacities of below 100 t/d. Out of which 267 mills have an installed capacity of below 50 t/d. Further， there are only 40 mills having capacities of more than 300 t/d， of which only 20 mills have the capacity of more than 500 t/d. Indian paper industry is categorized into different sectors based on raw materials used or by the variety of paper produced.
3 Indian paper industry segments based on raw material
Indian paper industry is typically divided into three major sectors based on the raw materials used. These are wood-based， agro-based and recycled fibre-based sectors. The consumption of different raw materials by the paper industry depends upon the variety of paper produced， availability of raw material and environmental factors to certain extent.
The distribution of Indian paper industry based on the type of raw material used for making paper viz. wood， agro residues and recycled fibre is given in Table 1.
The raw material consumption pattern has changed over the last few decades. In early seventies the share of wood-based raw material was 84% whereas the agro-based and recycled fibre-based raw material contributed only 7% and 9%， respectively. Presently， wood-based large integrated paper mills having installed capacities in range of 250～1500 t/d， have production share of around 22%. The medium sized agro-based paper mills have capacities of 30～550 t/d with a production share of 11% whereas the recycled fibre-based paper mills operate in the range of 10～1400 t/d contributing to 67% of total production （Fig.2）. Till about a decade ago， the wood-based， agro-based and recycled fibre-based paper mills contributed 31%， 22% and 47% respectively to the total production. This spurt in mills shifting to use of recycled fibres over other raw materials is seen mainly for environmental compliance.
4 Indian paper industry segments based on products
Indian paper industry mainly produce writing & printing paper， packaging paper （industrial grade） and newspaper.
In terms of volume， highest contribution to Indian paper production comes from packaging paper followed by writing & printing paper and newspaper. Out of the total production of 17.4 million tons of paper and paperboard， writing & printing paper constitutes 35%， packaging paper 55% and newspaper around 10%. However， certain speciality papers such as security papers and check papers are imported in India.
The writing & printing paper comprises mainly of uncoated varieties viz. cream wove paper， maplitho paper; branded copier paper is mainly produced from wood-based raw materials with a little share from agro-based and recycled fibre-based raw materials， whereas the packaging paper， classified into kraft paper， boards， poster paper and others including duplex board and grey board is mainly produced by the small and medium sized recycled fibre-based and agro-based mills. Newspaper is produced by mills utilizing mainly recycled fibres as raw material. Table 2 presents the production of various grade papers from different raw materials in Indian paper industry[1]. India produces many varieties of papers， namely， writing & printing paper， packaging paper， coated paper and some specialty paper. Varieties under writing & printing paper are cream wove paper， super printing paper， maplitho paper （non-surface and surface size）， copier paper， bond paper， coating base paper and others. The varieties under packaging paper are kraft paper and boards， poster paper and others. The other varieties under coated paper are art paper and board， chromo paper and board and others. There are approximately 610 operational paper mills in India， of which twelve are major players.
5 Demand & supply scenario
The paper industry in India looks extremely positive as the demand for upstream market of paper products， like， tissue paper， tea bag tissue， filter paper， light weight online coated paper， medical grade coated paper， etc.， is growing up.
In spite of the continual focus on digitization， India’s requirement for paper is anticipated to rise 53% in the next six years， principally due to a sustained boost in the number of school-going children in rustic areas. Growing consumerism， modern retailing， rising literacy and the growing use of documentation will continue demand for writing & printing paper buoyant. The exponential enlargement of e-commerce in India has opened up the latest horizon and could donate significantly to the demand where the paper is being lengthily used for packaging. Though India’s per capita utilization is quite low compared to global peers， things are looking up and a requirement is set to rise from the present 13.2 kg to an estimated 20 kg by 2020. This indicates there is a lot of headroom for the development of paper industry in India. From a demand point of view， each one kilogram incremental per capita utilization results in supplementary demand of more than one million tons a year. Besides， strategy aspects also have a key position to play in the development of Indian paper industry. The government’s continued focus on literacy， amplified consumerism， an increase in organized retail are predictable to positively affect paper consumption and demand in India.
The following prime grades of paper imported from USA， Europe， Dubai and Singapore are label stock， wet strength papers， tea bag tissue， soft tissue， filter paper， insulation kraft， extensible kraft， decorative laminates， overlay tissue， thermal papers， digital papers， coated paper and board and some specialities. The volume of the import of paper and paperboard was around 1.34 million tons （per annum） in 2007～2008 which increased to around 1.48 million tons in 2015～2016， contributing around 8.55% of the total consumption of paper and paperboard. India exports 0.64 million tons of paper & paperboard per annum. Paper exports account for a meagre 3.70% of the total paper and paperboard production. Nearly half of the newspaper demand in India is met by imports. 1.50 million tons of newspaper was imported in 2015～2016， which is higher than 1.33 million tons for the previous year.
India exports following grades of papers to Middle East， South Eastern countries， Eastern Europe and USA： A4 copiers paper， wood-free （mostly from bamboo and agro-waste by several small mills）， MG varieties （from small agro-based mills）， coated duplex （mostly from recycled fibre-based mills） and large quantity of converted products like stationery items， calendars， books， magazines， children’s play books and comics. The export of newspaper from India is negligible.
6 Growth and future projections
Driven by the need to meet the rising demand of paper in India， the paper industry witnessed more than two-folds increase in the paper and paperboard manufacturing capacity in the past ten years. Installed capacities increased from 7.32 million tons per annum in 2005～2006 to 21.30 million tons per annum in 2015～2016 with significant capacity expansions occurring during 2009～2010 and incremental capacity additions in subsequent years. The main driver in growth of Indian paper industry has been the positive growth in domestic paper demand. As per the data available， Indian paper industry has indicated a steady growth with an average rate of around 6%～7%， which has been indicated by the growth in the capacity which has increased from 12.7 million tons （2010～2011） to 21.30 million tons （2015～2016）[2].
Based on the average growth rate of around 7.8% and the average consumption growth of around 7.4% in last decade， the projected production of paper in India in 2025 is expected to be 25 million tons and consumption around 27 million tons （approx）.
Indian paper industry can be more competitive by adding improvements of key ports， roads and railways and communication facilities， revision of forest policy is required for wood-based paper mills so that plantation can be raised by paper industry， cooperatives of farmers， and state government. Degraded forest land should be made available to the paper industry for raising plantations.
7 Major issues & challenges
Major issues confronting Indian pulp and paper industry are high cost of production caused by inadequate availability & non-availability of good-quality fibrous raw materials， uneconomical scale of operation， high cost of basic inputs including energy and water， technological obsolescence and environmental challenges. Despite a positive demand outlook， there are several barriers to the growth of the paper industry. Some of the major issues confronting the paper industry in India are summarized below. 7.1 Raw material availability
Scare availability and quality of raw material is one of the biggest challenges faced by Indian paper industry. Unlike the developed countries， India is a fibre deficient country. The paper industry depends on a mixed source of raw materials consisting of wood， agro residues and recycled fibres. However， the supply of each source is limited forcing the paper industry to depend on imported pulp， wood chips and waste paper. Various factors exert influence on consistent supply of raw materials.
Since the last several years， Indian paper industry has been plagued by inadequate supply of wood. The paper industry does not have access to the forest lands which are owned by the government. Only felling from the forests mainly bamboo， hard wood and eucalyptus are available to the paper industry. Government regulations on captive plantation by the paper industry also restrict the use of degraded forest lands for plantation of pulpable species of trees.
The availability of agro residues is affected by cycles in agricultural produce. Other factors limiting their availability for the paper industry include：
·Utilization of bagasse as an alternative fuel in sugar industry.
·Recovering of only 75% wheat straw due to prevailing harvesting mechanism.
·High cost of transportation of loose straw （40% higher）.
Availability of indigenous waste paper is poor as most of the post-consume paper finds alternate use as in packaging. Waste paper recovery rate in India is as low as 35% compared to 55%～60% in developed nations. Further in the absence of an effective waste paper collection， sorting and grading system， the quality of waste paper is inferior. The paper industry relies on waste paper imports to meet its demand of waste paper.
7.2 Cost of basic input
Rising cost of various inputs to the paper industry like fibrous raw materials， chemicals and coal severely hampered the profitability and competitive edge of the industry. The price of coal in India has increased over the years despite decline in international coal prices. The prices of fibrous materials in India have followed a rising trend， due to unfavorable demand supply scenario in the country. However in the present times due to renewed thrust on agro-forestry and softening of pulp prices， the situation has eased substantially. A comparison of cost structure in Indian mill and European mill indicates higher raw material cost for Indian mills at 57% compared to only 40% in European mill. 7.3 Low scale of operation and obsolete technologies
Indian paper industry is highly fragmented predominately consisting of small units based on recycled fibres and agro residue fibres. While only 169 mills have capacities over 100 t/d and around 424 mills in India have installed capacities ranging from 10 to 100 t/d. Most of the large scale paper mills have made substantial investments on capacity enhancements and modernization to reap the benefits of economies of scale， the smaller scale mills still operate on obsolete technologies. As a result， the small scale mills continue to have poor productivity and low operating margins.
The major reasons responsible for technological obsolescence in pulp and paper sector are：
·Industry is generating below par returns on investments. This is due to high cost of basic inputs and complexity of scale of operation. Due to low returns on investment， paper industries are not able to mobilise funds for modernisation.
·Interest component on investment is very high in India as compared to other countries. Due to low rate of interest the mills abroad are able to invest heavily on technology/modernization and therefore， are cost competitive.
·The capital to turnover ratio in case of Indian paper industry is very poor when compared to other industrial sectors in India （e.g. 3∶1 in paper industry compared to 1∶1 in cement industry）.
7.4 Environmental concerns
The major environmental issues faced by the paper industry include： high effluent load， high color load， recycled fibres， black liquor treatment in small scale agro-based mills， solid waste treatment， concern over air pollution center with growing public awareness. For compliance to strict environment regulations， the paper industry needs to invest heavily in：
·Fibre recovery system.
·Tertiary treatment systems like membrane filtration （ultra-filtration/reverse osmosis）， activated carbon filter， pressure sand filter.
·Up-gradation/modification of existing ETPs etc. to increase reuse/recycle of back liquid or treated mill effluent and zero discharge level.
7.5 Lack of skilled manpower
Indian paper industry faces a severe shortfall of skilled manpower. Presently there are only seven institutions offering B. Tech/M.Sc. Degree/Diploma courses in the area of pulp and paper. Availability of process stream technical manpower from existing seven institutions is quite low （less than 300 persons） against a requirement of 571 persons per year at the level of B. Tech. & Diploma. This shows that there exists a big gap between requirement & availability of technically trained manpower to meet the present and the growing demand of the paper industry. 7.6 Technological challenges
The major technological challenges being faced by Indian paper industry range from issues related to the raw materials handling， yield， process and energy efficiency， quality， and handling of internal process water and treatment of black liquid and solid waste including de-inked pulp （DIP） sludges and plastic waste[3]. Some of the challenges may be addressed by technology or through investments at the different mills， while others cannot be solved.
7.7 Raw material storage and handling
7.7.1 Wood-/agro-based paper mills
The availability and the high cost of raw materials have been the major issues with wood- and agro-based mills. One of the reasons for the high price in case of straws could be the higher handling charges for transportation of straws in loose form without compact bailing. This has a direct bearing on the cost of the raw material being delivered to the mills.
7.7.2 Recycled fibre-based mills
Sorting of recycled fibres is not optimal. This issue cannot be solved in the individual mills alone. Sorting systems to remove both waste components such as plastic and to improve the sorting of paper into different product categories （tailored for the product; the right fibre to the right product） would be highly beneficial. This would help ensure good product quality and minimum process variations.
7.8 Pulping of wood-/agro-based paper mills
In most of the large scale wood-based paper mills， pulping of wood-based raw material is carried out in continuous （stationary） digesters， using rapid displacement heat （RDH） pulping process followed by the oxygen delignification （ODL） process. In medium/large scale agro-based mills producing a bleached variety of writing & printing grade paper and paperboard， the most common practice of pulping is the use of continuous Pandia digesters with or without using an ODL step. Whereas， a few of the agro-based mills producing unbleached variety of paper， still use energy inefficient batch digesters. With regards to pulping of recycled fibres， various types of pulpers （ranging from low consistency to high consistency） are used including efficient drum pulpers （only in few mills）.
7.9 Bleaching
A majority of the medium-scale agro-based paper mills have bleaching sequences with elemental chlorine stages causing a concern for pulp quality and environment. The majority of large-scale wood/agro-based paper mills use elemental chlorine free （ECF） bleaching sequences. Whereas few of the medium scale agro-based mills which still use elemental chlorine as bleaching agents. Recycled fibres-based mills producing bleached variety use obsolete and environmentally unfriendly calcium hypochlorite as the bleaching chemicals which are added directly to the hydra-pulper and/or in the chest before the decker washer.
7.10 Product quality and pulp yield
Due to the fibre properties of the raw material available indigenously， this issue can be partly addressed in recycled fibre-based mills through proper fibre processing by optimizing the process conditions for pulping in hydra-pulper and in bleaching （use of proper bleaching equipment lay out and use of environmentally friendly bleaching chemicals）.
7.11 Stickies/slime issues related to closing of the water systems
Closing up of the water system to reduce fresh water consumption and effluent discharge from the mills results in the build-up of slime and stickies. This issue is extremely important， and creates huge quality and chemical usage issues unless the internal water management in the mills is handled correctly.
7.12 Environmental management
7.12.1 Effluent treatment
All the mills have high focus on effluent treatment. Small scale paper mills follow more or less the same regulations as larger scale mills， thus costs related to effluent treatment plant investment and energy/chemicals in effluent treatment systems are considerable.
Closing up of the water system and reduced fresh water consumption has resulted in serious issues related to TDS and colour （in case of agro-/ wood-based mills）.
7.12.2 Disposal/usage of solid waste （plastic waste/ DIP sludge）
This issue is especially important for mills using recycled fibres as their raw material. It cannot be solved in the mill alone; the collection system should apply better sorting systems to minimize the amount of plastic in the raw material delivered at each unit.
7.12.3 Wet end operation and chemical optimization
This is a typical challenge for mills where a majority of the costs are related to chemical usage， but also important for mills with low chemical usage. Chemical usage optimization will also affect product quality and emissions.
7.12.4 Lack of process automation
Essentially， there is a huge potential for automation and system integrators to work collaboratively with India’s pulp and paper companies and help them acquire the competitive edge. This means paper mills in India have tremendous opportunity to improve their profit margin by increasing their investments in automation systems and enterprise solutions， and integrating them to achieve collaborative production management. Enterprise solutions， such as enterprise resource planning systems， manufacturing execution systems or collaborative production management systems， and supply chain management systems have not received adequate attention from the paper industry management. Also there exists a lack of coordination between the automation department and IT department within the mill. As a result， the pulp and paper industry in India lags behind its Asian and global counterparts.
There are not many mills that have integrated wet-end systems in the overall control strategy. The paper mill， is the formative stage in a papermaking process and any forward control strategy results in impressive gains in terms of quality. Likewise， energy， being the significant portion of production cost， is getting less attention in terms of monitoring the overall consumption of power across various sections of the plant.
8 Indian paper industry revitalizing for con-solidation
Indian paper industry could observe a round of consolidation and co-operation amid different players in the next few years to together leverage quick changing manufacturing technologies and smoothen diffident addition for raw materials. This could leave less than 10 big players in the domestic market as next to the present 28 major ones. The industry， that is extremely reliant on wood pulp for manufacturing of paper and paperbased products， is also attempting to broaden its raw material base to lower cost of invention. This also means that there is vast potential for the area， which can be met through the use of new technologies. Indian paper industry has invested about Rs 20000 crore on capacity enhancement， machinery upgrade， and acquisitions. While the sector is enthusiastic to enlarge capacity further， decisions in this regard will rely on how soon companies can develop their financials. The sector， which faced issue from rising input （wood） prices， is now enhanced due to a renewed thrust on agro-forestry and softening of flesh costs. Now with the beginning of some state-of-the-art pulp and paper machines. The paper industry will meet the need of lower operating costs and superior quality.
9 Conclusions
Indian paper industry is likely to see marginal improvement in demand from education and corporate sectors， aided by expected higher GDP growth of the country. Though India’s per capita utilization is quite low compared to global peers， things are looking up and a requirement is set to rise from the present 13 million tons to an estimated 20 million tons by 2020. The government’s continued focus on literacy， amplified consumerism， an increase in organized retail are predictable to positively affect paper consumption and demand in india. This indicates there is a lot of headroom for development of paper industry in India. Paper mills’ continuous efforts on farm forestry as well as higher wood prices have led to increased availability of wood in nearby areas， thereby reducing average wood procurement costs for mills.
Industry expects major sector companies to report a marginal improvement in revenue growth to 7%～8% driven primarily by volume growth. It is believed that high capacity utilization， strong demand outlook， moving into environmentally friendly & value-added products and capacity expansion are key signs of the attractiveness of the industry over the medium to long-term.
In spite of the continual focus on digitization， India’s requirement for paper is anticipated to rise 53% in the next six years， principally due to a sustained boost in the number of school-going children in rustic areas. Growing consumerism， modern retailing， rising literacy and the growing use of documentation will continue to demand for writing & printing paper buoyant. The exponential enlargement of e-commerce in the nation has opened up the latest horizon and could donate significantly to the demand where the paper is being lengthily used for packaging.
Acknowledgment
The author expresses heartfelt gratitude to Isaksson Anders and his team for useful discussions and their inputs in preparation of the manuscript.
References
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