Paper Industry in India – an Analytical Study
Total Page:16
File Type:pdf, Size:1020Kb
Dr. Yellaswamy Ambati, International Journal of Research in Management, Economics and Commerce, ISSN 2250-057X, Impact Factor: 6.384, Volume 07 Issue 07, July 2017, Page 13-18 Paper Industry in India – An Analytical Study Dr. Yellaswamy Ambati (Lecturer in Commerce, TS Model Junior College, Jangaon, Warangal, Telangana, India) I. INTRODUCTION Indian has the generis of using „Toddy Leave‟ (Tala Patrh) to exchange views in written form since time immemorial. India‟s Paper industry, as one of the old and core industrial manufacturing sector with a bearing on socio-economic development has undergone a significant change during the last three decades, especially after liberalisation. In India this industry plays a vital role in the overall industrial growth and also provides a necessary medium to propel our knowledge based economy forward in the new millennium. The word paper is derived from the “Latin” word “Papyrus” and from French “Papier”, Paper is basically composed of vegetable fibers mattered together to form into sheets. “Payprus” is a kind of grass material. Papyrus is an aquatic plant which grew in abundance in the delta of the Nile in Egypt. In an understandable language it means a sheet formed by the composition of vegetable, mineral, animal or synthetic fibers or mixtures with or without the addition of other substances into liquid vapour, or gas so that the fibers are intermeshed together. Several attributes of paper, including its pedagogic and packaging value makes Paper industry uniquely positioned among the manufacturing industries. Paper, is thus, recognized almost as a touchstone of socio-economic development. This traditional Indian paper sector had leverage and played a pivotal role in laying the foundation for economic growth. It is also one of the 35 high priority industries of Government of India (DIPP-Annual Report 2012-13). The sector has witnessed a sea change in the structure during the last three decades especially after liberalization. Need of the Study In India the paper consumption is predominantly domestic and the demand is driven by GDP growth. The main growth drivers for paper demand includes enhancement in government spending on education (6% of GDP), increase in literacy rate, improvement in standard of living, booming retail sector, construction boom, unprecedented growth in industries like food, pharmaceuticals and apparels, increase in packaging and advertising expenditure etc. The printing and packaging industry is growing at 14% CAGR. The population of 1.2 billion and the changing demographic profile, which will put over 65% of the population in the working class and half of that is less than 30 years old, following western consumerism, will further fuel the demand for paper and paperboards. In this background, there is need to study the paper Industry in India. Objectives of the Study The following are the main objectives of the study. 1. To study the origin and growth of paper industry in India, 2. To analyse the raw material consumption pattern of paper industry in India, 3. To study the prospects of Indian paper industry consumption & production, 4. To evaluate the scenario of Exports and Import of Indian paper industry 5. To analyse the Indian paper Industry through SWOT analysis. II. RESEARCH METHODOLOGY The study is entirely based on secondary sources with an objective of full text of information on one industry at one place, and accordingly the author made his efforts to collect the necessary data from text books, journal articles, web sources and various reports with respect to paper industry in India. The data so generated is thoroughly modified to suit to the requirements of various readers and researchers for further research in the field. The data collected for the study is authentic and valid as the data is secured from authentic sources. Data is majorly secured from INTECOS (Industrial and Technical Economic Services Pvt. Ltd., India Stat. com and CIER (Centre for Industrial and Economic Research). Origin of Paper Industry in India Paper consumption is used as basic measure of civilization. Initially writings and carvings were made on stones, clay, copper, brass and palm trees, etc. The art of paper making was first developed in China where it was made from the bark and leaves of the mulberry tree. In 751 A.D. the Arabs took the Chinese as prisoners and from them the art of paper making reached to the Middle East and Europe. http://indusedu.org Page 13 This work is licensed under a Creative Commons Attribution 4.0 International License Dr. Yellaswamy Ambati, International Journal of Research in Management, Economics and Commerce, ISSN 2250-057X, Impact Factor: 6.384, Volume 07 Issue 07, July 2017, Page 13-18 The art of paper making reached India through Arabs who initially learnt from Chinese prisoners. Earlier Aryans used “copper plates” (Tammrapatra), Loha Patra (Iron sheets), Tadapatra (Palm leaves), Bhuajpatra (Beech palm) and like material, in order to memorize the huge amount of information. The usage of metals for information sharing and storing has eroded with certain problems, and resulted in invention of paper to ease the human‟s everlasting endeavour of information sharing and storing. The usage of lead, copper and bronze as means of communication drastically reduced with the introduction of fiber sheets. In olden days, from Kashmir to Kanyakumari, there were evidences of existence of handmade paper industries. The paper industry gained its momentum during Moghal Empire. It was observed as the most common use material throughout India at the close of Akbar‟s reign. As per history, the efforts to mechanize the Indian paper industry were first made by William Carey. He started a paper mill in 1812 at Serampore, West Bengal. He himself set up a steam engine in 1820 and he added first four-drinier type machine in 1832 and paving to the development of mechanized paper mills. The Upper India Couper Paper Mills, Lucknow (1882) and Punalur Paper Mills, Kerala (1883), Titaghur Paper Mills, West Bengal (1884), Deccan Paper Mills, Maharastra (1887), Bengal Paper Mills, West Bengal (1891) and Imperial Paper Mills Corporation, West Bengal (1894) were pioneering units in the early Indian Paper Industry. The then British Government in India had given a preferential treatment to the indigenous paper production in 1880 to encourage and establishment paper mills. During the course of time the paper industry had been transformed into one of the major and key industry for independent India. III. GROWTH OF PAPER INDUSTRY IN INDIA India began its program of economic reform in 1991. One by one, the industrial sectors were freed from an administered license regimen. In July, 1991, the Government of India (GoI) decided to delicense the paper industry. This acted as an incentive for the growth of the paper industry. Figure – 01 shows the growth of paper industry in India since of its inception. Figure1: Growth of Paper Industry in India Source: CMIE/ Industry/CPPRI Above figure1 shows that the Indian paper industry recorded a unique growth in production with 0.11 million tons in 1950-51 to 10.1 million tons in 2010-11. It is 2.6% of the total world production of 394 million tons/annum of paper, paper board and newsprint. As compared to international capacities, we lag far behind. Scandinavian countries, USA, the Russian Federation, China, Indonesia and Japan are the major players in the field of pulp and paper. These countries have some of the best available raw materials for paper production, cutting edge technologies and control the global trade. Only few mills in India employ the State of Art technologies. In India, there are 759 Pulp & Paper mills with an installed capacity of 12.7 million tons producing around 10.11 million tons/annum of paper/paper board and newsprint out of an annual consumption of around 11.15 million tons. The Indian paper industry accounted for less than 3% of global paper demand. The per capita consumption of paper amounts to around 10 kilogram (Kg), which is significantly lower than world average of around 58 Kg and even the consumption levels of some of the other developing nations. http://indusedu.org Page 14 This work is licensed under a Creative Commons Attribution 4.0 International License Dr. Yellaswamy Ambati, International Journal of Research in Management, Economics and Commerce, ISSN 2250-057X, Impact Factor: 6.384, Volume 07 Issue 07, July 2017, Page 13-18 Raw Material Consumption Pattern The industry is typically divided into three major sectors based on the raw materials used. 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 waste paper based contributed only 7% & 9% respectively. Subsequently, due to scarce availability of wood based raw material, the share of recycled waste paper and agro based raw material has increased remarkably. Presently the share in production of paper from wood based raw materials, agro residues and recycled/waste paper is 31%, 22% and 47% respectively as shown in table1. Table1: Production of Paper from different Raw Materials (Million tons) Variety of Wood Agro RCF/Waste Total Paper Based Based Paper Based Writing/printing 2.36 0.73 0.81 3.9 Packaging 0.77 1.5 3.15 5.42 Newsprint 0.03 Nil 0.76 0.79 2.23 4.72 10.11 Grand Total 3.16 (31%) (22%) (47%) (100%) Source: Industry & CPPRI (2010-11) Above data reveals that the wood based mills contribute 31% of the total production which works out to about 3.1 million tons/annum, due to there are 30 large integrated paper mills based on wood/bamboo as major raw materials in India. (Nearly 2.2 tons of wood (Oven Dry (O.D.) basis) is needed to produce 1 ton of paper).