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This report profiles India’s paper and paper products industry, discussing
market trends through 2015 and outlook for 2016 and beyond. The report also
highlights leading players in the sector including Ballarpur Industries Ltd,
Tamil Nadu Newsprint and Paper Ltd and Rainbow Papers Ltd.
The paper industry in India has been in existence since ancient times,
experiencing a paradigm change over the years. The existing domestic paper mills
employ diverse technologies- from legacy to advanced methods. The paper mills
mainly use three types of raw material - wood/chemical pulp, agro residues and
recycled fibre - to produce paper and paper products.
After a rapid consumption growth during the 2009-12 period, Indian paper
industry experienced a lull in FY13. The rising raw material prices forced
domestic manufacturers to increase the prices of paper and paper products. The
industry saw a demand revival and decline in raw material prices in FY14 which
brought some relief to the manufacturers. However, raw material prices soared
again in FY15-16. This together with slug of cheap imports from China and other
Southeast Asian nations negatively impacted the profit margins of most paper
producers. Domestic manufacturers were not able to raise their prices to match
the rise in raw material costs due to the cheaper imports. In order to remain
competitive, paper-makers have been seeking the government's intervention to
impose a 10% special additional duty on imports of paper and paperboard on an
This temporary slowdown has forced the industry players to rethink their growth
strategy. Some have deferred their expansion plans while others scaled-down
operations. Going further, decline in profitability might stimulate
consolidation in the industry over the next few years. Despite this, the
medium-term outlook for the sector looks stable considering the low per capita
consumption of paper in India.
• During 2009-13, the value of paper and paper products production of Indian
companies grew at a CAGR of 11%. After recording a peak y/y increase of 34.5% in
FY11, the sector saw subdued growth in the last four years.
• India saw rapid growth in the consumption of paper and paper products during
2006-11. During this period, annual consumption of paper and paper products grew
at a CAGR of 9.3%, much higher than the average global growth rate of around 3%.
However, after peaking in FY11, demand decelerated during FY12 and FY13. The
sector finally saw some demand recovery in FY14 but moderated again in FY15.
During 2011-15, consumption grew by 6.3%, lower than historic but still higher
than the global average.
• The index of industrial production (IIP) recorded a decline of 0.1% in FY14.
Paper and paper products industry saw growth of only 0.1% y/y. However, the
industry saw a revival in FY15 with a growth of 3% y/y. In 8MFY16, it recorded a
growth of 3.2% y/y.