Overview Industry Scenario - Why Priroty PAPER The challenge for the Indian paper industry to meet the

ever increasing demand of paper, board and newsprint is getting crippled due to shortage of fibres in the country. The future demand of paper is expected to grow from 5.6 MT at present TO 9.5 MT in 2010 and 13 MT in 2015. Demand for creamwove paper is expected to increase by 7-8%. Demand for different kinds of coated paper has increased by 8% in 2002, duplex board has recorded increase by 6.5%, kraft paper has registered a 6% rise in demand and newsprint an impressive 10%. Indian paper industry can be broadly classified into paper and paperboards and newqsprint. The paper and paper board segment constitutes of cultural paper, industrial paper, speciality paper. We will be treating newsprint as a separate type of paper and it is dealt in detail in the last section. The paper industry in India has a long history with the first mill being commissioned in 1832. The number of paper mills in the past with average capacity is as given in the table below. Year No. of Mills Installed capacity million ton Average capacity ton 1950-1951 17 0.137 8,050 1970-1971 55 0.768 13,500 1980-1981 137 1.816 11,500 1990-1991 325 3.304 10,000 1999-2000 406 6.200 15,270 2001-2002 594 8.500 22,000 (approx)

Some commercial products which have recently changed their packaging from conventional material are: PRODUCT PACKAGING PRODUCTS USED (conventional material replaced) . The Sirpur Paper Mills (SPML). the domestic paper market registered an upward trend. With the firming-up of international pulp and paper prices. which are the oldest and the most conventional packaging.Why a priority? The Indian paper industry. seems to be on a comeback trail. aerosol cans. PET. HDPE Barrels made of HDPE Paper board and corrugated boxes. In South India. The Andhra Pradesh Paper Mills (APPM). starting with ITC Bhadrachalam Paperboards Ltd (ITC-BPL) many paper mills increased production and posted higher turnovers last year on account of improved market conditions. price cuts and rising input costs for the past three years. These include: Glass bottles Metal cans – food cans. The South India Paper Mills (SIPM). PACKAGING 80% of the total packaging industry in India representing an approximate market of £1225 million (Rs86 billion) uses Rigid Packages. reeling under liberal imports. Delta Paper Mills (DPM) and the Coastal Papers (CP) have all posted higher turnovers in 2001-2002. battery cell cans Aluminium collapsible tubes Injection moulded plastic containers made of PVC. For instance.

PPCP (wood) Toothpaste tubes and other squeeze tubes HDPE.PP. HDPE. barrier film in co extrusion Cement. edible oil PET (glass) Pharmaceuticals PVC. Some recent usage in flexible packaging in the Indian industry are: POLYMER FILM USAGE APPLICATION LDPE/ LLDPE Sealant layer in lamination. co extruded films. laminated products and poly sacs in the Indian market place. milk. LLDPE. HM (paper. multi-layered/co extruded films. bottle.Milk LDPE film pouches (coated paper. squash. jute bags) Recent trends in consumption and spurt in branded products has enhanced the use of flexible packaging products such as: over wraps. mineral water. laminated tubes Carrier bags. LLDPE (heavy duty paper) Fertiliser HDPE/PP woven sacs (jute) Mineral LDPE heavy duty sacs (jute) Cement HDPE/PP/woven sacs (jute) Retail Carrier Bags LDPE. edible oil and vanaspati (poly-unsaturated vegetable oil) . vanaspati (polyunsaturated vegetable oil). LDPE. PVC (paper) Pallet Wrap LDPE. edible oils. PP. PP (metal) Soaps Polyester film. HDPE. glass to a less extent) Beverage crates HDPE. dentrifice HDPE Poly sacks. processed food. metal) Beverage. soft drink. LLDPE. Jute. Impact of new technology in flexible packaging on the Indian user industry The Indian market has graduated from the use of PVC and cellophane to the use of modern plastic such as PET and Polypropylene (PP). GLASS (paper.

PRINTING Despite the growth of television and the net. milk etc. and also as a coating material in HDPE woven sacks. reverse printed layer in Lamination metalising. metalising Cigarettes. 75% of the polyester film is used by the flexible packaging sector in laminated packs where it is normally used as an outer layer on which reverse printing is done. when compared to international usage. confectionery BOPP Sealant and non sealant layer in Laminations. processed food. meat. The National Readership Study 2002 (NRS 2002) showed that the print media has added 17 million new readers during this period of two years. bread and confectionery and other food products. However. lamitubes Processed food. edible oil packaging. . adhesive tapes LDPE/LLDPE film is normally used as an extruded film in food packaging (baked foods. pan masala. over wrap. print media has registered an impressive 10% readership gain in the last two years. BOPP Film is used mainly as over wrapping in cigarettes. carrier bags). board lamination. as a co-extruded film in flexible laminations. BOPP is low. investment costs for changing from polyester film and the excess capacity of polyester film in India. textile products. over wrap and inner wrap in biscuits. Polyester films are also used as synthetic yarn in India. spices.Polyester Outer. this is due to the problems associated with conversion.

The printing industry is recognised as a core sector. giving enormous information in the form of printed letters. There has been amazing spread of Information Technology (IT) from the end of the 20th century. Printing industry is a constantly growing industry. the world printing industry has undergone a great amount transfiguration. Return to top -------------------------------------------------------------------------------Characteristics of Market PAPER Size of Market The Indian paper industry is extremely fragmented. tickets and labels amongst others. various types of cards. from paper substrates to as wide variety of substrates – it was a long way for the printing industry. The purpose of printing is broadening to a wide variety of usage: from a traditional purpose of a means of communication. printed material has many characteristics that are difficult to be replaced by digital information. from low speed to high speed. Out of the various fields of communication means. continuously transforming with its growth. This industry structure is the result of the past Government policies which . From sheet-fed printing to web printing. black and white to colour printing. to a wider variety of attractive packaging.In the last quarter century.

Paper consumption in India is expected to reach 9.000 ton in 2000-2001.1 million.6 million tpa . paper boards is expected to grow above the industry average growth rate. leading to increased pressure on domestic production margins. Among the various sub-segments.836 million tpa at present. In the newsprint segment there are at present 39 mills (4 in central public sector. leading to an increase in its share within the paper industry.encouraged the setting up of many small mills with as low capacity as 1 ton per day. imports have increased substantially from 102.5 million tonnes by the year 2010 and 13 MT by 2015.000 ton in 1996-97 to 450. The industry is characterised with a closed or dead capacity of 1. The capacity utilisation of the industry presently is 67%. Market Trend The present domestic paper demand is 5. 2 in state public sector and 33 in private sector) with an installed capacity of about 0. …………………………………………………………………………………………… PACKAGINGS Size of Market . Indian per capita consumption of paper is 5 Kgs with an expected growth rate of 6-7% per annum over the next 5 years. In the last few years.

£115 million (INR 8 billion) the organised sector accounts for 50% of total capacity and 60% of the total market in value terms. Increasing need for sophisticated packaging solutions by Indian companies supplying both the domestic and export markets has seen the entry of large players in the organised sector. co-extrusion films. and polysacs . The competition in the medium segment is expected to increase dramatically with price cutting. whereas converters catering to the medium segment concentrate on low cost printing equipment. the small sector which constitutes the unorganised part of this industry produce over wraps. However. Indian companies in the medium segment with increased market penetration. The orgnaised sector operates in the laminated product segment such as Form-Fill-Seal pouches. Since competition is severe in this segment. It is a combination of organised (large Indian and international companies)and the unorganised (small and medium Indian companies). Form-Fill-Seal Pouches – With a market size of approx. 85% of the capital investment cost of this sector is in printing machinery. tetra packs and laminated tubes. There are some 600 –700 packaging machinery manufacturers. The three major laminated products growing rapidly in this sector are: form-fill-seal pouches. . tetrapacks. The organised industry is represented by less than 5% of the overall industry and controls over 70% of the market by volume. and lami-tubes which are required to use advanced technology to cater to the production of high value products. improved quality of products and raw materials used. The flexible packaging industry is estimated to be approximately £340 million (Rs 24 billion). Market Trend Laminated products with growth rates of 25-28 % and above is the fastest growing segment in the flexible packaging sector. and lower margins becoming a norm. converters catering to the premium segment invest in sophisticated etching and printing technology. latest technological inputs are likely to have a higher rate of success.The Indian packaging industry is of approximately £25 billion. 95% of which are in the small and medium sector located all over India.

A recent entrant in India. the single largest manufacturer in this segment is ESSEL Packaging constituting a market share of 85%. Flex Industries is the largest producer of BOPP in India. Gulabdas Flexipack Industries. however. . Tetrapacks . Heritage Packaging. cosmetics. Arun Mantex. Leela Packaging and Guardian Plasticote. Growth in the sector is around 15%.First introduced in the 80s to package fruit drinks. Toothpaste alone accounts for over 75% of the market. but the joint venture between Courtalds Plc and Indian Aluminium is likely to have an impact on the Essel monopoly in this market . Akar Laminators.Large Indian companies in this segment are FLEX Industries. Key Players Of the five major Indian companies in the Polyester sector. Heritage Packaging. Sharp Industries. fall in international prices of polyester film as well as lack of price competitiveness has made Indian exports non-viable. the Indian industry had to export over 30% of its total sales value. Other players in this filed are Paper products. Arun Mantex. KMK Lamipak and Anil Chemicals. toothpaste. These are used in the packaging of fruit drinks and to a lesser extent in milk. Over capacity. Garware Polyester is the market leader. the lower polyester film prices and a general slow down in the economy led to an oversupply situation in BOPP resulting in the export of BOPP. Sharp Industries. however with increasing competition in laminated packaging and backward integration to produce polyester film and resultant over capacity. Paper products. some medium sized companies include Multi-Flex. Hindustan Packaging Ltd is the only company manufacturing Tetrapack in technical collaboration with Tetrapak. Leela Packaging. A number of companies had planned additional capacities in BOPP expecting the increased overall demand for flexible packaging . pharmaceuticals are the major user industries. Laminated Tubes . some medium sized companies like Multi-Flex. Akar Laminators. Gulabdas Flexipack Industries. Other Indian companies in this segment are RAS.

KMK. The low levels of technology. high import tariff has affected product innovation and usage. PET. PRINTINGS Size of Market Despite the growth of television and the net. The National Readership Study 2002 (NRS 2002) showed that the print media has added 17 million new readers in this period of two years. Lamipak and Anil Chemicals. The World Bank reports that in 1995. plastic films. Materials like BOPP films are also sold direct to end users as in the case of cigarette manufactures for use as an over wrap. A fragmented end user profile. prevalence on manual labour. adhesive tapes and over wraps are also part of the flexible packaging sector. metallised film. There are around 13000 converters in India a majority in the small and medium sector located in all parts of the country. restrictive government policies and low barriers to entry have all contributed to the profusion in numbers in this industry.In the Laminated tubes sector. paper and paper board and pet chip and raw materials for flexible packaging such as aluminium foil. Users of plastic films including different types of converters manufacturing flexible packaging products like laminate films. LDPE. the single largest manufacturer is Essel Packaging. The Indian printing industry is an important factor for corporate India. For example the use of BOPP in India was slow due to lack of technical know-how and easy availability of raw materials to the converting industry. steel sheets. its output of printed information from India . Courtalds Plc – INDALCO joint venture. RAS. HDPE AND BOPP. print media has registered an impressive 10% readership gain in the last two years. Demand supply conditions A majority of the raw material manufacturers are in the organised sector which accounts for high capital costs required to establish in this sector. Manufacturers of rigid packaging raw materials such as tinplate. restricted research and development facilities. rolled aluminium products. manufacturers are all included in this category. The average reader still spends 16% of the total media time (about 18-20 minutes per day) reading.

of printed matters and paper products of all kinds are key factors for the international competitiveness of the printing industry . The making of paper and cardboard. But the introduction of sophisticated equipment will never be able to produce quality product at the expected minimal cost. Indian printers still predominantly (80 per cent) use letterpress-printing technologies. With nearly as much as 80. which is a drop of 22%. The emerging trend in future printing technology is flexography and computer controlled printing process. Despite this growth. which was 131 million in 1999. as everywhere else in the world. But in India. More urban housewives now read daily newspaper instead of poring over magazines.equalled a value of £ 20 million . According to All India Federation of Master Printers. This is 156 million per annum at present. offset technology is gaining in importance and has grown considerably.8 million in 1999 to 86. Market Trend According to surveys. Sales Tax is one of the hurdles for this industry. as many as 250 million literate adults still do not read any publications in India.2 million in 2002. the reach of magazines has declined from 93. China and South Korea in Asia. This leaves plenty of room for further growth of the printing industry. It applies very much to the Indian paper industry with an output of currently 2. An interesting point here is that. India is a significant market for suppliers of printing machinery.5 million tons per annum. Constraints The quality and cost of printing are guided and controlled to a large extent by the paper manufacturers and the government.000 print shops. This is only possible with the active support of skilled technicians with committed zeal to accept and adapt to the fast changing technology. India thus ranks fourth after Japan. newspapers are solely responsible for the sharp increase in readership.

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