PAPER AND BOARD:

Historical Evolution:
1. In 1947 when Pakistan came into existence, there was not a single plant to manufacture
paper in the country.
2. requirements of the paper in the country met through imports.

3. Pakistan Industrial Development Corporation (PIDC) was set up for the establishment of
different industries including paper mill in public sector.

4. In 1953, PIDC established the first paper mill at Chandargona in East Pakistan (Now
Bangladesh), followed by a high grade paper mills -Adamjee Paper & Board Mills at
Noshera in NWFP in 1956 and a Newsprint Mill at Khulna in East Pakistan (Bangladesh)
in 1959.

5. By 2001, Adamjee paper & board mills was catering to nearly 80 percent of domestic
demand.

6. Later on Adamjee Paper and Board closed down its operation.

7. With the separation of East Pakistan in 1971, a serious shortage of writing/printing paper
and newsprint was created in West Pakistan, as the supplies of these papers were
completely cut off from Bangladesh.

8. Now, this industry has different units across the country producing various grades of
papers, using local and imported raw materials.

9. Unfortunately, due to poor planning in 1980’s and 1990’s, many of the units are lying
closed from that time. At present, in Pakistan there are about 100 units in the organized
and unorganized sectors.

10. More than 70 % of mills are located in Punjab province due to its availability of
underground water and wheat straw as a primary raw material, 20 % are in Sindh
province and 10% are in Khyber Pakhunkhwa province.

https://doksi.net/get.php?order=DisplayPreview&lid=24920

11. Due to extremely low density of forests in Pakistan, there is difficulty in maintaining
supply of wood pulp required for production of paper and paperboard. This is why
Pakistan's paper industry uses mostly non-wood fibrous material such as wheat straw,
baggase and river grass.
 https://fp.brecorder.com/2018/02/20180220345622/

Policies :
Big units in the paper industry are focusing supply chain management and value addition of
products but this sector lacking consistent and industry friendly government policies.
https://fp.brecorder.com/2018/05/20180520373051/

Government policies over the years have often discouraged paper manufacturing. Interestingly,
production of Paper in Pakistan is subject to Excise duty, which is specifically levied to
discourage production of a particular item!
http://www.sayid.net/products/recycling.html

Investments:
Lack of direct investment hence putting pressure to existing operations.

Trade agreement:
1-Pakistan has imposed anti-dumping duty from Korea, Indonesia, China and Taiwan. Antidumping duty
is imposed because the domestic industry suffered material injury on: significant price under cutting,
price depression, price suppression, negative effects on: inventories, return on investment, cash flow,
decline in: profits, capacity utilization, and productivity.

2-demand for paper products in the country is increasing significantly, leading to increase of
imports by 12- 15 percent annually.
The import of paper and paper board is subjected to 25% import duty and 15% regulatory duty,
18% sales tax, 2% withholding tax and 1% special excise duty which are on very higher side.
The gap in the demand & supply of raw material is filled through the smuggled products via
Afghanistan. The taxation should be simplified in order to avoid illegal trade of the products.

3-- China's enforced environmental regulation that has banned its import of waste paper while
closing down units in the paper industry in China causing international paper prices to become
volatile and increased Pakistan's import of news print paper. 
As a result Pakistan Pulp Paper & Board Mills Association has made an appeal to the
government recently to increase tariffs on imports as prices of final products have fallen to
unprecedented levels.
https://fp.brecorder.com/2018/02/20180220345622/

(https://fp.brecorder.com/2018/05/20180520373051/)

Effect: profitability, function, productivity:

paper industry is of high significance in the economy of Pakistan because of two reasons;
Pakistan is predominantly an agrarian economy offering suitable raw material base and Pakistan
has a large and growing market size having a population of 220 million.

Pakistan is also one of the few countries in the world where agricultural waste and Neutral
Sodium Sulfite cooking process is used to produce paper and paperboard grades. 
(http://sayid.net/paper_making_in_pakistan.php)

increase in demand for paper and paperboard products world over is obvious from the drastic
increase in the production of paper and paperboard products globally. Despite of current
challenges faced by the country it's a renowned fact of pulp and paper industry in Pakistan has
huge potential to develop.
(https://fp.brecorder.com/2018/05/20180520373051/)

Productivity:
rise and fall in the Production of paper and board industry during last two decades from1990 to 2010.
Different factors are involved in the increase and decrease in the production of paper industry. Such as
ever changing policies of government influence production of paper both positively or negatively
according to the required or unwanted implementation respectively, social aspects that influence need
and production of paper, educational programs by the government and increase in schools and colleges
by the private sector, load shedding and inflation etc
When Pakistan became independent in 1947, there were no plants to manufacture paper and
board thus the demand was met through imports initially. Later in 1953 Pakistan Industrial
Development Corporation (PIDC) established the first paper mill in East Pakistan (Bangladesh).
In 1956 another paper mill was established, Adamjee Paper & Board Mills at Noshera in NWFP
followed by a Newsprint Mill in East Pakistan in 1959. However, West Pakistan started facing
serious shortage of paper and newsprint due to separation of East Pakistan in 1971. Also, poor
planning in 1980’s and 1990’s also led to many units lying closed. By 2001, 80% of the domestic
demand was being catered by Adamjee paper & board mills and currently in Pakistan there are
100 units with more than 70% located in Punjab due to availability of raw materials, wheat straw
and underground water. https://doksi.net/get.php?order=DisplayPreview&lid=24920
Since, there is low density of forests in Pakistan this sector uses mostly non-wood material for
production of paper and paper board due to lack of supply of wood pulp.
https://fp.brecorder.com/2018/02/20180220345622/

In Pakistan, Large scale paper and board companies are spending huge investments in R&D to
improve production techniques and supply chain management and also working on value added
services. But due to lack of consistent and friendly policies by government, such as no direct
investment and excise duties on production of paper have discouraged firms to set up while
increasing cost for the existing firms.( http://www.sayid.net/products/recycling.html)
http://www.pitad.org.pk/Publications/26-Pakistan%20India%20Trade%20Liberalization%20Sectoral
%20Study%20on%20Paper%20and%20Paperboard%20Industry.pdf

Hence, the increasing domestic demand for paper is being met through imports which is subject
to import duty of 25%, regulatory duty 15%, 2% withholding tax, sales tax 18% and special
excise duty 1% which is a lot higher.
Additionally, the gap in demand and supply of raw materials is met through smuggling via
Afghanistan.
https://fp.brecorder.com/2010/05/201005301062723/