In an interview with Paper Mart, published on 15 February, Harsh Pati Singhania of JK Paper says, “Last year was good, business-wise, as we were able to improve our sales as well as profit. In the current FY, the performance is satisfactory.”

Not just JK Paper, all domestic paper mills are doing well. Curisuly enough, while India is a fast growing market, it is also highly fragmented – the top-three players account for only 9% market share, vs 68% in USA, 72% in Indonesia, and 21% in China. 

This helps explain the shortage of paper in the market and the rising cost. The simple math is this: There is a demand-supply gap in the market and the domestic paper mills cannot fulfill this demand. 

And the import market has been shaky for many reasons. This is the Black Swan effect after the Chinese government imposed a restriction on imports of low grade recovered/ waste paper, plus a ban on grades of waste paper in July 2017, which came into force in January 2018. To top it, earlier this year, the Indian government imposed anti-dumping duty on imports of uncoated copier paper from Indonesia, Thailand and Singapore for a period of three years. Currently, the duty stands at a difference between the landed value of the product and USD855/ tonne. 

All these have impacted the import of paper adversely. According to the data compiled by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), under the Ministry of Commerce, in the first nine months of the current financial year, India’s import of paper and paperboard declined by 25% due to the diversion of export consignments to China from surplus countries, including South Korea and the members of the Association of Southeast Asian Nations. As a result, India’s total import of paper and paperboard was 1.1-million tonnes for the period between April and December 2018, as against 1.47-million tonnes in the corresponding period last year.

This decline in import gives the domestic paper mills an opportunity to increase prices. This has already happened. According to sources, paper mills raised paper and paperboard prices by 4% during the October-December 2018.

Good new bad news

But the situation is not all that bleak. For example, 2019 began with the news about Asia Pulp & Paper Group (APP) setting up India’s largest paper mill in a single site with a capacity of five-million tonnes per annum, in Ramayapatnam in the Coastal Andhra’s Prakasam district. 

This is exciting news for the simple fact that five-million tonnes is nearly 30% of the current paper and board consumption of India. This is also the biggest single FDI investment project in India. 
Meanwhile, domestic mills are gung-ho about packaging paper. In the aforementioned interview, Singhania says, “The packaging market has been growing at double digit while the overall growth of the paper industry in India is at an average of 7-7.5%. Packaging undoubtedly has immense possibilities.”  

At the same time, responding to the volatility of the paper market, converters and printers have adapted different ways to use paper. So, lighter paper weights are becoming a norm. 
The paper industry is trying. From 2018, the industry has been celebrating 1 August as Paper Day to spread awareness about paper, that consumption of paper is not harmful to the environment. But it’s not enough. Perhaps India needs a sustained paper appreciation drive. Plus, while 58% of paper in India is produced from waste paper, waste paper collection rate in the country is abysmally low. On the other hand, demand for green and sustainable and recycled paper is on the rise.