The forecast for India: continued growth in pulp and paper.

India currently produces about 5.6 million metric tons/yr of paper and board. It imports 0.9 million metric tons and exports 0.2 million metric tons. Newsprint and printing and writing papers account for half of domestic production, and the rest is packaging and tissue grades. During the past 10 years, Indian paper and board output has nearly doubled, growing from 2.9 million metric tons in 1994 to 5.6 million metric tons in 2003. Paper and board consumption has grown a bit faster, moving up 3 million metric tons during the same time period.

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India uses printing and writing papers primarily for stationery, scholastic applications, and business/communication. There is a trend toward increased use of cut size papers and new cut size sheeting equipment has been installed. Containerboard is mainly used for packaging of pharmaceuticals, soaps, food products, textiles, and various other purposes. Carton-boards follow a similar pattern, with the main end uses focused on pharmaceutical/cosmetics packaging, followed by cigarettes, food-stuffs, etc.

The Indian paper and board industry is fragmented. The top 10 producers account for just 40% of the installed 6 million metric tons/yr capacity. The leading Indian paper companies are Ballapur Industries, ITC Paperboards, and Hindustan Paper. These companies annual capacities' range from 0.4 million metric tons to 0.3 million metric tons. The majority of Indian paper and board producers are locally owned, and foreign companies have only marginal ownership positions in Indian paper and board production.

Production will continue to grow in 2004 and the years ahead. There are number of new paper machine projects, expansions, new lines, second hand machines, and conversions taking place. In 2004, ITC Paperboards started up a new Voith Paper white lined chipboard machine with a capacity of 80,000 metric tons/yr, trim of 3300 mm, and a three-fourdrinier forming section.

Ballapur Industries has announced a major investment in a new uncoated freesheet machine. This machine will have an annual capacity of 250,000-300,000 metric tons and is expected to start up in late 2007. The company--with several rebuilds and the new paper machine project--is aiming at a capacity of 700,000 metric tons/yr in 2008, up from 400 000 metric tons/yr today.

Tamil Nadu Newsprint and Papers has plans to replace a 120 metric tons/day hardwood kraft pulp line at its Kagithapuram mill with a new, larger line using ECF bleaching technology. Also, the company is planning to install a new 100,000 metric tons/yr printing and writing paper machine at the same mill. Also, Yash Papers has plans for a new kraft paper machine in Faizabad, Uttar Pradesh, with start up scheduled for 2006.

Expansions of existing capacity are taking place as well. Ballapur Industries is expanding dissolving pulp output, upgrading a bamboo pulp line, making a conversion away from sack kraft to uncoated freesheet, and rebuilding a coated freesheet machine. JK Paper is installing a second hand paper machine that will produce coated freesheet at its Rayagada mill in Jaykaypur.

Khanna Paper Mills is rebuilding two coated duplex paper machines. Black Clawson delivered new formers and an Indian supplier rebuilt the press and dryer sections. The rebuild on PM1 is expected to be completed in early 2005. In addition to coated board rebuilds, the company is currently upgrading its uncoated freesheet machine at Amritsar, Punjab. Voith Paper will deliver a SpeedSizerTM and 24 new drying cylinders while E.C.H. Will supplies a cut size sheeter.

In addition, Sirpur Paper Mills, Tamil Nadu Newsprint and Papers, The Andra Pradesh Paper Mills, and West Coast Paper Mills all have ongoing rebuilds in newsprint and uncoated freesheet segments.

As the liberalization and modernization of India's economy seems set to continue, the Indian paper industry is well positioned to meet growing demand for paper and paperboard products in the world's second largest nation.

Note: This article is part of a series by Jaakko Poyry Consulting, Tarrytown, New York, USA, a provider of marketing and consulting services. Contact Soile Kilpi by email at [e-mail], or by phone at [phone].

Jaakko Poyry Consulting