PRC India: Room to grow

Executives and managers who guide paper manufacturing firms based in India can offer a litany of reasons why their jobs are difficult. Working in their favor, however, is a growing middle class and an anticipated 7 percent annual rise in GDP in India in 2015.

From left, Brian Taylor of Recycling Today, P.R. Ray of Esskay Impex and Arun Bijur of SPB Projects and Consultancy.

In a discussion and question-and-answer session at the 2015 Paper Recycling Conference India event, held in New Delhi in late January, a paper trader and an industry consultant offered their observations on the opportunities and challenges facing India’s paper manufacturing sector.

Estimates of how many paper mills are operating in India range up to 800 said Arun Bijur of SPB Projects and Consultancy [http://www.spbpc.com/home.htm], Chennai, India. Bijur, who has nearly four decades of paper industry experience, said access to financing and increasing government scrutiny in areas such as pollution prevention will likely lead to some consolidation.

Fellow panelist P.R. Ray of Esskay Impex, Kolkata, India, said family-owned papermaking companies will remain part of the landscape in India. “Personally, I do not see the end of fragmentation of family businesses,” said Ray. He added, however, that the paper sector in India is suffering from a low level of investment in plant and equipment, since institutional investors “do not find themselves interested in investing in this sector.”

Bijur commented that if the quality of recovered fiber declines both overseas and within India, mills that can invest in new stock preparation systems may elbow out some competitors. “Given a disparity between mills that can accept lower quality materials and those that cannot, we can expect that some smaller or vintage mills will go out of business. That is a way the industry can progress,” he remarked.

Compared to North America and Europe, India enjoys a growing print media market, both panelists agreed. India’s growing literate population enjoys its access to regional newspapers in a wide variety of languages, noted Bijur, and the income of these newspapers is bolstered by the placement of mandatory government and private sector announcements.

Ray noted that print media revenue in India is not merely fighting to stay level as it is in the West, but rather has grown by a double-digit percentage in the last 10 years.

Regarding packaging grades, Ray said India is experiencing rapid growth in kraft paper production rather than seeing major investments in containerboard mills. Unless India becomes a more vigorous manufacturer of exported goods, that trend may continue, since India relies largely on kraft grades for products made for internal consumption.

Paper Recycling Conference India was held Jan. 29-30 at the Taj Palace Hotel in New Delhi.