Macro Economy

Paper makers protest ‘tree-cutters’ tag

| Updated on: Nov 12, 2014

“Save trees, don’t waste paper” is an all-too-familiar eco-friendly message. But the image that paper requires cutting trees appears to be pulp fiction, based on inputs from paper manufacturers and traders.

The negative perception is hurting the ₹35,000 crore paper industry that employs five lakh people directly, they say. The industry is expecting that packaging demand from e-commerce will boost its demand prospects in the coming decade.

Growing demand

Paper manufacturers project that the industry could grow from 15 million tonnes in 2015 to 20 million tonnes by 2020 – an annual growth rate of six per cent. Even with that, there is room for more prospects, as the Indian paper industry accounts for under three per cent of the world’s production of paper.

The key segment that will see phenomenal growth will be personal hygiene products such as tissue paper. This market is expected to grow at a CAGR of 20 per cent in the next 3-5 years, says Gagan Sahni, Exhibitions Director, International Trade and Exhibitions India. Packaging sector accounts for 60 per cent of the current market and is set to grow with buoyant e-commerce sales projections. Education segment is the next biggest, accounting for over 30 per cent market share.

If you wonder about newsprint, it is a large market, but due to more competitive prices in the global market, bulk of the demand is met through imports, says Anil Kumar, Executive Director and CEO, Shreyans Industries, a Punjab-based paper manufacturer.

The paper industry currently has around 800 mills, most of them with small capacities. Consolidation of these units to larger mills that can deploy better technology – similar to what happened in China – will boost growth prospects, say paper manufacturers.

Barking up the wrong tree

Given the potential for growth, the industry feels insulted that it is labelled as ‘tree cutters’ based on global practices. Unlike other countries, India is ‘fibre deficient’ and augments pulp input from trees with other sources. “Only 30 per cent of the input material is from trees, the bulk is from other agro sources such as rice straw, wheat straw and bagasse along with recycled paper,” says Kumar.

And even the wood that is used is not from forests, but taken from plantations. Saplings are given to marginal farmers and the timber is harvested in four-five years and fresh ones planted annually, says BR Rao of the Federation of Paper Traders Association of India. He says that when using disposables, consumers must note that paper is fully bio-degradable while plastic is not.

Role of recycling

Given that waste paper is an important raw material source for the paper industry, better recycling can lower imports and save the environment by reducing municipal solid waste. Sahni says that only 27 per cent of paper is recycled currently, while it is as high as 70 per cent in European countries such as Germany and Sweden and 50 per cent in the US.

Recycling one tonne of waste paper results in a saving of 70 per cent raw material, 60 per cent coal costs, compared to making paper from wood. Upto 70 per cent of water usage is also saved by recycling. So your raddi wallah may be the true unsung hero in saving trees.

Published on November 12, 2014

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