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Coal supply crisis: Pulp and paper industry seeks PMO’s intervention

Our Bureau | Updated on: Apr 19, 2022
Paper industry in India has invested in captive power plants to reduce energy cost (file image)

Paper industry in India has invested in captive power plants to reduce energy cost (file image) | Photo Credit: hxdyl

Production hit at several paper mills, says IPMA

Indian Paper Manufacturers Association (IPMA) has said availability of coal for the captive power plants of the pulp and paper industry remains precarious, severely disrupting production at several mills while others are on the verge of shutting down. 

In a message to the Prime Minister’s Office, the IPMA said the industry requests priority allocation of coal and railway rakes for the captive power plants as paper and paperboard touch all aspects of life and its production is vital for education, packaging and several other sectors of the economy.

Continuous process industry

Paper industry, being a continuous process one and with energy forming a significant part of the production cost, has made huge investments in setting up captive power plants. This has also resulted in lower demand on the country’s power grid.

The growing cost of raw material and fuel is causing substantial increase in production costs. Simultaneously, lower demand due to the Covid pandemic has severely impacted the industry.

For almost a year now, Coal India and subsidiaries Singareni Collieries, Eastern Coalfields, Mahanadi Coalfields and Central Coalfields have prioritised coal supplies to thermal power plants at the cost of non-power and/or non-regulated sectors. Even railway rakes have been allocated on priority to the power sector, compounding the paper industry’s problems, IPMA stated.

Industry fears closure

The industry fears closure of some paper mills if coal supplies are not restored, resulting in a shortage of writing, printing and packaging paper with implications for the FMCG, food and pharma sectors. Schools and colleges have reopened and there is increasing requirement for notebooks and books. Newsprint is crucial for printing newspapers as well.

IPMA has therefore urged the Government to consider priority allocation of both coal and railway rakes to the captive power plants of the pulp and paper industry at par with thermal power plants, and restoration of coal supply from designated mines at pre-June 2021 levels. 

Published on April 19, 2022
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