Present Status of The...

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Indian Paper Industry &The Role of Recovered Paper (RP)

The IndustryPresent Status of

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Slides

Installed

Present Status of the Industry

Production

ImportsExports

1312.20

million tonnes

Consumption

0.602.30

13.90

Source IPMA

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‐ +

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Production TrendFuture Projection Of

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Future Projection Of Production Trend

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

5.2 5.4 4.84.3 4.3

• The Growth rate for the Indian Paper Industry as projected by the industry 7.5 – 8% per Annum

Gro

wth

%

• This growth pattern is based on following

trend as circulated by the country’s Central

Bank ( The Reserve Bank of India) and the

Central Statistical Office of the Govt of India:

• A more rational projected growth would work out to 4.87 – 5.4% per Annum.

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Considering an average ball park of @

5.5% per annum,

little above the historical max, the Projected

Production & Consumption for the Indian Paper

Industry are more likely to be :‐

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3


2020-21

2025-26

PROJECTED PRODUCTIONPROJECTED CONSUMPTION

PROJECTED PRODUCTIONPROJECTED CONSUMPTION

16.2317.73

22.5920.69

Million tons

5.5% per annum

@

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Raw Material UsageThe Present Status Of

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The Present Status Of Raw Material Usage

Recovered Paper 6.59

Virgin ( Wood + Bamboo) 5.40

Agro ( Straw + Bagasse) 4.09

Total 16.08

Recovered Paper 5.73

Virgin ( Wood + Bamboo) 3.90

Agro ( Straw + Bagasse) 2.56

Total 12.20

ACTUAL FIBRE USAGE BASIS END PRODUCT BASIS

Million Tons

Million Tons

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85% or 4.59 million tns are sourced indigenously and balance

Virgin Fibre

15% or 0.81 million tns are imported.

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However, in the next 10 year virgin fibre based mills will continue to remain within 1/3rd of India’s total paper production, primarily due to limited availability of forest based raw material, arising out of :

Virgin Fibre

• Growing population, receding forest

• Absence of industrial forestry

• Increased demand for agricultural land

• Higher demand for cash crop

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Agro ResidueGrowth of agro residue based paper production will also remain around the present level due to :

• Environmental reasons

• Limitations in the end product quality

• Higher carrying cost over longer distance

• Alternative rural usage at the point of generation

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5

Therefore , the road for growth for the Indian Paper Industry lies through

Recovered PaperSlides

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The Present

Recovered PaperSlides

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Recovered Paper: The Present

Import3.70 m tons

Indigenous RP2.89 m tons21%Total Paper

Consumption13.9 m tons

Total RP6.59 m tons

Paper industry receiving only

Of RP from total paper consumption

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+5.40 m tons

4.09 m tons

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6

56%

44%

PRESENT RP SOURCING

IMPORT INDIGENOUS

Recovered Paper: The Present

IMPORT 3.70

INDIGENOUS 2.89

TOTAL 6.59

Million Tons

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43%

22%

13%

9%

5%8%

IMPORTS

US MIDDLE EAST EUROPE UK SRILANKA OTHERS

US

1.59 m tons Middle East

0.82 m tons

Europe

0.47 m tonsUK

0.34 m tons

Srilanka

0.17 m tons

Others

0.31 m tons

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Raison D’etreFor Using RP In India• Fibre shortage

PRPR EIRPG

• Fibre quality

• Power constraints

• Improved Paper M/C run ability

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Usage trend PRPR EIRPG

(Import)

• Majority of RP users have

Deinking Plants – hence bulk of

the offtake are Deinking Grades

for the WPP units.

• For Kraft producing units the

focus grades are DS OCC,

followed by NDLK.

• Bleaching Grades, not much in

demand, since higher prices make

it uneconomical for mills requiring

such grades, in terms of their end

products.

Slides

• Grades like SBS ( both printed and

unprinted) PCS (Both printed and

unprinted) Tissue Wastes have limited

and specific requirements.

• Pulp substitute grades, at present, do

not find much favour since Pulp prices

are at 485 – 495 USD level.

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IndigenousHow Sourced

PRPR EIRPG

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72.6%

8.65%

18.68%

INDIGENOUS SOURCES

HOUSEHOLD THROUGH HAWKERS :NEWSPAPERS, MAGAZINES, BOOKSETC.

CONTRACTORS : PRINTERS' WASTE

CONTRACTORS/OFFICERS/EDUCATIONAL INS./ INDUSTRIES ETC :CARTONS, BOXES, EXAM BOOKLETS,OLD RECORDS & FILES

Indigenous – How Sourced Source : ITC/ WOW

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8

Easier Availability

Less inventory holding

Easier transportability

Favourable pricing

Not subject to currency

Fluctuation and foreign Exchange outgo

Known parameters

For Against Weak fibre

Quality limitation vis‐a‐ vis end product

No clear cut standards

Limited availability within a given

distance

Case For & Against Indigenous RP

Indigenous – How Sourced

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Projected RP Requirement for the Indian Paper IndustrySlides

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Projected RP Requirement for the Indian Paper Industry

7.79

10.34

8.11

10.75

0 2 4 6 8 10 12

2020‐21

2025‐26

PROJECTED RP REQUIREMENT

OPTIMISTIC BASE

@5.5%per annum,

Theoretically large potential exists for indigenous Recovered Paper generation

PRPR

Million Tons

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

COPIER WPP (PRECONSUMER)

WPP (POSTCONSUMER)

PACKING (PRECONSUMER)

PACKING (POSTCONSUMER)

NEWS PAPER(PRE

CONSUMER)

NEWS PAPER(POST

CONSUMER)

POTENTIAL FOR RECOVERY OF INDEGENOUS RP

COLLECTED NOT COLLECTED

PRPR

According to IRPMA ‐2011

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• All these, together with alternative usage of RP at the point of

generation limiting indigenous recovery for the paper industry.

HOWEVER LACK OF ......

• Clear cut Waste Management Policy

• Institutional mechanism for collection of RP

• Transport system for such wastes

• Adequate storage space

• Social awareness and education


PRPR

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Potential For Recovery Of Indigenous RP

Despite potential, the limiting factors will prevent recovery from going much beyond 25 – 30% in 2020 and 2025The potential for indigenous RP fibre generation (after considering yield loss at 20%) expected to be pegged at :

3.26

4.52

3.54

5.06

0 1 2 3 4 5 6

2020‐21

2025‐26

EXPECTED INDIGENOUS RP GENERATION

OPTIMISTIC BASE

EIRPGPRPR

Million Tons

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10


0

0

0

11

0 2 4 6 8 10 12

2020‐21

2025‐26

GAP IN RP

OPTIMISTIC BASE

10.75 ‐ 5.06 = 5.69

10.34 ‐ 4.52 = 5.82

8.11 ‐ 3.54 = 4.57

7.79 ‐ 3.26 = 4.53

PROJECTED RP REQUIREMENT

EXPECTED INDIGENOUS RP GENERATION

‐ = GRPGAP IN RP

The GAP in RP supply after generation through indigenous recovery, will work out to:

PRPR EIRPG

Million Tons

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The GAP hovering around


5.00 to 6.00 million tons

needs to be catered through

imports.

PRPR EIRPG

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• Multiple sources


IN FAVOUR OF IMPORTS

PRPR EIRPG • No other way to fill gap

• Quality of fibre superior

• Standard grading

• Continuity of supplySlides

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Potential Sources Comparison Of

PRPR EIRPG

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Comparatives Of Potential Sources

4

US

UKEurope

Middle East

major sources for imports

Comparison Of Potential Sources

PRPR EIRPG

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• Sometime, Indian paper is brought back through recovery from the Middle East.


FEATURES OF SOURCES

PRPR EIRPG

• Absence of large quantity News Grade import from any source.

• Europe has reached optimum generation of 70% and recycling within Eurozone limits exportable quantity.

• UK sterling Pound exchange rate being higher, prices are not competitive.

• Middle East have limited availability, grade wise.Slides

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US stands out as the primary and the largest source of Recovered Paper Supply to India because of :

PRPR EIRPG• Quality of fibre

• Wider variety of grades

• Easier convertibility of currency

• Wider b2b contacts.

Slides

• Sometime bad business practices, at both ends.

BOTTLENECK

• Primarily shipping and freight

• Longer lead time

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ConclusionPRPR EIRPG

4.5US being the largest source of supply

million tns of RP for the Indian Paper industry

With gap of above

Opportunities for RP supplies from the US to India are :‐

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Enormous• With extremely reliable banking system and regulatory mechanism

• Stable democratic set up, based on rule of law

• International language of communication

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The Indian market for RP for US suppliers awaiting full utilization.

Conclusion

PRPR EIRPG

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