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| India's Paper Industry Must Expand To Meet Growing Demand |
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http://www.paper.com.cn
2009-01-17 GLG |
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Implications: India already leads the world (along with China) in the number of daily newspaper readers (180 million). With their ever expanding middle class (i.e.university graduates), growth in all other areas can be expected to grow commensurately.....copybond for the computer printers, envelope paper, thermal imaging paper for sales receipts, trade book paper for textbooks all the way down to common tablet paper. Their paper industry accounts for only 1.6% of the world's production of paper and paperboard. The country must begin to install the newer, bigger, faster paper machines which have been going into China for the past decade. Failure to do so will make them enormous importers of all kinds of paper and paperboard.
Analysis: The per capita paper consumption in 2007 was 7.5kg. By December 2008 it had reached 8.3 kg. Multiplying this 0.8kg/person by 1.1 billion people produces a huge tonnage increase. The Indian Paper Manufacturers Association (IPMA) estimates their compound annual growth rate will be 7-8%. The nation's installed paper industry has a capacity of 9 million tons today and is expected to grow to 11.2 million tons/year by 2010. This implies that a number of new paper machines from producers like Voith in Germany or Botnia in Finland are already on order or perhaps even now being installed. These machines will be technologically advanced and highly specialized...some producing Uncoated Free Sheet paper, some Coated Free Sheet, some tissue and towelling, some packaging board (SBS) grades, some newsprint and some heavier weight container board grades like liner, medium, testliner and Kraft papers for sacks, bags, tapes etc. India's pulp supply is extremely limited because of the meager land available to plant large plantations of acacia and eucalyptus. This means the world will have to plan to ship millions of tons/year of virgin papermaking pulps as well as recycled OCC, ONP and SOP grades. The world's market pulp producers should be more confident of the near term future as they see India coming up along side China as a major market. Note: China imported 8.5 million mt of virgin market pulp last year.....with India far behind that figure but planning to rapidly increase. This growth in India's paper industry will prove to be a boon to the makers of paper and board machines, market pulp producers, brokers who sell OCC, ONP and SOP and, lastly, container shipping companies as well as break bulk shipping lines. This latter group is already building supersized ships having a capacity to carry 45,000mt of pulp....compared to today's 38,000mt large ships. India's paper industry is targeting capital expenditure of over $2.6 billion in the next 2-3 years. This is a welcome contrast to North America's and Western Europe prediction of continued consolidation, contraction and milll closures. |
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