INDIA’S paper industry is rueing the high cost of existing raw material, its slow depletion and inadequate forest land. For more than 500 units across the country engaged in manufacturing of paper, paperboards and newsprint, the availability of raw material is crucial. The industry is urging that the Parliamentary Standing Committee which is evaluating a multi-stakeholder partnership (MSP) model proposed by the Ministry of Environment & Forests be actively taken up that allows the industry to use degraded land.
“Indian paper industry wants access to degraded lands in a radius of 100-150 km around manufacturing facilities for it to grow pulpable varieties of trees to create sound raw material base,” says Pradeep Dhobale, CEO, ITC Paperboard, who is also general secretary of Indian Paper Manufacturers Association (IPMA). Envisaged as a tripartite agreement between the local community, the state forest departments and the private investor, the multi stakeholder partnership (MSP) model could help provide a green cover over 28 million hectares of degraded land available in India, generate rural employment and act as a source for raw material for wood based industry.
The industry is expecting the paper consumption to double from seven million tonnes per annum by 2015. According to estimates by IPMA, the industry is poised to grow to 13.95 million tonnes by 2015-16.
The industry is a priority sector for foreign collaboration and foreign equity participation up to 100% receives automatic approval by RBI. The industry has actively been promoting agro forestry with private land holders and farmers to meet its needs for raw material. The total acreage under cultivation of pulpable variety of trees has gone up from 25,432 hectares in 2001-02 to 58,281 hectares in 2005-06. However, the gap between supply and demand of paper in India is widening.
“The forest land may not be accessible but the government can allocate degraded land which we can cultivate to fill up the gap in demand and supply. This would also give a chance for the domestic industry to flourish and compete in international markets,” says a spokesperson from Abhishek Industries. The flagship of the Trident Group that is coming up with a 400-tonne-per-day paper plant in Barnala, Punjab says that it is also facing problems due to lack of raw material while the available material is expensive. Currently the total domestic demand for paper is 7.2 million tonne whereas the production is trailing at 6.7 million tonne. It is estimated that the production capacity would rise to 8.5 million tonnes by 2010-11 while the domestic demand would rise to 10 million tonnes.
Industrialists, however, fear that in the absence of a competitive domestic paper industry, large scale imports will follow affecting not only the rural economy but harming small scale industry including local assemblers of note books and paper products. It would directly affect the rural economy and rural unskilled and semi skilled labour. Therefore, the industry is also proposing to establish a permanent green cover on degraded forest lands to ensure constant supply of raw material.