Global Paper Industry

o The global paper industry churns out around 310 million tonnes, with North America and Scandinavian countries such as Finland and Norway accounting for 55 per cent of the output. Asia accounts for a fourth of the world production

o While the European and American output is largely based on soft pulp and is of better quality, the Asian production is a mix of hard wood pulp, soft wood pulp and other agri-residues

o Writing and printing paper account for 33 per cent, industrial paper for 61 per cent and newsprint for around 6 per cent of the market

o The dominant theme in the global paper industry is one of consolidation. The number of 'big' players is shrinking, leading to a concentration of capacity in the hands of fewer companies

o Fresh capacity creation has been marginal and this trend is expected to continue over the next 3-4 years

o 15th largest in the world

o Provides employment to 1.3 mn people

o The domestic per capita consumption is 6 kg compared to the South Asia and world average of 11 kgs and 53 kgs respectively. In the US it is 312 kg while in Western Europe It is 160 kg

o In 2000, the paper consumption in India amounted to some 4.2 million tons, by 2010 it will have reached 8 million tons

Indian paper industry

o The demand for paper in India is rising by nearly 7 per cent per annum

o Total production of paper in 2003-04 is 5.26 mn tons

o In 2003-04 India imported approximately 500,000 tonnes of paper.

o Newsprint capacity in India is estimated at 1.12 mn tons - a volume growth of 5.47% CAGR over the last 3 years

o Paper exports have risen at a CAGR of 14% pa from 105,000 tons in FY00 to 176,000 tons in FY04

o At present, there are 540 paper mills in India

o The Indian paper industry has an installed capacity of 6.7 mn tons.

o Average capacity utilization of major players has been around 99% in FY04

o No significant new greenfield capacity has been added in the paper industry in the last few years

o Capacity expansions of over 600,000 tons have been announced by the 7 large players in the sector