Paper demand in India expected to grow 53% by 2020, to estimated 20 million tonnes/year from 13 million tonnes/year currently, due to increasing consumerism, modern retailing, rising literacy, greater use of documents, say JK Paper

Debra Garcia

LOS ANGELES , April 21, 2014 (Industry Intelligence Inc.) – Over the next six years, demand for paper in India is expected to increase by 53% to an estimated 20 million tonnes/year in 2020 from the current 13 million tonnes/year, reported the Business Standard on April 19.

The forecast came from Harsh Pati Singhania, vice chairman and managing director of JK Paper Ltd.

It is based on India’s growing consumerism, the push into modern retailing, rising literacy and an increasing use of documents, which are expected to keep the market for printing and writing papers strong, the Business Standard reported.

India’s low rate of per capita paper consumption--at 9 kilograms versus the global average of 58kg--gives India a great potential for growth, said Yogesh Agarwal, managing director and CEO of Ballarpur Industries Ltd.

Despite the spread of digital media competing with paper use in other parts of the globe, this trend will be slow in India’s rural areas. Paper is established and encouraged, Agarwal said.

The packaging side of the paper industry also continues to grow, despite challenges, said Agarwal, reported the Business Standard.

The paper industry in India is poised for growth after having invested a total of about 200 billion rupees (US$3.31 billion) over the past few years to increase production capacity, upgrade technology, and make acquisitions, Agarwal said.

Debt levels for India’s paper industry have spiked, but cost benefits will be gained from these investments, the Business Standard reported.

In 2014-2015, an expected lower level of capital expenditure will result in India’s paper companies reporting higher net incomes and free cash flows, according to the India Ratings report.

With the rise in paper demand, paper capacity expansions are being absorbed. In addition, costs are starting to favor paper producers. Pulp prices have softened and wood costs have improved, said Singhania.

The paper sector in India continues to seek further expansion but that will be limited by financial results, said Singhania, reported the Business Standard.

The primary source of this article is the Business Standard, New Delhi and Mumbai, India, on April 19, 2014. Click here to view full version of primary source's original article.

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