Market Reports

Paper and Packaging Industry in India

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Overview: India’s Paper and Packaging Industry

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Quick Facts: Paper and Packaging Industry of India

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Paper Mill Clusters in India

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Production & Trade: Paper and Pulp Products

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Packaging Materials Demand Overview

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Megatrends Impacting Paper and Packaging Industry

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Prominent Investments in Paper and Packaging Industry

Overview: India’s Paper and Packaging Industry

Robust Demand

  • Adoption of advanced packaging solutions is increasing in India with innovations in digital printing, smart packaging, and eco-friendly materials driving demand for packaging solutions. It is anticipated that packaging industry will grow at a CAGR of 23% between 2024-2030.
  • Growth of e-commerce platforms in India is creating new opportunities for packaging, particularly in terms of logistics and protective packaging solutions.

Attractive Opportunities

  • FDI inflows in paper and Pulp (including paper products) during April 2000 to December 2023 was INR 14,000 crores.
  • SIG, a Swiss-based packaging company, laid the foundation of the first aseptic carton packs in Ahmedabad in 2023 and plans to invent a sum of INR 880 crores throughout 2023-2025.

Policy Support

  • Government plans to adopt several initiatives that focus on sustainable manufacturing methods, minimizing plastic packaging, and adopting sustainable materials for the packaging industry.
  • Incentives and subsidies for setting up paper mills and packaging units, especially in economically backward regions.

Competitive Advantage

  • Sustainability leaders like ITC Limited, JK Paper Limited, TNPL, Huhtamaki PPL Limited, Emami Paper Mills, West Coast Paper Mills Limited, and BILT are driving change. With their commitment to community involvement, renewable energy investments, ethical sourcing, and circular economy concepts, these businesses represent a wide range of sustainability initiatives that will help the sector become more environmentally friendly in the future.

Quick Facts: Paper and Packaging Industry of India

  • India’s paper industry accounts for about 5% of the world’s production of paper.
  • Indian paper industry ranks 15th in the world.
  • Estimated turnover of the industry is over INR 80,000 crores.
  • Per capita paper consumption in India, at around 15–16 kg, is way behind the global average of 57 kg.
  • Industry provides direct employment to 5,00,000 people, and indirectly to around 15,00,000 people.
  • Imports of paper, paperboard, and newsprint have grown from 1,785 thousand tons in 2010–11 to 2,593.6 kilo tons in FY23.
  • Export of paper, paperboard, and newsprint stood at 1,560.2 kilo tons in FY 23.
  • Packaging is currently the 5th largest sector of the Indian economy.
  • Indian packaging industry contributes about 4% of the global packaging industry.
  • India has 22,000 packaging units, of which 85% are SMEs.
  • Packaging equipment including filling machines, sealing machines, labeling machines, and wrapping machines, is expected to grow at a CAGR of approximately 7-9% in the future, impacting packaging material production on high scale.
  • According to current industry data, India now has 900 paper mills.
  • As of now, around 553 mills are operational with a total operating capacity of around 25.6 million metric tons.
  • Wood as a raw material has 21% share in total paper production in India.
  • Over 90% of wood demand was met through industry-driven agro/farm forestry (1.2 million hectares).
  • Current demand for pulpable wood by the paper industry is about 11 million tons per annum (TPA) while domestic availability is 9 million TPA.
  • Wastepaper collection/recovery rate in the country is around 40% and largely dominated by the unorganized sector.
  • Capacity utilization rate of mills for paper and paperboard production stood at approximately 97% in the FY 2023-2024.
  • Indian paper industry remains largely a fragmented sector. It consists of small, medium, and large paper mills, having production ranging from 500 to 1,000 tons per day.

Paper Mills Clusters in India

  • Gujarat leads the Indian paper industry with the highest (Approximately 150) number of paper mills. Ahmedabad, Surat, Vadodara, and Rajkot are major production base cities.
  • Maharashtra is another prominent state in the paper and packaging sector, hosting numerous paper mills. It is home to more than 100 paper mills. Mumbai, Pune, Nagpur, and Aurangabad are dominating overall production in the state, with about 2 million tons per year in production capacity.
  • Uttar Pradesh has a strong presence in the paper industry due to its large population base and industrial infrastructure. Cities like Lucknow and Kanpur are known for their paper manufacturing capabilities. More than 70 paper mills have a presence in Uttar Pradesh.

Production & Trade: Paper and Pulp Products

  • Writing and Printing Paper
  • Paperboard/Packaging Paper
  • Newsprint
  • Specialty Paper and Others

Production & Trade: Paper and Pulp Products

  • Most paper mills have been in existence for a long time and hence, present technologies fall in a wide spectrum, ranging from the oldest to the most modern.
  • The mills use a range of raw materials, viz. wood, bamboo, recovered fiber, bagasse, wheat straw, etc.
  • The geographical spread of the industry, as well as the market, is mainly responsible for the regional balance of production and consumption.
  • India has substantial forest resources, and the paper industry often sources wood pulp from sustainable forestry practices. However, concerns about deforestation and environmental impact have led to efforts to promote responsible sourcing and plantations.
  • Recycled paper, including old newspapers, magazines, and cardboard, is another crucial raw material. Recycling helps to reduce the strain on natural resources and supports sustainable production practices.
  • India’s total paper production was estimated to be around 25 million tons per year.
  • India exports a significant portion of its paper production to various countries, particularly in Asia, Africa, and the Middle East.
  • As the country moves towards sustainable development goals, the industry is expected to adopt more eco-friendly practices while meeting the growing demand for paper products both domestically and internationally

Packaging Materials Demand Overview

  • Two segments make up the packaging industry: flexible and rigid.
  • The rigid segment accounts for 36% of India’s total packaging, and the flexible segment accounts for 64% of the total packaging.
  • Packaging materials play a crucial role across various industries in India, facilitating product protection, transportation, and marketing.
  • Food and beverage are the largest consumer of packaging materials due to perishability and hygiene concerns. Flexible packaging materials dominate due to their cost-effectiveness and versatility.
  • E-commerce and retail are rapidly growing sectors, driving demand for diverse packaging solutions. E-commerce packaging alone accounts for a significant portion of overall packaging material consumption.
  • These points underscore the intricate interplay of packaging materials across diverse industries in India, influenced by technological advancements, regulatory frameworks, consumer trends, and global economic dynamics. The packaging sector continues to evolve, driven by innovation and sustainability imperatives.

Megatrends Impacting Paper and Packaging Industry

Sustainability and Eco-friendly Practices

  • Increasing consumer awareness and regulatory pressure drive the adoption of sustainable forestry practices and eco-friendly manufacturing processes.
  • Emphasis on recycling and waste reduction to minimize environmental impact and maximize resource efficiency.
Digitalization and Technology Advancement
  • Adoption of digital technologies such as automation, artificial intelligence, and data analytics to improve operational efficiency, reduce costs, and enhance product quality.
  • Integration of advanced manufacturing techniques for paper production to meet stringent quality standards and market demands.
Circular Economy Initiatives
  • Emphasis on reducing waste through the adoption of circular economy principles such as reuse, recycling, and repurposing.
  • Manufacturers are increasingly responsible for the end-of-life management of their products, driving innovation in sustainable packaging solutions.
E-commerce Boom and Changing Consumer Behavior
  • Increased online shopping necessitates innovative packaging solutions that protect goods during transit while minimizing material use.
  • The shift towards convenient, sustainable, and aesthetically appealing packaging influences product design and material choices.
Supply Chain Resilience and Globalization
  • Focus on building resilient supply chains to mitigate disruptions and ensure continuous production.
  • Participation in global markets requires compliance with international standards and adaptation to global trends in packaging.

Prominent Investments in Paper & Packaging Industry

  • In May 2024, Singapore’s APRIL group, one of the largest producers of paper, pulp, and fiber producers, acquired a majority stake in Origami, India’s leading consumer tissue products company. Origami manufactures a wide range of products including facial tissues, hand towels, paper napkins, and many more products.
  • In May 2024, Andhra Paper Limited, a leading manufacturer of integrated paper and pulp in India, signed an agreement worth ~INR 125 crores with Swedish supplier Valmet AB, for the supply and commissioning of a tissue paper production line. With a daily maximum capacity of 129 tons, the machine will generate various grades of tissue paper. Earlier in February, the Board of Directors of APL had approved the installation of a state-of-the-art tissue paper machine at its Kadiyam, East Godavari, Andhra Pradesh, manufacturing facility. The machine will require a capital investment of INR 270 crore and have a daily production capacity of 100 tons.
  • In January 2024, Rigid plastic packaging solutions provider Mold-Tek Packaging Ltd (MTPL) opened three manufacturing facilities in Cheyyar (Tamil Nadu), Sultanpur (Telangana), and Panipat (Haryana). The facilities will increase the business’ capacity to 5,500 tons annually, bringing the overall capacity to 54,000 tons annually by the financial year 2024–2025. The company invested about ₹100 crore in these units.
  • In Dec 2023, Investcorp, an investment firm, announced that it will invest ₹340 crores in Canpac Trends, a company that offers paper-based packaging solutions. With this investment, Canpac will be able to increase its production footprint throughout all major manufacturing hubs of the country.
  • In Dec 2023, packaging solutions company Multivac opened its new production and sales facility in the industrial area of Ghiloth, 120km southwest of Delhi, India. The factory was built in less than two years. The site’s 5,000 square meter production area will initially assemble small fully automatic tray sealers and compact thermoforming packaging machines.
  • In Oct 2023, Manipal Utility Packaging Solutions Private Limited (MUPSPL) was acquired by JK Paper for INR 90 crores. MUPSPL is a packaging product manufacturer with four manufacturing facilities nationwide that produce folding cartons, corrugated boxes, and labels. In FY 23, the company’s sales were 147.7 crores.
  • In June 2023, Asia Pulp & Paper (APP) announced the plan for the building of a paper manufacturing plant in the Raigad district of Maharashtra. The factory will be able to produce 1.2 million MT of paper products, including packaging board, tissue, and printing paper, at the Dherand village location. Asia Pulp & Paper plans to start this plant by 2025 to create packaging boards and tissue.

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