Paper industry wants industrial plantation policy

With burgeoning demand for paper products and an increasingly severe shortage of raw materials at mills, manufacturers have again asked for a comprehensive industrial plantation policy. 

Currently, most paper mills source raw material in the form of trees and plants from plantations owned by farmers, since regulations don’t allow industry ownership.

On Wednesday, minister of state for commerce and industry C R Choudhary suggested the industry increasing its rate of recycling across categories. Choudhary was speaking at Paperex 2017, the world’s largest exhibition for paper, paper products and related equipment. Recycling in India is 40-50 per cent; it is over 85 per cent in Japan, senior industry sources said.

“Today, the model of large players is farm forestry. We have partnered with farmers across Odisha, Andhra Pradesh, Gujarat and Maharashtra but with demand continuously rising, availability of wood is the single biggest problem,” Harsh Pati Singhania, vice-chairman and managing director of JK Paper, told Business Standard. He said pressure on the industry was set to rise, with the average compounded annual growth rate pegged at six to seven per cent. The corresponding figure for specific paper products such as boards is between 10 and 15 per cent.

Last year, the environment ministry had proposed allowing private industry to use land designated as ‘degraded scrubland’ for plantation. However, the sensitive nature of allowing private firms to take control of farmland meant the proposal lost steam.

The country’s forest cover, according to the 2015 Forest Status Report, increased by 0.378 million hectares in comparison with the 2013 report. Forest and tree cover is 79.42 mn ha or 24.2 per cent of geographical area, much above the 20 per cent estimate at the start of this century. This is, however, way below the policy target of 33 per cent.

“We have yet again submitted a proposal to the environment ministry but have heard nothing so far. I clarify that we do not seek ownership of the land but are willing to partner with forest development authorities and buy back the produce at agreed rates,” Saurabh Bangar, president of the Indian Paper Manufacturers Association, told Business Standard.

So as not to let growing levels of forest degradation bring down India’s chances of creating an additional 2.5 to 3 billion tonnes of carbon sink through forestation by 2030, the ministry is again studying the proposal, a senior official said. Per capita consumption of paper in the country is 9.8 kg a year, compared to 350 kg in America. 

The global average is 58 kg. Under pressure to source inputs, manufacturers have increasingly resorted to importing pulp and other materials from abroad, mainly Asia. 

With escalation in cost on the production side, the plan by Indian companies to enter the export market has been pushed back, a senior official from Seshasayee Paper and Boards told Business Standard. Exports are a small share of Indian firms’ business operations.