Paper

The year 2017 was a record year for the import of pulp used for papermaking in Asia. China has led this growth over the past ten years and if its consumption growth for lumber and pulp were to continue, it would consume the entire world’s forest products in a few years, according to industry commentators. Although Chinese president Xi Jinping has tempered the unlimited growth of the country’s construction industry, its paper industry continues to demand pulp as do Japan and India.

Pulp prices have hardened recently with major pulp producers shutting down for annual maintenance simultaneously with China banning the import of and use of ‘mixed paper’ or paper waste. Hardwood pulp prices have hardened and hit a 7-year high in the US$ 770 per ton range while softwood pulp is in the US$ 660 per ton range. This represents an increase of more than US$ 240 a ton in the last six months.

India, which suffers from a huge fiber shortage, still produces some pulp from bamboo, eucalyptus and other types of trees, which is suitable when used together with waste paper for manufacturing writing and graphic papers. With the import customs duty at nil since May 2012, the industry currently imports about 1.25 million tons of pulp for paper making.

This is in addition to considerable (more than 3 million tons) newsprint, paper and paper board used for high quality packaging imported at various customs rates. Leading industry associations such as Assocham have argued for the imposition of a 10% customs duty on pulp which would, according to it, encourage the forestry farming industry in the country as well as the paper industry. Assocham estimates the shortfall of domestic pulp could be met with harvesting approximately 160 million trees annually.

Undoubtedly, the currently high price of pulp imports will impact the manufacture of the buoyant writing, printing paper and paperboards. It will especially put further price pressure on the carton market, which uses imported pulp to produce high quality paperboards that are made from imported virgin pulp. Together with increases in fuel costs and chemicals, printers, publishers, print buyers and packaging converters should be prepared for another round of paper price increases in next few months.

Packaging South Asia — resilient, growing and impactful — daily, monthly — always responsive

The multi-channel B2B in print and digital 17-year-old platform matches the industry’s growth trajectory. The Indian, South Asian, Southeast Asian, and Middle East packaging industries are looking beyond the resilience of the past three years. They are resuming capacity expansion and diversification, with high technology and automation in new plants and projects.

As we present our 2024 publishing plan, India’s real GDP growth for the financial year ending 31 March 2024 will exceed 6%. The packaging industry growth will match the GDP growth in volume terms and surpass it by at least 3% in terms of nominal growth allowing for price inflation in energy, raw materials, consumables, and capital equipment.

The capacity for flexible film manufacturing in India increased by 45% over the past four years. With orders in place, we expect another 20% capacity addition in 2024 and 2025. Capacities in monocartons, corrugation, aseptic liquid packaging, and labels are growing similarly. As the consumption story returns over the next six months, we expect demand to return and exceed the growth trajectory of previous years. The numbers are positive for most of the economies in the region – and as shown by our analytics, our platform increasingly reaches and influences these.

For responsible and sustainable packaging, with its attendant regulations and compliances, there is significant headroom to grow in India and the region. Our coverage includes the entire packaging supply chain – from concept to shelf and to waste collection, sorting, and recycling.

We target brand owners, product managers, raw material suppliers, packaging designers and converters, and recyclers. This is a large and complex canvas – the only thing that can work is your agile thinking and innovation together with our continuous learning and persistence.

The coming year looks to be an up year in this region, and this is the right time to plan your participation and marketing communication – in our rich and highly targeted business platform with human resources on the ground. Share your thoughts and plans to inspire and mobilize our editorial and advertising teams!

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– Naresh Khanna (25 October 2023)

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