India is currently one of the top 5 largest producers globally in the pulp and paper industry. With a CAGR of roughly 8% from 2018-2022, India has experienced some impressive growth over the last several years.
However, within the last six months, many kraft paper mills in western and northern India have ceased operations amid export challenges and excess capacity. Questions many are asking include:
Weak global demand for commodities, especially in fellow Asian countries, has resulted in a substantial drop in demand for kraft and recycled board in India. In turn, prices have experienced a downward trajectory as exports for these grades reduced drastically. This unforeseen demand shift has left numerous mills grappling with an excessive amount of capacity.
To rectify the circumstance, some of the medium- to small-scale kraft mills have either opted or been compelled to limit their operations to specific days each month. The end-goal is to address the surplus in the market and recalibrate pricing dynamics.
Despite increased mill closure due to lack of demand in its market, what other trends are we seeing in India?
India’s Pulp and Paper Capacity by Major Grade
Source: FisherSolve
All integrated writing and printing mills have achieved remarkable success in terms of both sales volume and profitability. Furthermore, the recently unveiled educational policy by the Indian government is expected to foster additional growth in this area. This is primarily driven by the printing of new sets of textbooks and study materials.
Given India’s significant influence in the pulp and paper industry, it’s crucial to monitor developments in its market as it could have global implications.
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For deeper insight into the ongoing situation in India and effective readiness strategies, contact us today.