Opportunities galore for Indian entrepreneurs in paper industry
SEP-2012 – ndustry in India is the 15th largest paper industry in the world. The industry provides employment to nearly 1.5 million people and contributes approximately Rs. 25 billion to the government’s funds. The Indian government regards the paper industry as one of the 35 high priority industries of the country. Given these estimates, this industry seems to provide some innovative opportunities for young Indian entrepreneurs. Currently, according to NIIR Project Consultancy Services (NPCS), India’s paper industry is worth Rs. 225 billion. It accounts for about 1.6% of the world’s production of paper and paperboard. NPCS believes that, in recent times, India’s paper industry has had an annual growth rate of 6% per year. According to NPCS, in the near future, this growth rate will go up to 10% because of huge spurt in demand for writing and printing paper. Currently, the basic demand for paper comes from products like, tissue paper, tea bags, filter paper, light weight online coated paper, and medical grade paper etc. The demand for these paper products is expected to increase in the near future. Also, according to NPCS, given the Government’s emphasis on education and alternative uses of paper, the domestic demand for paper is set to surpass the supply by 2015. These growth possibilities are likely to provide several opportunities for budding entrepreneurs in this industry. Furthermore, according to iloveindia.com, the Indian paper industry has been de-licensed under the Industries (Development & Regulation) Act, 1951 with effect from 17th July, 1997. Thus, interested entrepreneurs are now required to file an Industrial Entrepreneurs’ Memorandum (IEM) with the Secretariat for Industrial Assistance (SIA) for setting up a new paper unit or substantial expansion of the existing unit in permissible locations. Another important aspect of the paper business is that now Foreign Direct Investment (FDI) of up to 100% is allowed on automatic route on all activities except those requiring industrial licenses with prior governmental approval in the paper industry. The growth potential of the paper industry is visible with the rapid increase in the number of paper mills processing paper. According to iloveindia.com, closer to Indian independence, there were 17 paper mills in India, and today there are about 515 mills engaged in the manufacture of paper and paperboards and newsprint in India. These mills have been categorized into large-scale and small-scale industries depending upon their production capacity. Those mills that have capacity above 24,000 tons per annum are designated as large-scale paper industries. Overall, currently India is self-sufficient in the manufacture of most varieties of paper and paperboards. Some existing entrepreneurs in the paper business believe that, given the current state of the Indian paper business, the next big move needs to be in making the industry greener. In an interview at the Papertech 2012 conference, N Gopal Ratnam, CMD, Seshasayee Paper & Boards, said that “the country’s paper and pulp industry needs to lay special thrust on green initiatives to dismiss the perception that it consumes plenty of natural resources and pollutes the surroundings.” According to Ratnam, India is the 11th largest producer and consumer of paper in the world and it is imperative for the country to adopt green standards and conserve natural resources to ensure profitability. Also, an interview by a publication with KS Kasi Viswanathan, Chairman, PaperTech 2012 revealed that conservation of energy, environment, and water conservation are some of the other key objectives of the Indian paper industry. Thus, entrepreneurs wanting to target this industry could pay special attention to innovations in these problem areas that confront this industry. Since 2004, one young entrepreneur, Vijendra Shekhawat, Jaipur, India, seems to have shown an innovative solution to making paper production greener: This Jaipur entrepreneur has started making paper from an elephant’s dung. Today, Haathi Chhap, the brand of paper Shekhawat makes from recycled elephant dung, is estimated to sell at 40 outlets within the country and even exported, earning total revenues of Rs. 35 lakh in 2011-12. There are Haathi Chaap cards, notebooks, bags, photo albums and numerous knick-knacks. In recent interview given to a publication, Shekahwat says that “the elephant’s gastrointestinal tract cannot digest fibers well and thus its dung has the potential to form the pulp needed to make paper.” According to Shekhawat, collecting the elephant’s dung in Jaipur was itself a difficult proposition, as few workers were willing to sully their hands doing so. It had then to be disinfected and experiments carried out to see if it would yield the right quality of pulp for making paper. Shekhawat spent months on his experiments till he perfected the method he now uses. According to a publication, Shekhawat still personally collects the dung every morning. And, to improve its quality he supplies the owners of the elephants he collects from with green fodder for the elephant’s diet: Every 1,000 kg of dung yields around 150 kg of pulp. Given these recent innovative ventures in the Indian paper industry as well as the growth potential this industry has to offer in the near future, the industry seems to provide an ideal place for young and budding entrepreneurs to get their hands dirty.
Saturday, March 2, 2013