Although paper demand in India is growing, paper companies have been depressed in the past couple of years, as seen in the FY 23-24 financial data. In the coated publication papers, local suppliers are uncompetitive since there is limited capacity. Imports of coated paper continue from Asian mills, despite the recent Rupee devaluation against the dollar.
In most uncoated Indian paper grades there is ample capacity and they are competitive. However, some specialty uncoated book papers must be imported because overseas publishers test these to establish their characteristics and that they are produced using responsible inputs. However, the book printing market is slow this year, with smaller print runs and delays in what is described as the season.
Nevertheless, book printers remain resilient with several brand new 8-color perfectors being installed in the current financial year as well as web-fed inkjet presses starting to impact the offset monochrome printing market.
A decadal review of the combined figures of 23 paper manufacturers
IPPStar’s (www.ippstar.org) comprehensive study of the financial performance of 23 Indian paper companies over the past decade, covers the period from 2013-14 to 2023-24. The analysis reveals significant trends in total revenue, cost of material consumed, employee benefit expenses, and their combined profitability.
The twenty-three paper companies for which we have compiled the financial data for ten years are: Andhra Paper, Astron Paper & Board Mill, Emami Paper Mills, Ganga Papers India, Genus Paper & Boards, JK Paper, Kuantum Papers, Malu Paper Mills, Mohit Paper Mills, NR Agarwal Industries, Orient Paper and Industries, Pakka, Pudumjee Paper Products, Ruchira Papers, Sangal Papers, Satia Industries, Seshasayee Paper and Boards, Shree Ajit Pulp and Paper, Shree Rama Newsprint, South India Paper Mills, Star Paper Mills, Tamil Nadu Newsprint And Papers, and West Coast Paper Mills.
These paper companies are not a structured sample but are based on the availability of financial data, and could be said to be a random and representative sample. It includes companies that manufacture newsprint, publication papers, paperboard for packaging, and liner for corrugation.
Revenues over ten years
The total combined revenues of these 23 paper companies exhibited substantial growth in ten years, starting at Rs 14,068.07 crore in FY 2013-14 and reaching a peak of Rs 32,198.49 crore in FY2022-23, before experiencing a 9.3% decline to Rs 29,202.58 crore in 2023-24. Over the decade, revenue grew by 117%, more than doubling in value.
The cost of materials consumed followed a similar trend. It increased from Rs 6,790.62 crore in 2013-14 to ₹15,151.76 crore in 2022-23 but saw a slight decline of 5.3% to Rs 14,347.38 crore in 2023-24. This alignment between revenue and material costs suggests effective resource management and a response to market demand.
Employee benefit expenses consistently grew throughout the decade, rising from Rs 925.68 crore in 2013-14 to Rs 2,131.68 crore in 2023-24. This steady increase reflects a robust 130% decadal growth rate, indicative of the industry’s focus on workforce development and improved employee compensation as well as general inflationary trends.
Profitability
The combined profitability of our select sample demonstrated considerable volatility over the ten-year period which of course includes the pandemic. Starting at Rs 154.46 crore in FY 2013-14, it surged to Rs 3,452.63 crore in 2022-23 before settling at Rs 3,054.69 crore in 2023-24. Over the decade, profitability soared by an extraordinary 1877.66%, marking a 12-fold increase from the initial value.
This decade-long data highlights the substantial growth and resilience of India’s paper industry while emphasizing the variability in profitability as an area for strategic focus. The constraints of fiber, poor recovery of waste paper at 40%, and environmental regulations remain. However, on the whole, the industry has been able to sustain growth with a combination of social forestry and pulp imports.
The paper industry in its published data says that the entire turnover of the Indian paper companies is Rs 80,000 crore (approximately US$ 9.4 billion), produced by the 550 mills that are operational out of a total of 900 paper mills. This would imply that our select sample of 23 companies representing approximately 4.2% of the functioning paper companies and their mills, produced a substantial amount or about 40% of the paper in the country in terms of revenue in the 2023-2024 financial year.
