This report profiles the paper and paper products industry in India, reviewing market trends and outlook and providing a snapshot of the leading companies in the sector, among them Ballarpur Industries, Tamil Nadu Newsprint and Paper, and Rainbow Papers.

While demand for paper remained subdued in the developed world during 2009–12, the Indian paper and paper products sector witnessed rapid growth. The sector saw consistent growth in consumption, in turn increasing production. This trend motivated the paper manufacturers in the country to move forward with capacity expansion and growth plans.

Following rapid consumption growth during 2008–2012, the Indian paper industry experienced a lull in FY13; for that matter, most sectors of the Indian economy experienced a slowdown during this period. The sector witnessed a marginal recovery in FY14. High inflation was a deterrent for consumption. Furthermore, rising debt levels forced the players in the industry to rethink their growth strategy. However, the long-term outlook for the Indian paper sector is stable because of existing low per capita paper consumption, rising literacy rate, and a young population. Government support and technology upgrades bode well for the sector.

Key Points:

• This report provides key statistics and financial highlights for the following leading firms in sector: Ballarpur Industries Limited (BILT), Tamil Nadu Newsprint and Papers Limited (TNNPL), and Rainbow Papers Limited.

• During 2009–2013, the value of paper and paper products production of Indian companies grew at a CAGR of 11%. After recording a peak y/y increase of 34.5% in FY11, the sector saw subdued growth in the last two years.

• India experienced rapid growth in annual consumption of paper and paper products during 2006–2011, which grew at a CAGR of 9.3%, much higher than the average global growth rate of around 3%. However, after peaking in FY11, the demand decelerated during FY12 and FY13.

• India was the 15th-largest consumer of paper as of FY13. However, per capita consumption of paper in India was extremely low compared to other developed countries. India consumed less than 2% of the world’s paper production as of FY13, a low figure for a country with 15% of the world’s population.

• The paper and paper products sector constitutes about 1% of industrial output represented by the Index of Industrial Production and grew at a CAGR of 4.2% during fiscal years 2007–2012. The paper sector was affected by the economic slowdown and recorded a growth of 0.5% in FY13 and 1% in 1HFY14, which was much lower than its historic growth rates.