The Indian paper industry has seen strong market growth again after a temporary lull. A study by ICRA forecasts sales in the overall paper industry increasing 6-8% per annum, while sales in the Indian print media industry increased by 8.5% in 2013. According to Indian Paper Manufacturers’ Association (IPMA), the demand for paper and board products as well as newsprint will increase from 13 million to 20 million tons by 2020 – and again double to 40 million tons by 2030. This echoes the pulp and paper working group of the Planning Commission who forecast demand in 2026/27 of at least 25 million tons. Thus paper industry in India is on the growth trajectory and is expected to touch 8% GDP in the coming years.
The domestic market is driven by the print media, as readership is increasing in tandem with literacy. Moreover, household incomes and the general consumption are growing and educational expenditure by private institutions and the government are also giving the industry a boost.
The annual per capita consumption of paper increased 2008-2012 from 7 kg to 12 kg, but this is still well below China (42 kg), and the United States (312 kg). Consumption for newsprint reached an estimated 2.4 million tons in 2013/14. According to CMIE, the production of local companies with an annual capacity of more than 24,000 tons was 5% higher than previous years. According to the Indian Trade Statistics, net imports increased by 11% to 1.4 million tons meaning India imported nearly 60% of its newsprint demand.
The Internet does not pose the same serious threat to print media that it does in other countries because while literacy and reading is increasing rapidly, the internet industry has limited reach and this is estimated to continue for the next couple of years. Only about 15 million households had a fixed broadband connection in mid-2014 and while internet usage via mobile devices is spreading rapidly there is a lot of investment required in infrastructure to make internet access a serious competitor to printed news in the short term. It will come (nationally, there are now more than 50 million mobile broadband connections), but it will take time.
Production is scattered all over the country with the biggest paper mills in the states of Andhra Pradesh, Gujarat, Madhya Pradesh, Maharashtra, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal. In recent years foreign companies have engaged more, e.g. the US company International Paper (IP) acquired a majority stake in the Indian Andhra Pradesh Paper Mills (APPM) in 2011; and American MeadWestvaco (MWV) took over the company Ruby Macon in 2012. The Government of India has relaxed the rules and regulations of foreign direct investment (FDI) and delicensed the paper industry to encourage foreign companies to enter the Indian market.
Currently there are 3,000 printing companies with around 250,000 printing presses installed, but reliable statistics are not available for the highly fragmented Indian publishing industry. There are estimated to be around 19,000 book and newspaper publishers and the Centre for Monitoring Indian Economy (CMIE), report that the large Indian newspaper publishing houses (with more than 50 titles) reported 161 billion INR (USD 25 million) in 2010-11 (last available figure). Top-selling publishers are Bennett, Coleman & Co., DB Corp., HT Media, Jagran Prakashan, Deccan Chronicle Holdings and Kasturi & Sons.
FDI has been permitted for facsimile editions of foreign newspapers and news magazines since early 2009, with a precondition to establish an Indian subsidiary which is then allowed to print and sell foreign print publications in India. Foreign publishers have increasingly become active in the magazine segment. The Indian market is attractive, especially for luxury, lifestyle and niche magazines. Some international players also bought shares in Indian companies. The company Hubert Burda Media, a subsidiary of Burda International, acquired the Indian media house Exposure Media Marketing in June 2013.
To read the latest news on the Paper & Print Industry in India click Paper & Print Newsletter