Paper & Board IndustryPaper & Board Industry

Course: Course: Analysis of Pakistani IndustriesAnalysis of Pakistani Industries

Facilitator: Facilitator: Mr. Afaq Ali KhanMr. Afaq Ali Khan

By:By:

Sharjeel Sultan AfridiSharjeel Sultan Afridi

Ahsan Iqbal ArafinAhsan Iqbal Arafin

Muhammad Haziq PatelMuhammad Haziq Patel

AgendaAgenda

HistoryHistoryTypes of paperTypes of paperPaper manufacturingPaper manufacturingPaper making processesPaper making processesCorrugated PackagingCorrugated PackagingEnvironmental ImpactEnvironmental ImpactPakistan Paper Sector (Current Scenario)Pakistan Paper Sector (Current Scenario)Production and Cost of ProductionProduction and Cost of ProductionImports Imports World ScenarioWorld ScenarioWTO ImpactWTO ImpactProblemsProblemsRecommendationsRecommendations

HistoryHistory

At the time of partition, there was no paper and At the time of partition, there was no paper and paper board manufacturing unit; all demands paper board manufacturing unit; all demands were met through imports.were met through imports.The first paper making industry in the sub-The first paper making industry in the sub-continent was set up in Delhi and Lahore in continent was set up in Delhi and Lahore in 1956. 1956. Lahore, at that time, had a production capacity Lahore, at that time, had a production capacity of 500 tons per annum.of 500 tons per annum.Due to ill planned growth, many of the units were Due to ill planned growth, many of the units were closed in the 80’s and 90’s. closed in the 80’s and 90’s.

Types of PaperTypes of Paper

Kraft paperKraft paper

Writing and printing paperWriting and printing paper

White duplex coatedWhite duplex coated

Uncoated boardUncoated board

Chip boardChip board

Paper ManufacturingPaper Manufacturing

Raw MaterialsRaw Materials

65% local grass and wheat straw.65% local grass and wheat straw.

25% based on waste paper.25% based on waste paper.

10% imported pulp.10% imported pulp.

Other raw materials include bagasse, rice straw Other raw materials include bagasse, rice straw and cotton waste. and cotton waste.

Paper Making ProcessesPaper Making Processes

There are 3 main procedures for making There are 3 main procedures for making paper.paper.

Pulp manufacturingPulp manufacturing

Bleaching.Bleaching.

Paper manufacturing.Paper manufacturing.

Pulp ManufacturingPulp Manufacturing

This includes a mild chemical pretreatment This includes a mild chemical pretreatment of wheat straw in a slightly alkaline sodium of wheat straw in a slightly alkaline sodium sulphite liquor at temperatures ranging sulphite liquor at temperatures ranging from 160 to 190 degree celcius.from 160 to 190 degree celcius.

After this, the cooked pulp is washed After this, the cooked pulp is washed thoroughly to get rid of the sodium thoroughly to get rid of the sodium sulphite. sulphite.

BleachingBleaching

The bleaching process is used to improve The bleaching process is used to improve the pulp brightness.the pulp brightness.

Chlorine.Chlorine.

Sodium Hypochlorite .Sodium Hypochlorite .

Chlorine Dioxide. Are used as bleaching Chlorine Dioxide. Are used as bleaching agents.agents.

Paper ManufacturingPaper Manufacturing

For the conversion of pulp into a For the conversion of pulp into a continuous sheet of paper the bleached continuous sheet of paper the bleached blended pulp together with the filling blended pulp together with the filling materials is passed over a wire with a materials is passed over a wire with a series of presses and driers.series of presses and driers.

Corrugated PackagingCorrugated Packaging

What is Corrugated Packaging?What is Corrugated Packaging?

Corrugated Packaging is a rigid sort of Corrugated Packaging is a rigid sort of packaging that is used generally in our packaging that is used generally in our daily lives, named daily lives, named “CARTONS”“CARTONS”

Advantages of Corrugated PackagingAdvantages of Corrugated Packaging

Provides efficient marketing.Provides efficient marketing.

Helps in weighing, handling and Helps in weighing, handling and transportation of products.transportation of products.

Light to carry for Freight companies.Light to carry for Freight companies.

They are recyclable.They are recyclable.

Can be easily manufactured in different Can be easily manufactured in different sizes.sizes.

Disadvantages of Corrugated PackagingDisadvantages of Corrugated Packaging

They are not reusable.They are not reusable.They cannot be produced economically on They cannot be produced economically on a small scale.a small scale.They are easily damaged by water and They are easily damaged by water and rough handling unless soaked with wax.rough handling unless soaked with wax.Not easily available in the specific sizes.Not easily available in the specific sizes.Plastic Crates and Plastic Bags might Plastic Crates and Plastic Bags might affect the market demand of corrugated affect the market demand of corrugated packagespackages

Environmental ImpactEnvironmental Impact

- - Pulp and Paper industry of Pakistan is Pulp and Paper industry of Pakistan is considered to be one of the most considered to be one of the most polluting industriespolluting industries

Waste WaterWaste Water

Air EmissionsAir Emissions

Solid WasteSolid Waste

Other Health RisksOther Health Risks

Waste WaterWaste Water

The major source of waste water is the The major source of waste water is the cleaning and washing of the pulpcleaning and washing of the pulpThe sewage from the washing stage is The sewage from the washing stage is called called BLACK LIQUOR,BLACK LIQUOR, which is highly which is highly polluted stream and contains excessive polluted stream and contains excessive Sodium Silicate (NASodium Silicate (NA22SoSo33))

The sewage received after the pulp has The sewage received after the pulp has been bleached with chlorine contains very been bleached with chlorine contains very toxic chemical compoundstoxic chemical compounds

Air EmissionsAir Emissions

The most significant air emissions are The most significant air emissions are CHLORINE EMISSIONS CHLORINE EMISSIONS from bleachingfrom bleaching..

Chlorine is toxic and generally mills have Chlorine is toxic and generally mills have airy and spacious layout which helps in airy and spacious layout which helps in mitigating chlorine emissions.mitigating chlorine emissions.

Solid Waste and Land PollutionSolid Waste and Land Pollution

Solid wastes from Paper industries include: Solid wastes from Paper industries include: Drained fibers, empty bags, cans, rejected Drained fibers, empty bags, cans, rejected wheat straw and dust from raw material wheat straw and dust from raw material preparation section.preparation section.

Solid waste produced is recovered, sorted, and Solid waste produced is recovered, sorted, and sold to manufacturers of low quality paper sold to manufacturers of low quality paper products.products.

Improper handling of fuel oil, spills over on the Improper handling of fuel oil, spills over on the ground; this leads to groundwater contamination.ground; this leads to groundwater contamination.

Other Health RisksOther Health Risks

Excessive noise can cause permanent Excessive noise can cause permanent hearing loss.hearing loss.

Noise level in the paper machine sections Noise level in the paper machine sections range from 90-100 dB, which can dull range from 90-100 dB, which can dull senses and increase accident rates.senses and increase accident rates.

Excessive exposure to dust may cause Excessive exposure to dust may cause irritation to the eyes, asthma and other irritation to the eyes, asthma and other respiratory ailments.respiratory ailments.

Gutta IndustryGutta Industry

Most of the pulp and paper mills discharge Most of the pulp and paper mills discharge their untreated sewage into Barian Canal their untreated sewage into Barian Canal which joins River Ravi.which joins River Ravi.

The sewage contains high amount of pulp The sewage contains high amount of pulp and has become a veritable source of raw and has become a veritable source of raw material for the manufacturers of low-material for the manufacturers of low-grade paperboard (gutta). grade paperboard (gutta).

Pakistan Paper SectorPakistan Paper Sector

There are about 100 units in the organized There are about 100 units in the organized and unorganized sectors having a and unorganized sectors having a cumulative installed capacity of 650,000 cumulative installed capacity of 650,000 tons per annum.tons per annum.The organized sector comprises of 26 The organized sector comprises of 26 paper manufacturing units with 575,000 paper manufacturing units with 575,000 tons of production capacity.tons of production capacity.About 70% of the units are located in About 70% of the units are located in Punjab, 20% in Sindh and 10% in NWFP.Punjab, 20% in Sindh and 10% in NWFP.

Contribution to the GDP Contribution to the GDP 0.36%0.36%

Employment Employment 100,000100,000

Skilled unskilled labor Skilled unskilled labor ratioratio

30:7030:70

Total investmentTotal investment Rs. 30 billionRs. 30 billion

Per capita consumptionPer capita consumption 3.79 KG3.79 KG

Technology Technology Low tech 93%Low tech 93%

Intermediate 7%Intermediate 7%

High Tech ---High Tech ---

Source of Machinery: Finland Sweden Source of Machinery: Finland Sweden KoreaKorea

Local production as a percentage of global production: Local production as a percentage of global production: 0.1% 0.1%

Cost of ProductionCost of Production

Cost of Production

Raw Materials

Labor

Fuel & Energy

Overheads

0

50

100

150

200

250

300

350

400

450

2002-03 2003-04 2004-05 2005-06

Production of Paperin Pakistan (000tonnes)

Production of Paper in Pakistan

Paper Imports Of PakistanPaper Imports Of PakistanWriting and Writing and printing paperprinting paper

10,905 tons10,905 tons Rs 481,622Rs 481,622

Paper and Paper and ordinary Boardordinary Board

25,412.23 tons25,412.23 tons Rs 1,051,957Rs 1,051,957

Duplex BoardDuplex Board 83,119 tons83,119 tons Rs 3,072,403Rs 3,072,403

Wrapping and Wrapping and packing paperpacking paper

39,696 tons39,696 tons Rs 1,282,416Rs 1,282,416

News PrintNews Print 95,221 tons95,221 tons Rs 2,782,516Rs 2,782,516

Specialty Specialty 10,738 tons10,738 tons Rs 1,417,262Rs 1,417,262

PulpPulp 63,167 tons63,167 tons Rs 2,385,892Rs 2,385,892

Percentage Imports of Paper in PakistanPercentage Imports of Paper in Pakistan

CountryCountry 2001-022001-02 2002-032002-03 2003-042003-04

USAUSA 28.9828.98 51.3351.33 40.4940.49

CanadaCanada 31.2531.25 12.1512.15 32.3532.35

IndonesiaIndonesia    0.950.95   

SwedenSweden 15.8315.83 16.9816.98 10.510.5

Russian FederationRussian Federation 0.260.26      

OthersOthers 23.6823.68 18.5918.59 16.6616.66

0

10

20

30

40

50

60

70

80

90

100

2001-02 2002-03 2003-04

Others

RussianFederation

Sweden

Indonesia

Canada

USA

Paper Machinery ImportsPaper Machinery Imports

0

5,000

10,000

15,000

20,000

25,000

30,000

2000 2001 2002 2003 2004

Machinery (Value in$000)

Production of Paper Mills (p.a)Production of Paper Mills (p.a)

Name of MillsName of Mills Installed CapacityInstalled Capacity ProductionProduction

Packages LimitedPackages Limited 8500085000 8100081000

Century Paper & Board Mills Ltd.Century Paper & Board Mills Ltd. 8500085000 7900079000

Paramount Paper & Board MillsParamount Paper & Board Mills 4500045000 37703770

Flying Board & Paper ProductFlying Board & Paper Product 3000030000 2176321763

Mandiali Paper & Board IndustryMandiali Paper & Board Industry 2400024000 2241022410

Taj International Ltd.Taj International Ltd. 85008500 70607060

Olympia Paper & Board MillsOlympia Paper & Board Mills 75007500 66206620

Pioneer Board MillsPioneer Board Mills 60006000 55005500

Shamsi Paper & Board MillsShamsi Paper & Board Mills 60006000 49804980

Rehman Classica (Pvt) Ltd.Rehman Classica (Pvt) Ltd. 50005000 41204120

World ScenarioWorld Scenario

About 300 million tonnes valued at $500 About 300 million tonnes valued at $500 billion worth of paper and paper based billion worth of paper and paper based products are manufactured in the world products are manufactured in the world annually.annually.

CountryCountry Consumption (mn Consumption (mn tonnes)tonnes)

United StatesUnited States 100 mn tonnes100 mn tonnes

ChinaChina 50 mn tonnes50 mn tonnes

IndiaIndia 7 mn tonnes7 mn tonnes

World forest DistributionWorld forest Distribution

World Literacy RatesWorld Literacy Rates

FinlandFinland 100%100%

USAUSA 98%98%

CanadaCanada 97%97%

BelgiumBelgium 99%99%

DenmarkDenmark 99.9%99.9%

JapanJapan 100%100%

AustriaAustria 99%99%

GermanyGermany 99%99%

NetherlandsNetherlands 98%98%

SwedenSweden 99%99%

Literacy Rate DistributionLiteracy Rate Distribution

WTO ImpactWTO Impact

Pulp and Paper sector will face stiff competition Pulp and Paper sector will face stiff competition with regional economies having comparative with regional economies having comparative advantage and proximity to Pakistan market like advantage and proximity to Pakistan market like China, India, Korea, Indonesia, Thailand and China, India, Korea, Indonesia, Thailand and Taiwan under WTO regime.Taiwan under WTO regime.Various products would become economical to Various products would become economical to Pakistani producers.Pakistani producers.Implementation of TRIPS (Trade Related Implementation of TRIPS (Trade Related Intellectual Property Rights) and TRIMS (Trade Intellectual Property Rights) and TRIMS (Trade Related Investment Measures) may have a Related Investment Measures) may have a negative impact.negative impact.

ProblemsProblems

Lack of competitive infrastructure and Lack of competitive infrastructure and technological base.technological base.Economies of Scale.Economies of Scale.Non-availability of raw and auxiliary Non-availability of raw and auxiliary materials at competitive prices.materials at competitive prices.Restrictive local demand and competitive Restrictive local demand and competitive factors for export market.factors for export market.Tariff and local duties irregularity.Tariff and local duties irregularity.Dumping of cheap products.Dumping of cheap products.

RecommendationsRecommendationsThe government should enhance The government should enhance competitiveness by bringing the prices low down competitiveness by bringing the prices low down to International prices.to International prices.

Duty should be reduced on the imported raw Duty should be reduced on the imported raw material (including wood pulp, chemicals, waste material (including wood pulp, chemicals, waste paper, plant and machinery).paper, plant and machinery).

Development Institutions should be made at Development Institutions should be made at macro level for the Pulp and Paper industry.macro level for the Pulp and Paper industry.

An incentive package should be introduced to An incentive package should be introduced to revitalize the projects in difficulties. revitalize the projects in difficulties.

Recommendations (Contd.)Recommendations (Contd.)

Arrangements should be made for proper Arrangements should be made for proper procurement, storage and supply of the procurement, storage and supply of the agricultural crop waste to the industry at agricultural crop waste to the industry at reasonable rates as these can be used as raw reasonable rates as these can be used as raw materials.materials.Bagasse can be used for making newsprint, Bagasse can be used for making newsprint, which has not been fully explored.which has not been fully explored.Efforts should be made to attain optimum Efforts should be made to attain optimum capacity utilization by up-gradation of technology capacity utilization by up-gradation of technology and availability of raw materials at competitive and availability of raw materials at competitive rates.rates.