Paper & Board Industry

Paper & Board Industry

Course: Analysis of Pakistani Industries Facilitator: Mr. Afaq Ali Khan By: Sharjeel Sultan Afridi Ahsan Iqbal Arafin Muhammad Haziq Patel

Agenda History Types of paper Paper manufacturing Paper making processes Corrugated Packaging Environmental Impact Pakistan Paper Sector (Current Scenario) Production and Cost of Production Imports World Scenario WTO Impact Problems Recommendations

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

Types of Paper Kraft paper Writing and printing paper White duplex coated Uncoated board Chip board

Paper Manufacturing Raw Materials 65% local grass and wheat straw. 25% based on waste paper. 10% imported pulp. Other raw materials include bagasse, rice straw and cotton waste.

Paper Making Processes There are 3 main procedures for making paper. Pulp manufacturing Bleaching. Paper manufacturing.

Pulp Manufacturing This includes a mild chemical pretreatment of wheat straw in a slightly alkaline sodium sulphite liquor at temperatures ranging from 160 to 190 degree celcius. After this, the cooked pulp is washed thoroughly to get rid of the sodium sulphite.

Bleaching The bleaching process is used to improve the pulp brightness. Chlorine. Sodium Hypochlorite . Chlorine Dioxide. Are used as bleaching agents.

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

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

Advantages of Corrugated Packaging Provides efficient marketing. Helps in weighing, handling and transportation of products. Light to carry for Freight companies. They are recyclable. Can be easily manufactured in different sizes.

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

Environmental Impact - Pulp and Paper industry of Pakistan is considered to be one of the most polluting industries Waste Water Air Emissions Solid Waste Other Health Risks

Waste Water The major source of waste water is the cleaning and washing of the pulp The sewage from the washing stage is called BLACK LIQUOR, which is highly polluted stream and contains excessive Sodium Silicate (NA2So3) The sewage received after the pulp has been bleached with chlorine contains very toxic chemical compounds

Air Emissions The most significant air emissions are CHLORINE EMISSIONS from bleaching. Chlorine is toxic and generally mills have airy and spacious layout which helps in mitigating chlorine emissions.

Solid Waste and Land Pollution Solid wastes from Paper industries include: Drained fibers, empty bags, cans, rejected wheat straw and dust from raw material preparation section. Solid waste produced is recovered, sorted, and sold to manufacturers of low quality paper products. Improper handling of fuel oil, spills over on the ground; this leads to groundwater contamination.

Other Health Risks Excessive noise can cause permanent hearing loss. Noise level in the paper machine sections range from 90-100 dB, which can dull senses and increase accident rates. Excessive exposure to dust may cause irritation to the eyes, asthma and other respiratory ailments.

Gutta Industry Most of the pulp and paper mills discharge their untreated sewage into Barian Canal which joins River Ravi. The sewage contains high amount of pulp and has become a veritable source of raw material for the manufacturers of lowgrade paperboard (gutta).

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

Contribution to the GDP 0.36% Employment

100,000

Skilled unskilled labor ratio

30:70

Total investment

Rs. 30 billion

Per capita consumption 3.79 KG

Technology Low tech

93%

Intermediate

7%

High Tech

---

Source of Machinery: Finland Sweden Korea Local production as a percentage of global production: 0.1%

Cost of Production Cost of Production

Raw Materials Labor Fuel & Energy Overheads

Production of Paper in Pakistan 450 400 350 300 250

Production of Paper in Pakistan (000 tonnes)

200 150 100 50 0 2002-03

2003-04

2004-05

2005-06

Paper Imports Of Pakistan Writing and printing paper

10,905 tons

Rs 481,622

Paper and ordinary Board

25,412.23 tons

Rs 1,051,957

Duplex Board

83,119 tons

Rs 3,072,403

Wrapping and packing paper

39,696 tons

Rs 1,282,416

News Print

95,221 tons

Rs 2,782,516

Specialty

10,738 tons

Rs 1,417,262

Pulp

63,167 tons

Rs 2,385,892

Percentage Imports of Paper in Pakistan Country

2001-02

2002-03

2003-04

USA

28.98

51.33

40.49

Canada

31.25

12.15

32.35

Indonesia Sweden Russian Federation Others

0.95 15.83

16.98

10.5

18.59

16.66

0.26 23.68 100

Others

90 80 70

Russian Federation

60

Sweden

50 Indonesia

40 30

Canada

20 10 0

USA 2001-02

2002-03

2003-04

Paper Machinery Imports 30,000 25,000 20,000 15,000

Machinery (Value in $000)

10,000 5,000 0 2000

2001

2002

2003

2004

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

Installed Capacity

Production

Packages Limited

85000

81000

Century Paper & Board Mills Ltd.

85000

79000

Paramount Paper & Board Mills

45000

3770

Flying Board & Paper Product

30000

21763

Mandiali Paper & Board Industry

24000

22410

Taj International Ltd.

8500

7060

Olympia Paper & Board Mills

7500

6620

Pioneer Board Mills

6000

5500

Shamsi Paper & Board Mills

6000

4980

Rehman Classica (Pvt) Ltd.

5000

4120

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

Country

Consumption (mn tonnes)

United States

100 mn tonnes

China

50 mn tonnes

India

7 mn tonnes

World forest Distribution

World Literacy Rates Finland USA Canada Belgium Denmark Japan Austria Germany Netherlands Sweden

100% 98% 97% 99% 99.9% 100% 99% 99% 98% 99%

Literacy Rate Distribution

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

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

Recommendations The government should enhance competitiveness by bringing the prices low down to International prices. Duty should be reduced on the imported raw material (including wood pulp, chemicals, waste paper, plant and machinery). Development Institutions should be made at macro level for the Pulp and Paper industry. An incentive package should be introduced to revitalize the projects in difficulties.

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