Paper firms mull strategic pact

The paper industry may soon find a solution to the raw material shortage which is hindering large-scale expansion programmes.

To tide over this, the industry has proposed a multi-stakeholder partnership (MSP) which entails a tripartite association between the landowner, land user and the promoter (paper producer).

The ministry of environment and forests has cleared the proposal which is waiting for the nod from the Prime Minister's Office (PMO) and the Union Cabinet.

According to the policy, the land holding size will be in the range of 5-50 hectares and will be given on lease for 30 years through a competitive bidding process. The revenue from the crop will be shared between the stakeholders. 
 

CAPACITY EXPANSIONS
In '000 tonne	2005-06		2005-06
Ballarpur Industries	462	JK Paper	190
ITC	374	Sirpur Paper	84
Hind Paper Corp	335	Star Paper	71
TNNPL	230	Shree Bhawani Paper	21
West Coast	164	MBD Group	12
AP Paper	154	Rama Newsprint	132
Source: CRIS INFAC

"The proposal, if materialised, will be a forerunner to large captive plantations which the industry has been asking for," said R R Vederah, managing director of Bilt and former president of the Indian Paper Manufacturers' Association (IPMA). The industry has sought 1-1.5 million hectares of degraded land near paper mills. Apart from improving the country's forest cover, it will also bring employment in rural areas, he said.

Domestic paper producers are faced with rising input costs as bamboo and pulp prices are increasing regularly. The government so far has not accepted industry's proposal for captive plantations. This has forced major producers such as Bilt, country's biggest paper producer, to venture out in search of raw material.

International pulp prices have jumped by about 7 per cent last year from $560 a tonne to $600 now, driving companies to hike paper prices by an average of Rs 2,000 a tonne.