With the entry of new players and consolidation in the sector, the paper and pulp industry landscape is likely to be significantly altered by 2020, according to Yogesh Agarwal, Managing Director and CEO of Ballarpur Industries Ltd.

Predicting a shakeout, he said, “It will be an easy call to sell out by those who are facing the heat from growing competition and low profitability. Only the best will survive.”

Delivering his keynote address at a seminar on the pulp and paper industry here on Tuesday, , the BILT chief said that the capital intensive paper industry is facing several challenges including non-availability of raw materials and difficulties in accessing cheaper capital.

The entry of foreign players will pose a big challenge, he said.

The market environment is likely to change for Indian companies as new and differentiated products are introduced. The country has had no significant capacity additions in the last 15 years due to unattractiveness of the industry and reluctance to accept new technologies.

“The changes in the last 3-4 years in the global market and in India will have far reaching impact on the sector as competition is likely to intensify. The ability to read and understand how the paper industry will shape up by 2020 will set apart those who can meet challenges and others who do not have the capability to manage and adapt to changes,” he said.

The demand for paper products will go up in India but the challenge is to remain cost competitive. The cost of fibre and other raw materials and energy have a major impact on the industry.

rishikumar.vundi@thehindu.co.in

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