pulp and paper industry in pakistan - · pdf filepulp and paper industry in pakistan 2 secom...

2012

Embassy of Brazil-

Islamabad

SECOM

PULP AND PAPER INDUSTRY

IN PAKISTAN

General information on the Pulp and Paper Industry in Pakistan. Research and

Compilation by the Commercial Section of the Embassy of Brazil in Pakistan.

Pulp and Paper Industry in Pakistan

1 SECOM-Islamabad, Pakistan

Table of Contents

1. Pakistan’s Economy ................................................................................................................ 2

2. Industry overview ..................................................................................................................... 2

2.1 Current Status of Pulp and Paper Industry in Pakistan ......................................... 3

2.2 Types of papers produced ........................................................................................ 4

2.3 Method of Producing Paper .................................................................................... 4

2.4 Raw Material Availability .................................................................................................. 5

3. Current status of Trade and Potential of Pak- Brazil Trade Cooperation in this sector ...7

3.1 Potential of Export to Pakistan ................................................................................. 8

4. Future Outlook ....................................................................................................................... 10

5. Companies and Useful Links ................................................................................................ 11



1. Pakistan’s Economy

Pakistan economy is positioned at 27th largest economy with 488 (1) billion USD in term of

Purchasing Power Parity. Pakistan has a semi-industrialized economy, which mainly

encompasses textiles, chemicals, food processing, agriculture and other industries.

Growth poles of Pakistan's economy are situated along the Indus River, diversified

economies of Karachi and Punjab's urban centers. The economy has suffered in the

past from decades of internal political disputes, terrorism, political instability, and

tensions with neighboring India. Now, energy crises in the country are affecting the

growth rate of the economy. Foreign exchange reserves are bolstered by steady

worker remittances; however a growing current account deficit – driven by a widening

trade gap as import growth outstrips export expansion – could draw down reserves and

dampen GDP growth in the medium term.

Despite of the challenges faced, there are number of factors favoring bright future

ahead. Large agriculture base, developing industrialization, abundance of natural

resources, proximity of emerging economic powers, like China, Russia and India, and

young population are some of the factors which indicate that Pakistan has a huge

economic potential. At the centre of the Asian growth, Pakistan could potentially

become one of Asia’s premier trade, energy and transport’s corridor. Geographical

location suits transit trade with proximity to the Middle-East, West Asia, Central Asia,

China and South Asia. Recent developments to realize this vision include Gwadar port

to be linked by road & rail to Afghanistan, Iran and China and onwards to Central Asia,

Middle East.

Basic Data:

Currency 1 Pakistani Rupee

1 Real equals 46.2 Pak. Rupees (25-07-2012)

Population 180 million (6th Largest)

Capital Islamabad

Territory 796,095 km2 (35th largest)

Imports 43 billion USD (2011)

Exports 25 billion USD (2011)

Independence 14th of August 1947

Language Urdu (national), English

2. Industry overview

In 1947 when Pakistan came into existence, there was not a single plant to

manufacture paper in the country. All the requirements of the paper in the country had

to be met through imports. Pakistan Industrial Development Corporation (PIDC) was set

up for the establishment of different industries including paper mill in public sector. In

1953, PIDC established the first paper mill at Chandargona in East Pakistan (Now

Bangladesh), followed by a high grade paper mills -Adamjee Paper & Board Mills at

Noshera in NWFP and a Newsprint Mill at Khulna in East Pakistan (Bangladesh) in 1959.

Later on Adamjee Paper and Board closed down its operation.

http://en.wikipedia.org/wiki/Pakistan

http://en.wikipedia.org/wiki/Chemicals

http://en.wikipedia.org/wiki/Food_processing

http://en.wikipedia.org/wiki/Indus_River

http://en.wikipedia.org/wiki/Economy_of_Karachi

http://en.wikipedia.org/wiki/Economy_of_Punjab,_Pakistan

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Foreign_exchange_reserves



With the separation of East Pakistan in 1971, a serious shortage of writing/printing paper

and newsprint was created in West Pakistan, as the supplies of these papers were

completely cut off from Bangladesh.

Now, this industry has different units across the country producing various grades of

papers, using local and imported raw materials. Unfortunately, due to poor planning in

1980’s and 1990’s, many of the units are lying closed from that time. At present, in

Pakistan there are about 100 units in the organized and unorganized sectors. These units

produce Writing and Printing Paper, Wrapping and Packing Paper, White duplex

coated, Un-coated board, chip Board and other board.

Paper Manufacturing in Pakistan

The position with regard to newsprint is, however, altogether different, as no newsprint

plant has so far been established in Pakistan, with the result that Pakistan imports it’s all

requirement of newsprint from abroad.

In Pakistan forest area constitutes just around 4.8 [1] per cent or 4.2 million hectares

which is far below the internationally acceptable ratio of 20-30 per cent necessary for

the balanced economy.

2.1. Current Status of the Industry

Paper Industry of Pakistan is not among the prime industries of the country and is in

developing stage. Consumption of Paper in Pakistan is in far excess of the domestic

capacity. So, the local demand of some types of papers is met through imports.



Table-01-Snap Shot of the Industry

Installed Capacity

Units 100

Installed Capacity 900,000 Tons

Utilization of the Capacity 434,740 Tons (2011)

Number of Employees 100,000

Tariff on import of Paper products 10-20 %

Tariff on import of Chemical wood Pulp Nil

Over a period of time domestic industry has attained capacities and capabilities to

produce all major Paper & Paperboard products leaving small room for imports.

However, domestic demand of some specialized papers, including coated art paper /

card and newsprint, among others, is met through imports.

More than 70 % of mills are located in Punjab province, 20 % are in Sindh province and

10% are in Khyber Pakhunkhwa province.

2.2. Types of paper Produced in Pakistan

Writing and printing paper

Packaging board

Liner board (A type of paperboard used in making corrugated cartons)

Corrugate medium

Continuous computer reels

Tissue and Security/banknote paper

2.3. Methods of Producing Paper in Pakistan

Neutral sulfite semi-chemical pulping process (NSSC) is one of the most common

pulping methods in Pakistan and wheat straw is used as a raw material. The pulping

liquor used in NSSC process is a solution of sodium sulfite containing sodium

bicarbonate or sodium hydroxide as a buffer to keep the PH around 7. The NSSC

process consist of four steps (a) steaming of raw material for 30 min at atmospheric

pressure, (b) addition of pulping chemical and application of 100 psi pressure at a

temperature of 120-125 centigrade for 60 min, (c) third step is the removal of excess

liquor not absorbed by the raw material, (d) lastly digestion at 140-160 centigrade for 1-

6 h. The yield of this process is 65-90% depending upon raw material, buffering agent

and cooking time.

Pakistan is also one of the few countries in the world where agricultural waste and

Neutral Sodium Sulfite cooking process is also used to produce paper and paperboard

grades. The fiber is given a combination of treatments with alkali and chlorine. Such

methods were used for bleaching as early as 1787, and it is claimed that straw pulp was

so made in 1830.



2.4. Raw Materials Availability

The basic raw material sources for manufacturing of paper and paper board can be

broadly classified into three groups:

Wood based material

Among the wood based raw materials, coniferous pine is in short supply in Pakistan. The

soft wood forests in the country exist in extreme northern hills of North West Frontier

province and Azad Kashmir which are mostly inaccessible due to lack of suitable

communication facilities. As we know that Forest plantations are the major assets of the

pulp and paper industry. Unfortunately, forests in Pakistan cover constitute only 4.8 % [1]

of total Land against the international benchmark of 25 %.

Eucalyptus trees (Safeda in Local language) in Pakistan- Source of Raw material Paper Pulp

Eucalyptus in Pakistan is among the non-coniferous species, are produced mostly on

irrigated land. The eucalyptus trees plantations are not yet sufficient to meet pulping

requirements of the paper industry. Also it’s a fact that the specie of eucalyptus grown

in Pakistan consumes lot of underground water. So its growth is restricted due to this

fact.



Agricultural wastes

Among the agro-based wastes the following are being extensive used:

Straws

Straws are by-products of cereal crops, the major being wheat and rice. Paper and

paper board industry is presently the main user of the marketed supplies of wheat straw.

Adequate quantities of wheat straw are available for the industry. Rice straw is

generally used as packing material for glass and ceramic products. Its use in paper

making is limited as it contains silica and gives some process problems.

Wheat Straw used in enrichment in Pakistan.

Bagasse

It is a well-established raw material for making almost all grades of paper, from fine

quality paper to board.

Grasses

There is a wide range of grasses grown in Pakistan which can be used for making pulp

and paper. Kahi grass grows wild along the river banks, some quantity are already

being use by paper mills. Other grasses available in Pakistan are Bhabbar, Gauj Gumaz,



Rhodes Grass, Chorkha, Pawpi, Chari and Dhawar. The main problems for using grasses

relate to their collection and procurement.

Other Raw Material

Waste Paper

There are two main sources of collection of waste paper. One is waste paper collected

at offices and factories such as government offices, business concerns, banks,

newspapers and publishing companies, printing and book binding concerns etc. the

other source is waste paper purchased by trash dealers from private persons at their

homes. It is estimated that adequate quantities of waste paper are available for use in

paper board industry. It is also being imported for the paper industry.

Cotton Linters and Waste

These are available from ginning and spinning operations as their by-products and are

used for making pulp of high quality for producing superior paper as well as blending

with short fiber pulp produced from wheat straw and grasses. Adequate quantities of

cotton linters and wastes are available for paper industry while about 10 % of the

cotton waste is also exported from Pakistan.

Pulp and Waste Paper

Wood pulp is imported while waste paper is available locally as well as imported. Wood

pulp is imported mainly from USA, Sweden, Canada and Far East while waste paper is

being imported from USA, UAE, Saudi Arabia and Singapore. Pakistan has no imports of

Pulp from Brazil. For Details related to bilateral trade, refer section 4 of the Report.

3. Current status of Trade and Potential of Pak- Brazil Trade Cooperation in this

sector

Brazil is 3rd largest exporter of Pulp. Following tables will show the whole picture of the

trade volumes of two countries with the world and among each other.

Table- 02: Trade statistics of Pulp of wood, fibrous cellulosic material [NCM 47]

Particulars

Amount in year 2011

Brazil’s export to the World

5 billion USD

Pakistan’s import from the World

97 million USD

Pakistan’ import from Brazil

Nil



Table- 03: Major Suppliers of Pulp to Pakistan

Particulars

Amount in year 2011

1. Canada

16 million USD

2.USA

13.6 million USD

3.Sweden

13.5 million USD

4.Chile

7.9 million USD

5. UAE

6 million USD

Table-04: Major Destination of Brazilian Pulp [NCM 47]

Particulars

Amount in 2011

1. China

1.2 billion USD

2.Netherlands

1.059 billion USD

3.USA

934 million USD

4. Italy

497 million USD

5. France

197 million USD

3.1. Potential of Export to Pakistan

Pakistan imports Pulp products from the world and total import of Pakistan was about 97

million USD in 2011. Pakistan does not import any Pulp products from Brazil. Chile is the

only Latin American country which exports those products to Pakistan. The major

product in the Pulp category is “Chemical wood pulp, soda or Sulphate [NCM 4703]”.

Brazil exports about 4.6 billion USD of these products to the world.

It’s also worth mentioning that there is no duty on import of “Chemical wood pulp, Soda

or Sulphate [NCM 4703]” in Pakistan. Brazilian companies should look for this niche

market to export their products. Apparently there is good potential of import subject to

cost viability of the products.



Table- 05: Trade statistics of Paper and paper Board [NCM 48]

Particulars

Amount in year 2011

Brazil’s export to the World

2.2 billion USD

Pakistan’s import from the World

527 million USD

Pakistan’ import from Brazil

7 million USD

Pakistan imports large quantities of newsprint paper. Newsprint is the major imported

finished product followed by white duplex/coated board. Pakistan imported 53 million

USD of News print paper from the world in 2011.

Table- 06: Major Suppliers of Paper and paper Board [NCM 48] to Pakistan

Particulars

Amount in year 2011

1. China

92 million USD

2.Sweden

71 million USD

3.Indonesia

70 million USD

4.Egypt

33 million USD

5. USA

21 million USD

Note: Brazil’s position is 19th as top suppliers of Papers to Pakistan.

Table-07: Major destination of Brazilian Paper and Paper Board [NCM 48]

Particulars

Amount in year 2011

1. Argentina

456 million USD

2. USA

211 million USD

3. UK

141 million USD

4. Venezuela

111 million USD

5. Chile

103 million USD

Note: Pakistan is in 34th biggest destination of Brazilian Paper and Paper Board products.



Table -08 Few Paper Products which have Potential for Export to Pakistan

H.S

Code

Particulars

Amount in USD thousand

Pakistan’s

import

from Brazil

Pakistan’s

import from

the world

Brazil’s

Export to the

World

Potential

Market for

in Pakistan

480255

Uncoated paper

and paperboard.

20

33,039

228,549

33,019

481092

Multi-ply paper and

paperboard.

368

70,448

171,437

70,080

480411 Paper, Kraft liner, in

rolls, unbleached,

uncoated.

323

10,999

159,483

10,676

480439 Paper, Kraft, rolls or

sheets.

NIL

3,573

13,926

3,573

4. Future Outlook

Paper Industry is broadly classified in three major categories i.e. Packaging Board,

Container Board and Writing and Printing Papers. Although the conditions of Paper

Manufacturing are not encouraging at the moments in Pakistan and Future outlook is

also look bit gloomy on account of energy crises, unavailability of cheap raw materials,

and wood pulp.

However other segments within this industry are showing good progress. As a whole

Future Outlook of the Paper industry in Pakistan seems bright as lots of opportunities are

available in the wake of rising demand for Paper and allied products. The demand for

the various categories of paper and paper board has shown a steady increase over

the years and is expected to continue increasing as population increases, literacy

improves and economic growth takes place. The shortage so far has been met through

imports.

Recently, a Finland company invested in this sector. A Pakistani Company-Packages

Limited specializes in liquid packaging and wood free writing Printing Papers recently

entered into a Joint Venture [2] agreement with Enso Stora from Finland. In this deal

Finnish company providing global solutions based on renewable materials– is to set up

a paperboard joint venture in Pakistan with Packages called Bulleh Shah Packaging as

it shifts focus from its papermaking business to healthier areas such as the packaging

business.

Paper industry has special significance in the economic structure of Pakistan. This is

because of two main reasons. First, Pakistan is predominantly an agrarian economy

offering suitable raw material base. Second, Pakistan has a large and growing market

size having a population of over 180 million. These factors are translating into consistent

demand for paper industry output. Literacy is one of the important factors of

development of any country. Despite of current challenges faced by the country it’s a



renowned fact that Pakistan still has huge potential to develop. Literacy goes directly

with the development. Literacy means education and education impliedly means

more books, more note books and more writing pad etc. Education and literacy tends

to increase the demand of the paper and its products.

Imports will be encouraged to meet the demands for pulp and paper, which cannot be

met by the forest resources in the country due to the large gap in supply and demand.

So, on the basis of above we can say that future of this market for Brazilian exports is

very promising.

5. Companies and Useful Links

5.1. Major Pakistan Companies dealing in Paper Industry

Packages Limited

Shahrah-e-Roomi P.O. Amer-Sidhu

Lahore-54760, Pakistan

Tel: + 92 42 35811541-6, 35811191-4

E-mail: [email protected]

Web: www.packages.com.pk

Century Paper & Board Mills Ltd

Lakson Square Building No: 2,

Sarwar Shaheed Road,

Karachi – 74200, Pakistan

Tel. (PABX): +92 21 3569 8000

Fax: +92 21 3568 1163


Web: www.centurypaper.com.pk

Flying Group of industries

103 Fazal Road, St. John Park

Lahore Cantt, 54600, Pakistan

Tel: +92 42 6674301-5

Ei-mail:mailto:[email protected]

Web: http://www.flyingpaper.com.pk

Premier Paper Mill Ltd

Km. 8, Lahore Road,

P.O. Kot Saleem, Sheikhupura 39350,

Punjab, Pakistan.

Tel: 92-42-588717-9


5.2 References___________________________________________________________________

1. Convention on Biological Diversity www.cbd.int/countries/profile/?country=pk

2. http://dawn.com/2012/09/18/stora-enso-to-set-up-paperboard-jv-in-pakistan/

mailto:[email protected]

http://www.packages.com.pk/


http://www.flyingpaper.com.pk/


http://www.cbd.int/countries/profile/?country=pk

http://dawn.com/2012/09/18/stora-enso-to-set-up-paperboard-jv-in-pakistan/



5.3 Usefullinks____________________________________________________________________

All Pakistan Paper Merchants Association of Pakistan http://www.appma.com.pk/

Board of Investment (BOI) http://www.pakboi.gov.pk/

Ministry of Commerce, Pakistan http://www.commerce.gov.pk/

Board of Investment (BOI) www.pakboi.gov.pk/

Ministry of Commerce, Pakistan www.commerce.gov.pk/

SECOM- Embassy of Brazil in Islamabad

www.embassyofbrazil.com.pk/commercial_section.html

http://www.appma.com.pk/

http://www.pakboi.gov.pk/


http://www.commerce.gov.pk/


http://www.embassyofbrazil.com.pk/commercial_section.html

pulp and paper industry in pakistan - · pdf filepulp and paper industry in pakistan 2 secom...

Documents