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Paper industry’s centre of gravity has shifted eastward, environmental standards have become more stringent: Paper Arabia 2012

4 October, 2012

inugural final02 CopyPaper industry in Dubai resembles the situation paper industry was in Singapore eight years ago, as it is becoming a regional trade hub for paper and tissues, according to statement conducted by major participant at Paper Arabia 2012, the first-of-its-kind industry expo at the Dubai International Exhibition and Convention Centre.

The event attracted over 7,200 trade visitors, an increase of 10 per cent over last year. The visitors came from 70 countries and more than 90 percent of the display area has already been booked for next year’s edition, according to Satish Khanna, General Manager, Al Fajer Information and Services, organizers of the show.

Paper Arabia sent a clear message to industry players that environmental standards in the paper industry are going up, policies are becoming stricter and the demand for eco friendly products is on the rise. The next edition of Paper Arabia will be held from 29th September to 1 October 2013.

The fifth edition of Paper Arabia was a huge success. Companies’ stands were buzzing with enthusiastic visitors from all over the region. Leading paper manufacturers found the opportunity to meet face to face. The increased number of Chinese and Indian suppliers sent out the signal that the center of gravity within paper industry has shifted eastward.

Industry expert says: “USA and Europe are no longer the dominant forces in paper industry. Asian companies are setting the standards in productivity and in diversifying paper products. Environmental issues also are becoming more relevant and more important in our region.”

Collage CopyMr. Suresh Kilam, of the Indonesian Pulp and Paper Association and Executive Director, Asia Pulp & Paper (APP), world’s second largest pulp and paper producing company and the largest vertically integrated pulp and paper producer in Asia, excluding Japan, said that UAE’s paper industry resembles to a large extent Singapore’s paper industry eight years ago and the country has great potential to be a trade hub for paper and tissues.”

Suneet Sood, CEO of APP Dubai, added: “As a paper manufacturer in the Middle East, we need to showcase our products in an exhibition/trade fair and Paper Arabia is a good forum for paper manufacturers like us to participate. It’s an opportunity for us to meet our customers. We saw customers coming from Iran, Kuwait and other GCC countries.”

Khanna said: “Paper Arabia offered through three days opportunities to manufacturers and suppliers of finished products, equipment, machinery, paper chemicals, services, supplies of paper, tissue and converting sector to tap the Middle East and North African markets. The show placed special emphasis on hygiene and disposable products, reflected in the demand for various products such as wet wipes, baby diapers and sanitary napkins.”

Khanna added: “Asia and India are becoming major suppliers of paper to the UAE and the region. They have taken a front seat against Europe and Unites States due to the Dollar-Euro fluctuation. We have felt dominant Asian participation at the show and these companies are willing to put more investments in the region through opening up headquarters in Dubai.”

Sunil Bakht, Chairman of Orient Links was upbeat about the show. He said: “I think specific buyers and the decision makers are here. The quality of the visitors is very high. We had visitors from entire GCC as well as Nigeria, Kenya, Iran and Syria.”

Bakht also believes that Paper Arabia is becoming more important and a must-attend event to participate and to visit. “It has evolved to become one of the most important paper industry events in the world,” said Bakht.

Talking about his company’s plans, Bakht added: “Packaging is growing very fast and we have to be part of this lucrative market. We are setting up a new division dedicated to packaging. At the moment we are selling more than 200,000 tons of writing and printing grade paper. But in the near future packaging boards will also be part of our offering.”

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Middle East : A Booming Market for ITC

ITC Ltd – PSPD is operating in the Middle East market for close to 15 years and their model has moved from supplying recycled fibre board initially to more value added virgin paper boards and then to a mix including barrier boards. Middle East is an important part of the emerging world with its growing economy and consumption patterns. To extend the above conversation further we interacted with Mr. S.N. Venkatraman, Vice President – Marketing, ITC Ltd – PSPD to know more about ITC’s presence in Middle East and importance of this market.

In center : Mr. S.N. Venkatraman, Vice President - Marketing, ITC Ltd - PSPD
In center : Mr. S.N. Venkatraman, Vice President - Marketing, ITC Ltd - PSPD

Presence in the Middle East Market

We are present in Middle East from the last 15 years and had been operating in the region through our channel of agents/distributors. ITC is growing in capacity and that’s the reason why we have expanded our portfolio here. In the past 7-8 yrs we have built up excellent relationships and developed a stable business profile but had limitations by way of free capacity. Our sales mix has gradually changed in favour of higher value-added boards meeting the demanding print and conversion requirements in cigarette packaging, food service and beverage packaging. Now with our new packaging board machine coming on stream in October this year, we look forward to serve our existing customers and also add new customers. The markets in Saudi Arabia and UAE are consumption-driven markets and our range of products and capabilities have a good fit. The rate at which ITC is adding paper and board capacity, our international sales will be closely to 10%, only the market mix will change to some extent. Till now the western world looked to be an attractive destination but the next five years or so will see a shift in consumption and demand to Asia, Eastern Europe and Latin America.

Importance of the Middle East for ITC

One-third of our overseas sales are generated by this market and it forms an important part of our portfolio. Business wise we find a lot of similarities between here and India. For instance it shares the similar income levels and consumption habits with Tier-1 markets in India. There is a lot of natural affinity attached, which is reinforced by the fact that substantial amount of trading of different commodities is done between these countries. We don’t anticipate large producers of commodity grades of paper/boards in future in the Middle East. Most of the demand will be met through trade only, so it is an opportunity for us. Further, Middle East is like a half-way hub to Europe with the large printing houses catering to African/Central Asian and even European markets owing to the excellent facilities and quality of infrastructure in place.

Views on Paper Industry’s Image

Every company has to chalk down its own path. ITC’s concept of performance is not only business or financial performance it also addresses contributions to society and environment too. The spectrum of activities we do contributes to sustainability and also creates linkages for further growth in India. Production of one ton of paper/board creates a large multiplier effect on employment; conversion to stationery/exercise books, conversion to cartons and corrugated boxes, storage, transport and distribution to large number of end-users/brand owners/consumers which is not matched by other industries. On the contrary, one ton of steel probably goes to much larger industrial consumers who are fewer and less diverse resulting in lower employment generation. India also faces challenges on energy availability front and we will be increasing the usage of biofuels apart from becoming more energy efficient. Our growth will be supported by a corresponding increase in the scale of our plantations. We are happy to share that we have registered one of our plantation initiatives under the CDM mechanism and should soon receive carbon credits for the same.

Views on the Indian Market

As far as paper/boards business is concerned we anticipate growth for atleast a decade for this industry. With an established presence as the leader in packaging boards and with a growing stationery business we will be strengthening our presence and also be alive to other opportunities which will match the aspirations of the Indian consumer as he achieves a higher standard of living.

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Foresight International serving the growing needs of Middle East paper industry

DSC_0023 CopyIn a candid chat with Mr. Ashish Mukherjee from Foresight International during the Paper Arabia 2012, he summarized us about how Foresight has initiated its presence in the Middle East market and how the market has performed for them.

Middle East market is growing majorly in kraft and tissue paper grades. We explored this market 4 years back to promote Heimbach products and we have achieved substantial market share. Our key focus area is services from breast roll to finishing house. These services have been possible due to our vast experience in the field of paper making. In addition to this we have excellent support from our principal’s expertise. This assistance to customers is exclusive which helps to improve their end product quality and troubleshooting as well. We can provide service for single or multi layer fourdrinier part, which includes water management analysis, press part management, dryer analysis, hood balance etc. The other areas where Foresight works are as follows:

• Paperchine: The company was formed when Ex-Beloit Inc. was taken over by Johnson Foil Group. Currently they focus on high quality rebuilds – headboxes, top former, twin wire machines, presses, film press, calendering, rope less threading systems.

• Milltex: They supply sheet cutting machines.

• BVG, Germany: They supply coating and size kitchens and have patented starch enzyme conversion systems.

• Yamauchi: They are high quality roll suppliers and execute re-rubbersing job work as well. Their prime polyurethane rolls are of international repute.

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