In an exclusive interview with Paper Mart, Mr. Abhishek Agarwal, Executive Director & CEO of Kempt Tissues Pvt. Ltd., shares insights on India’s evolving tissue paper market, highlighting rising hygiene awareness, strong AfH and HoReCa demand, capacity utilisation, sustainability initiatives, and competitive pressures from imports. He discusses the company’s production strategy, shift toward semi-virgin tissue, technology investments, and long-term outlook for the domestic tissue paper industry.
Paper Mart: How do you assess current tissue-consumption trends in India, and which segments, among retail, HoReCa, and AfH, are driving demand growth?
Abhishek Agarwal: At Kempt Tissues Pvt. Ltd., we see India’s tissue consumption steadily rising, driven by growing hygiene awareness, urbanisation and lifestyle changes. Tissue products are increasingly becoming everyday essentials rather than discretionary items, with per-capita usage gradually improving across the country.
Among the segments, retail remains the foundation of demand, supported by household adoption of toilet rolls, kitchen towels and facial tissues, aided by modern trade and e-commerce penetration. However, the strongest growth momentum is coming from the AfH segment, particularly HoReCa, as hotels, restaurants and cafés place greater emphasis on hygiene standards and customer experience. Institutional and commercial spaces such as offices, healthcare and public facilities are also contributing significantly through bulk tissue consumption.
PM: What is your mill’s installed tissue-production capacity, and what has been your actual output over the last year? What factors influence the gap between capacity and utilisation?
AA: Our mill currently has an installed tissue-production capacity of 18,000 metric tonnes per annum, reflecting our strategic investment in modern, scalable manufacturing lines designed to meet both current demand and future growth.
Over the past year, our actual output reached approximately 15,300 metric tonnes, which translates to a utilisation rate of roughly 85%. The main factors influencing the gap between installed capacity and utilisation include: seasonal demand fluctuations, product mix dynamics, maintenance & upgrades and supply-chain variability.
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PM: What recent capacity additions, technology upgrades, or automation initiatives have you undertaken to enhance production efficiency and quality?
AA: Over the past two years, we have focused on targeted capacity expansion, technology upgrades and automation to enhance efficiency and quality. Investments in high-performance equipment for advanced process controls and automated quality inspection have strengthened consistency and reduced downtime. In parallel, we are installing a 4 MW captive solar power project to improve energy efficiency and sustainability, reinforcing our commitment to responsible growth while supporting long-term cost and operational stability.
PM: How are global pulp price fluctuations and currency volatility shaping your raw-material procurement strategy and cost structure?
AA: Global pulp price fluctuations and currency volatility are key external factors influencing our raw-material procurement strategy and overall cost structure. As an integrated tissue manufacturer, we depend on pulp and import recovered fiber as a primary input, and swings in its global prices. To manage this effectively, we pursue a multi-pronged procurement approach:
Diversified Sourcing: We maintain relationships with multiple international and domestic suppliers to mitigate the risk of dependence on a single source. This flexibility allows us to optimise supply against price movements and logistical constraints.
Cost Pass-Through and Value Engineering: In phases of sustained cost pressure, we work closely with our sales and product teams to balance pricing adjustments with value engineering, optimising product specifications without compromising quality, while maintaining competitiveness.
Inventory and Working Capital Optimisation: We adjust inventory levels strategically to balance carrying costs with supply security, particularly when market indicators suggest rising pulp prices or unfavourable currency trends.
The strongest growth momentum is coming from the AfH segment, particularly HoReCa, as hotels, restaurants and cafés place greater emphasis on hygiene standards and customer experience.
PM: What steps has your mill taken to improve water efficiency, energy performance, and overall environmental sustainability in tissue production?
AA: We have strengthened water conservation and reuse systems, enabling higher recycling of process water and reducing overall freshwater intake. On the energy front, regular audits, energy-efficient drives and process optimisation initiatives have helped lower specific energy consumption. In addition, we are in the process of installing a 4 MW captive solar power project, which will significantly reduce our dependence on grid power and lower our carbon footprint.
From a raw-material sustainability perspective, we are increasingly focusing on semi-virgin tissue production, thereby reducing reliance on fully virgin pulp. Currently, 50–60% of our furnish comprises imported recovered fiber, which helps conserve forest resources while maintaining consistent product quality through controlled sourcing and processing.
PM: How do imported tissue products from China, Indonesia, and GCC markets influence domestic pricing, competition, and positioning for Indian mills?
AA: In recent years, imports of paper and tissue grades into India have risen significantly, with shipments from China and ASEAN countries growing sharply due in part to preferential tariff treatment under free-trade agreements. This has made certain imported products price-competitive compared to locally produced grades, increasing competitive pressure on domestic mills.
Because producers in China and Southeast Asia benefit from larger scale, cost-efficient production and duty concessions under trade agreements like AITIGA and APTA, imported tissue and paper products often reach Indian markets at lower landed costs. This dynamic can compress pricing in segments where imports are prevalent, challenging domestic pricing power and contributing to under-utilisation of local capacity.
At the same time, Indian mills are focusing on differentiation through quality, service, and specialised tissue grades, as well as investing in technology and sustainability to strengthen their value proposition. While imports add competitive intensity, they have also prompted domestic producers to innovate and improve cost efficiencies.
PM: The Indian market still has a significant presence of low-quality, cheaper, and largely unorganised tissue products. How is this affecting your brand positioning, pricing power, and investments in higher-quality grades?
AA: This is one of the key reasons we have consciously moved towards producing semi-virgin tissue paper rather than relying solely on 100% virgin pulp. By integrating 50–60% high-quality imported recovered fiber into our furnish, we are able to make our raw-material sourcing more sustainable, resilient and cost-competitive, while significantly reducing our dependence on virgin pulp.
Importantly, this approach does not compromise product performance. Through careful fiber selection, advanced processing and strict quality controls, we are able to achieve softness, strength and absorbency levels that are very close to those of virgin tissue. At the same time, it allows us to offer a more competitively priced product in a market that is highly price-sensitive, while aligning with growing customer and regulatory expectations around sustainability.
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PM: Are you seeing a clear shift among Indian consumers toward premium, softer, and more structured tissue grades, and how are you adapting your product mix accordingly?
AA: We are definitely witnessing a clear shift in Indian consumer preferences toward premium, softer and more structured tissue grades. As awareness of hygiene and comfort continues to grow, especially in urban and semi-urban markets, consumers are increasingly willing to trade up from basic, low-cost options to products that deliver better feel, strength and overall performance. This trend is evident both in organised retail and in Away-From-Home (AfH) demand, where end-users value consistency and quality.
Our portfolio now places stronger emphasis on premium and value-added grades, including softer multi-ply toilet tissues, structured facial tissues and enhanced napkin formats. We are also focusing on product differentiation through features like improved embossing, controlled softness profiles and packaging innovations that appeal to quality-conscious shoppers.
PM: What is your long-term outlook for India’s tissue industry by 2030, and what policy interventions or industry reforms would strengthen domestic competitiveness and quality standards?
AA: We are optimistic about India’s tissue industry through 2030, driven by rising hygiene awareness, growing organised retail, and increasing Away-From-Home (AfH) demand in hospitality, healthcare, and corporate sectors. To strengthen domestic competitiveness and quality, supportive measures could include- standardised quality benchmarks to differentiate organised players from low-quality unorganised products. Incentives for sustainability and energy-efficient investments, including renewable energy and recycled fiber use. Technology and skill upgradation support to modernise mills and improve efficiency and balanced import regulations to ensure a level playing field with duty-favoured foreign suppliers.
Indian mills are focusing on differentiation through quality, service, and specialised tissue grades, as well as investing in technology and sustainability to strengthen their value proposition.
