Lower Coal Allocation Impacts Operations of Paper Mills in India - Papermart
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Lower Coal Allocation Impacts Operations of Paper Mills in India

In a communication to the Union ministers of coal & mines and railways, the Indian Paper Manufacturers Association (IPMA), apex body for the industry, stated that paper mills are facing rapidly dwindling coal stocks.

January 5, 2022

Coal Allocation
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As reported in a leading daily — operations at paper mills in India are getting severely affected due to lower coal allocation by Coal India and its subsidiaries and non-availability of adequate railway rakes for transportation of coal from mines to paper mills.

“In view of the continuing coal shortage and non-availability of adequate railway rakes, paper mills in India are finding it extremely hard to source adequate and un-interrupted thermal coal supplies as feedstock for their captive power plants and are facing rapidly dwindling coal stocks available with them. As a result, operations of paper mills across the country are getting severely impacted”, stated Mr. A S Mehta, president of IPMA.

According to IPMA, Pulp & Paper Industry is capital and power intensive and has invested a huge amount of money in setting up captive power plants (CPPs) for sustained supply of power and steam for the process requirements. Captive power plants reduce the generation and distribution load on the country’s entire power system. Paper Industry is a continuous process industry and energy cost is a significant part of the total production cost in paper mills.

For the last several months, Coal India and its subsidiaries have prioritised coal supplies to the power sector/thermal power plants on priority at the cost of non-power/non-regulated sectors. The problems have been compounded by even priority allocation of railway rakes to the power sector/thermal power plants.

“A resurgent paper industry is a must for sustained economic growth of the country since paperboard/packaging is crucial for all kinds of essential goods, FMCG, pharmaceuticals, food products, soaps, milk cartons, hygiene products, etc,” the IPMA said in a statement.

Tissue paper helps in improving the hygienic conditions and is used in all health-conscious institutions/areas like hospitals, etc. Similarly, writing & printing paper is essential for labels, pharmaceutical inserts, and all educational institutes.

Also Read: Vapi Paper Mills Grapple with Coal Shortage.

If supplies of coal from allocated/designated mines to paper mills as prior to June 2021 are not restored on priority, a large number of paper mills may need to have prolonged shutdowns resulting in shortage of writing & printing paper and packaging paper in the market and this may have cascading impact on all FMCG, food and pharma sectors.

IPMA has urged the government to consider priority allocation of both coal and railway rakes to captive power plants of the Pulp & Paper Industry at a par with thermal power plants/power sector.