Introduction: Paper and Pulp Products
Have you ever thought of living your life without paper? True, it’s a weird question to ask anyone, but if we take it into account for a minute, then we’d find the answer of the majority would be No. Even though the digital world has influenced our lives to such a great extent that today we can find anything on the Internet with just a few clicks, the smell and feel of the paper is something that can’t be replaced, especially for book lovers (you know what we meant!). Apart from the books industry, there are several other industries where the use of paper is quite extensive, such as packaging and advertising. This is the reason we have seen growing investments in the paper industry in recent times, especially in India because the number of consumers is the game. This becomes truer with the removal of lockdowns in the country and resuming of schools, colleges, and workplaces. With this article, we are going to discuss with you all the legal and statutory compliances you must follow to start a paper and pulp products manufacturing business in India.
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Paper and Pulp Products Manufacturing Business in India
Being a major source of direct and indirect employment for the country’s people, today’s paper industry of India accounts for almost two-three percent of the world’s production of paper and paperboard. And here, if we talk about the current year, you'd be surprised to know that the revenue it is expected to generate is around 17.01 billion dollars as per Statista. Not just this, given the availability of the required raw materials and human resources in abundance, the possibility of it growing further at pace over the next few years is also quite high.
With economic disruptions and lockdowns throughout the country, the paper industry of India has indeed witnessed several major downfalls in recent times. But with the robust recovery in the ongoing financial year, it has come back on the ‘track of growth’ again. In fact, overall India’s paper consumption is now expected to grow up to 30 million tonnes by FY 26-27, largely driven by an emphasis on education and growing demand for better-quality paper. And to keep pace with this growth, more than Rs 25,000 crore has been invested in the paper industry in recent years to make it more technologically advanced at par with the global levels.
Factors Affecting Paper and Pulp Products Manufacturing Business
- Availability of Raw Materials
For running a business efficiently, the availability of enough raw materials is a must and the same goes for the paper industry in India. With wood and water being the primary raw materials, it’s beneficial that the paper manufacturing facility is located near forests and rivers, which would also bring down the logistics costs. This is the reason we see many big paper manufacturing facilities located in Maharashtra, West Bengal, and Gujarat.
- Energy Supply
The usage of energy in the paper and pulp industry is extremely high and that’s why we see the government of India emphasizing the need for energy-efficient technologies today. With the presence of cheap and reliable hydroelectric energy in Himachal hills and Himalayan rivers, many paper and pulp facilities prefer operating there.
- Skilled and Unskilled Labour
Paper and pulp manufacturing is a labor-intensive industry, hence employs millions of skilled and unskilled workers from every corner of the country. Often paper manufacturing industries prefer setting up their facilities near the markets because of the availability of cheap labor there. This is also the reason behind the transportation of raw materials from the North Eastern states to Kolkata as it has low-cost labor, along with the high availability of coal, and water.
- Logistics Infrastructure
The proper infrastructure of transportation is one of the deciding factors for the success of any paper and pulp products manufacturing business in India. Often the paper industries are situated near to water systems as they can be used for the transportation of wooden logs and automation of the manufacturing process.
Just like other hundred businesses, starting a paper manufacturing unit requires a lot of capital on the part of business owners, because it involves acquiring state-of-the-art machinery, setting up facilities, ensuring the infrastructure, and many more things.
Raw Materials Required for the Paper and Pulp Industry
In recent years, bamboo has emerged as a significant raw material for the paper and pulp products manufacturing business. In fact, to such a great extent that out of the total cellulosic raw material required in industry, bamboo alone accounts for almost sixty to seventy percent.
Paper made using bamboo is of high quality and strong, hence perfect for making packaging, especially boxes and the reason behind this is its properties, which include long fiber, dense stands, and rapid generation.
- Sabai Grass
Before bamboo became a big thing in the paper and pulp products manufacturing business, Sabai grass was the only option available to the industry. Accounting for around seven to nine percent of India’s total cellulosic raw material today, Sabai grass acts as a great raw material for making paper of superior quality.
Bagasse is extensively used in the paper industry as it comes into use for almost all categories of paper, be it packaging, boxes, tissues, photocopier paper, etc.
With an annual production rate of between 5-6 million tonnes, half of the produced bagasse goes to the making of paper.
- Salia wood
It is extensively used in the making of newsprint papers.
Besides the above-mentioned ones, there are other materials as well that come in handy in the paper and pulp products manufacturing business, such as e-waste paper, rags, straw from rice and wheat, jute sticks, and softwood.
Compliances Required for a Paper and Pulp Manufacturing Business
Just like any other business, starting a paper and pulp manufacturing business in India also requires the fulfillment of compliances prescribed under the regulatory frameworks. Below, we have mentioned a few key ones:
- Certificate of Incorporation
Certificate of Incorporation is mandatory when the formation of a company happens. Issued by the Ministry of Corporate Affairs, it allows people to run their company as a separate and legal entity.
- GST Registration
Registration under GST is mandatory for every business entity, whose annual turnover crosses the prescribed limits, which is 40 lakhs INR for normal states and 20 lakhs INR for states of special category.
- Trade License
Trade license issued by the local authority or the state government as a permit to run business activities in a specific location.
- Udyam Registration
Udyam Registration, also known as MSME (Micro, Small, and Medium Enterprises) registration, to enjoy the benefits of state and central government-sponsored schemes.
With the growing demand and investment, starting a paper and pulp products manufacturing business seems pretty lucrative and can generate high returns on investment. If the list of required compliances is worrying you, then feel free to get in touch with Corpseed and sort it out. With a team of dedicated professionals, Corpseed can assist you at every step and help you make your presence in the paper and pulp industry.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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