Trends in Paper Consumption and the Impact on Demand for Recovered Fiber- India

Presented By Ashu Vyas

Weve been in India for 25 years and it shows.

Worlds Largest Marketing Company Specializing in Pulp and Paper

Revenues in Excess of

2.1

Billion Dollars

Moving over

Million Tons Annually

Global Foot Print 122 Countries

Paper and Paperboard Production Global Market

450 400 350 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 329 322 362 332 342 369 383 393 391 371 392E

Figures in Million Tonnes

Source: RISI

Paper and Paperboard Output by Region

100 90 80 70 60 50 40 30 20 10 0

United States

W Europe

Japan

China

India

Source: TerraChoice Marketing Services, Inc.

India
Indias Population
1.16 Billion

Median Age
25.9 Years

Urbanization
29% of India Lives in Cities

Economy
11th Largest

GDP Growth
7.4%
Source: CIA World Fact Book

Indian Paper Industry

571 8.5
Paper Mills

Kg

Per Capita Consumption

Demand Estimated at

2.7% Share Global Market

9.9
Million Tons

95%

have less than

50,000
mts per annum Manufactured

8.9 Tons Million

Indian Paper and Board Production

10 9 8 7 6 5 4 3 2 1 0 1997 1999 2001 2003 2005 2007 2009 3 3.8 4.3 5.7 7.4 6.5
8.9 8.8

Figures in Million Metric Tons

Source: IPMA Source: IPMA

India Production By Grade

1.75
0.2 0.4
0.95 0.8

3.3 2.6 0.1

Figures in Million Metric Tons

Source: Pyry/IPMA

Indian Writing Paper Demand

6 5 4 3 2 1 0 2005 2006 2007 2008 2009 2010 211 2012 2013 2014 2015 2.75 2.93 3.11 3.3 3.7 3.5 4 4.25 4.8 4.5

2.6

Figures in Million Metric Tons

Source: IPMA

Figures in Million Metric Tons

Source: IPMA

Indian Containerboard Demand

4 3.5 2.99 3 2.61 2.5 2.07 2 1.5 1 0.5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0.88 1.01 1.15 1.32 1.52 1.75 2.44 2.28 2.79 3.42 3.2

Figures in Million Metric Tons

Source: Hawkins Wright/IPMA

Indian Cartonboard Demand

2.5

2.38 2.2 2.04

1.89 1.75 1.62

1.5

1.38 1.25 1.05 1.12

1.5

0.9 0.82

0.97

0.5

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Figures in Million Metric Tons

Source: Hawkins Wright/IPMA

Forecasted Paper and Paperboard Production Trend

Figures in Million Metric Tons

Source: Poyry/Hawkins Wright/IPMA

Cross Currents Impacting the Forecasted Growth

Contributors to Forecasted Growth

Strong Economic Climate
GDP Growth Rate of 6-9% since 2004 Growth Rate Will Continue at this rate for 5-10 Years

Low Per Capita Paper Consumption

8.5kgs Compared to 56kgs World Avg. Paper Production will Double by 2020

Cross Currents Impacting the Forecasted Growth

Challenges
Fragmented Market
Indian Mills are Small No Economies of Scale

Inadequate Infra-Structure
Poor Domestic Transportation No Cheap Sources of Power

Low Recovery Rate

Unorganized Collection Program Under 30% Recycling Rate

Forecasted Paper and Paperboard Production Trend

Figures in Million Metric Tons

2009

Forecasted Fiber Composition

Source: Poyry/Hawkins Wright/IPMA

Forecasted Paper and Paperboard Production Trend

Figures in Million Metric Tons

2015
55% 23%

22%

Forecasted Fiber Composition

Source: Poyry/Hawkins Wright/IPMA

Forecasted Paper and Paperboard Production Trend

Figures in Million Metric Tons

2020
56%

23% 21%

Forecasted Fiber Composition

Source: Poyry/Hawkins Wright/IPMA

Recovered Paper Forecast

12

10.81

10

7.92
8

4.9

2009

2015

2020

Figures in Million Metric Tons

Source: PoyryIPMA

US Recovered Fiber Exports to India

1400 1200 1000 800 600 406 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 588 516 479 465 615 973 859 713 1186 1223E

Figures in Thousand Metric Tons

Source: RISI

Imports or Domestic Collections?

At Current Recovery Rate
1.8 Million tons of Incremental Domestic Consumption 1.2 Million tons of Incremental Imported Recovered Fiber 60/40 Current Ratio of Domestic to Imported Recovered Paper

At Increased Recovery Rate

If Recovery Rate Increases to 42% by 2015 and 48% by 2020, Much of Incremental Demand Could be Fed by Increased Domestic Collections

Fiber Composition of Indian Paper Production

Source: Poyry

Cross Currents Impacting the Forecasted Growth

Imports or Domestic Collections?

Will Domestic Collections Grow Fast Enough? Required Quality of Imported Recycled Fiber Needed

Domestic Centric Market

Competition From China

Conclusion

Thank You
Presented By Ashu Vyas