2012

Embassy of BrazilIslamabad
SECOM

PULP AND PAPER INDUSTRY

IN PAKISTAN
General information on the Pulp and Paper Industry in Pakistan. Research and
Compilation by the Commercial Section of the Embassy of Brazil in Pakistan.

Pulp and Paper Industry in Pakistan

Table of Contents
1. Pakistans Economy ................................................................................................................ 2
2. Industry overview ..................................................................................................................... 2
2.1 Current Status of Pulp and Paper Industry in Pakistan ......................................... 3
2.2 Types of papers produced........................................................................................ 4
2.3 Method of Producing Paper .................................................................................... 4
2.4 Raw Material Availability .................................................................................................. 5
3. Current status of Trade and Potential of Pak- Brazil Trade Cooperation in this sector ...7
3.1 Potential of Export to Pakistan ................................................................................. 8

4. Future Outlook ....................................................................................................................... 10

5. Companies and Useful Links ................................................................................................ 11

SECOM-Islamabad, Pakistan

Pulp and Paper Industry in Pakistan

1. Pakistans Economy
Pakistan economy is positioned at 27th largest economy with 488 (1) billion USD in term of
Purchasing Power Parity. Pakistan has a semi-industrialized economy, which mainly
encompasses textiles, chemicals, food processing, agriculture and other industries.
Growth poles of Pakistan's economy are situated along the Indus River, diversified
economies of Karachi and Punjab's urban centers. The economy has suffered in the
past from decades of internal political disputes, terrorism, political instability, and
tensions with neighboring India. Now, energy crises in the country are affecting the
growth rate of the economy. Foreign exchange reserves are bolstered by steady
worker remittances; however a growing current account deficit driven by a widening
trade gap as import growth outstrips export expansion could draw down reserves and
dampen GDP growth in the medium term.
Despite of the challenges faced, there are number of factors favoring bright future
ahead. Large agriculture base, developing industrialization, abundance of natural
resources, proximity of emerging economic powers, like China, Russia and India, and
young population are some of the factors which indicate that Pakistan has a huge
economic potential. At the centre of the Asian growth, Pakistan could potentially
become one of Asias premier trade, energy and transports corridor. Geographical
location suits transit trade with proximity to the Middle-East, West Asia, Central Asia,
China and South Asia. Recent developments to realize this vision include Gwadar port
to be linked by road & rail to Afghanistan, Iran and China and onwards to Central Asia,
Middle East.
Basic Data:
Currency
1 Real equals
Population
Capital
Territory
Imports
Exports
Independence
Language

1 Pakistani Rupee
46.2 Pak. Rupees (25-07-2012)
180 million (6th Largest)
Islamabad
796,095 km2 (35th largest)
43 billion USD (2011)
25 billion USD (2011)
14th of August 1947
Urdu (national), English

2. Industry overview
In 1947 when Pakistan came into existence, there was not a single plant to
manufacture paper in the country. All the requirements of the paper in the country had
to be met through imports. Pakistan Industrial Development Corporation (PIDC) was set
up for the establishment of different industries including paper mill in public sector. In
1953, PIDC established the first paper mill at Chandargona in East Pakistan (Now
Bangladesh), followed by a high grade paper mills -Adamjee Paper & Board Mills at
Noshera in NWFP and a Newsprint Mill at Khulna in East Pakistan (Bangladesh) in 1959.
Later on Adamjee Paper and Board closed down its operation.
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Pulp and Paper Industry in Pakistan

With the separation of East Pakistan in 1971, a serious shortage of writing/printing paper
and newsprint was created in West Pakistan, as the supplies of these papers were
completely cut off from Bangladesh.
Now, this industry has different units across the country producing various grades of
papers, using local and imported raw materials. Unfortunately, due to poor planning in
1980s and 1990s, many of the units are lying closed from that time. At present, in
Pakistan there are about 100 units in the organized and unorganized sectors. These units
produce Writing and Printing Paper, Wrapping and Packing Paper, White duplex
coated, Un-coated board, chip Board and other board.

Paper Manufacturing in Pakistan

The position with regard to newsprint is, however, altogether different, as no newsprint
plant has so far been established in Pakistan, with the result that Pakistan imports its all
requirement of newsprint from abroad.
In Pakistan forest area constitutes just around 4.8 [1] per cent or 4.2 million hectares
which is far below the internationally acceptable ratio of 20-30 per cent necessary for
the balanced economy.

2.1. Current Status of the Industry

Paper Industry of Pakistan is not among the prime industries of the country and is in
developing stage. Consumption of Paper in Pakistan is in far excess of the domestic
capacity. So, the local demand of some types of papers is met through imports.

SECOM-Islamabad, Pakistan

Pulp and Paper Industry in Pakistan

Table-01-Snap Shot of the Industry

Installed Capacity
Units

100

Installed Capacity
Utilization of the Capacity

900,000 Tons
434,740 Tons (2011)

Number of Employees

100,000

Tariff on import of Paper products

10-20 %

Tariff on import of Chemical wood Pulp

Nil

Over a period of time domestic industry has attained capacities and capabilities to
produce all major Paper & Paperboard products leaving small room for imports.
However, domestic demand of some specialized papers, including coated art paper /
card and newsprint, among others, is met through imports.
More than 70 % of mills are located in Punjab province, 20 % are in Sindh province and
10% are in Khyber Pakhunkhwa province.

2.2. Types of paper Produced in Pakistan

Writing and printing paper

Packaging board
Liner board (A type of paperboard used in making corrugated cartons)
Corrugate medium
Continuous computer reels
Tissue and Security/banknote paper

2.3. Methods of Producing Paper in Pakistan

Neutral sulfite semi-chemical pulping process (NSSC) is one of the most common
pulping methods in Pakistan and wheat straw is used as a raw material. The pulping
liquor used in NSSC process is a solution of sodium sulfite containing sodium
bicarbonate or sodium hydroxide as a buffer to keep the PH around 7. The NSSC
process consist of four steps (a) steaming of raw material for 30 min at atmospheric
pressure, (b) addition of pulping chemical and application of 100 psi pressure at a
temperature of 120-125 centigrade for 60 min, (c) third step is the removal of excess
liquor not absorbed by the raw material, (d) lastly digestion at 140-160 centigrade for 16 h. The yield of this process is 65-90% depending upon raw material, buffering agent
and cooking time.
Pakistan is also one of the few countries in the world where agricultural waste and
Neutral Sodium Sulfite cooking process is also used to produce paper and paperboard
grades. The fiber is given a combination of treatments with alkali and chlorine. Such
methods were used for bleaching as early as 1787, and it is claimed that straw pulp was
so made in 1830.
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Pulp and Paper Industry in Pakistan

2.4. Raw Materials Availability

The basic raw material sources for manufacturing of paper and paper board can be
broadly classified into three groups:
Wood based material
Among the wood based raw materials, coniferous pine is in short supply in Pakistan. The
soft wood forests in the country exist in extreme northern hills of North West Frontier
province and Azad Kashmir which are mostly inaccessible due to lack of suitable
communication facilities. As we know that Forest plantations are the major assets of the
pulp and paper industry. Unfortunately, forests in Pakistan cover constitute only 4.8 % [1]
of total Land against the international benchmark of 25 %.

Eucalyptus trees (Safeda in Local language) in Pakistan- Source of Raw material Paper Pulp

Eucalyptus in Pakistan is among the non-coniferous species, are produced mostly on

irrigated land. The eucalyptus trees plantations are not yet sufficient to meet pulping
requirements of the paper industry. Also its a fact that the specie of eucalyptus grown
in Pakistan consumes lot of underground water. So its growth is restricted due to this
fact.

SECOM-Islamabad, Pakistan

Pulp and Paper Industry in Pakistan

Agricultural wastes
Among the agro-based wastes the following are being extensive used:
Straws
Straws are by-products of cereal crops, the major being wheat and rice. Paper and
paper board industry is presently the main user of the marketed supplies of wheat straw.
Adequate quantities of wheat straw are available for the industry. Rice straw is
generally used as packing material for glass and ceramic products. Its use in paper
making is limited as it contains silica and gives some process problems.

Wheat Straw used in enrichment in Pakistan.

Bagasse
It is a well-established raw material for making almost all grades of paper, from fine
quality paper to board.
Grasses
There is a wide range of grasses grown in Pakistan which can be used for making pulp
and paper. Kahi grass grows wild along the river banks, some quantity are already
being use by paper mills. Other grasses available in Pakistan are Bhabbar, Gauj Gumaz,

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Pulp and Paper Industry in Pakistan

Rhodes Grass, Chorkha, Pawpi, Chari and Dhawar. The main problems for using grasses
relate to their collection and procurement.
Other Raw Material
Waste Paper
There are two main sources of collection of waste paper. One is waste paper collected
at offices and factories such as government offices, business concerns, banks,
newspapers and publishing companies, printing and book binding concerns etc. the
other source is waste paper purchased by trash dealers from private persons at their
homes. It is estimated that adequate quantities of waste paper are available for use in
paper board industry. It is also being imported for the paper industry.
Cotton Linters and Waste
These are available from ginning and spinning operations as their by-products and are
used for making pulp of high quality for producing superior paper as well as blending
with short fiber pulp produced from wheat straw and grasses. Adequate quantities of
cotton linters and wastes are available for paper industry while about 10 % of the
cotton waste is also exported from Pakistan.
Pulp and Waste Paper
Wood pulp is imported while waste paper is available locally as well as imported. Wood
pulp is imported mainly from USA, Sweden, Canada and Far East while waste paper is
being imported from USA, UAE, Saudi Arabia and Singapore. Pakistan has no imports of
Pulp from Brazil. For Details related to bilateral trade, refer section 4 of the Report.

3. Current status of Trade and Potential of Pak- Brazil Trade Cooperation in this
sector
Brazil is 3rd largest exporter of Pulp. Following tables will show the whole picture of the
trade volumes of two countries with the world and among each other.
Table- 02: Trade statistics of Pulp of wood, fibrous cellulosic material [NCM 47]
Particulars

Amount in year 2011

Brazils export to the World

5 billion USD

Pakistans import from the World

97 million USD

Pakistan import from Brazil

Nil

SECOM-Islamabad, Pakistan

Pulp and Paper Industry in Pakistan

Table- 03: Major Suppliers of Pulp to Pakistan

Particulars

Amount in year 2011

1. Canada

16 million USD

2.USA

13.6 million USD

3.Sweden

13.5 million USD

4.Chile

7.9 million USD

5. UAE

6 million USD

Table-04: Major Destination of Brazilian Pulp [NCM 47]

Particulars

Amount in 2011

1. China

1.2 billion USD

2.Netherlands

1.059 billion USD

3.USA

934 million USD

4. Italy

497 million USD

5. France

197 million USD

3.1. Potential of Export to Pakistan

Pakistan imports Pulp products from the world and total import of Pakistan was about 97
million USD in 2011. Pakistan does not import any Pulp products from Brazil. Chile is the
only Latin American country which exports those products to Pakistan. The major
product in the Pulp category is Chemical wood pulp, soda or Sulphate [NCM 4703].
Brazil exports about 4.6 billion USD of these products to the world.
Its also worth mentioning that there is no duty on import of Chemical wood pulp, Soda
or Sulphate [NCM 4703] in Pakistan. Brazilian companies should look for this niche
market to export their products. Apparently there is good potential of import subject to
cost viability of the products.

SECOM-Islamabad, Pakistan

Pulp and Paper Industry in Pakistan

Table- 05: Trade statistics of Paper and paper Board [NCM 48]
Particulars

Amount in year 2011

Brazils export to the World

2.2 billion USD

Pakistans import from the World

527 million USD

Pakistan import from Brazil

7 million USD

Pakistan imports large quantities of newsprint paper. Newsprint is the major imported
finished product followed by white duplex/coated board. Pakistan imported 53 million
USD of News print paper from the world in 2011.
Table- 06: Major Suppliers of Paper and paper Board [NCM 48] to Pakistan
Particulars

Amount in year 2011

1. China

92 million USD

2.Sweden

71 million USD

3.Indonesia

70 million USD

4.Egypt

33 million USD

5. USA
21 million USD
th
Note: Brazils position is 19 as top suppliers of Papers to Pakistan.
Table-07: Major destination of Brazilian Paper and Paper Board [NCM 48]
Particulars

Amount in year 2011

1. Argentina

456 million USD

2. USA

211 million USD

3. UK

141 million USD

4. Venezuela

111 million USD

5. Chile
103 million USD
Note: Pakistan is in 34th biggest destination of Brazilian Paper and Paper Board products.

SECOM-Islamabad, Pakistan

Pulp and Paper Industry in Pakistan

Table -08 Few Paper Products which have Potential for Export to Pakistan

H.S
Code

Particulars

Uncoated paper
480255 and paperboard.
Multi-ply paper and
481092 paperboard.
480411 Paper, Kraft liner, in
rolls, unbleached,
uncoated.
480439 Paper, Kraft, rolls or
sheets.

Pakistans
import
from Brazil

Amount in USD thousand

Pakistans
Brazils
import from
Export to the
the world
World

Potential
Market for
in Pakistan

20

33,039

228,549

33,019

368

70,448

171,437

70,080

323

10,999

159,483

10,676

NIL

3,573

13,926

3,573

4. Future Outlook
Paper Industry is broadly classified in three major categories i.e. Packaging Board,
Container Board and Writing and Printing Papers. Although the conditions of Paper
Manufacturing are not encouraging at the moments in Pakistan and Future outlook is
also look bit gloomy on account of energy crises, unavailability of cheap raw materials,
and wood pulp.
However other segments within this industry are showing good progress. As a whole
Future Outlook of the Paper industry in Pakistan seems bright as lots of opportunities are
available in the wake of rising demand for Paper and allied products. The demand for
the various categories of paper and paper board has shown a steady increase over
the years and is expected to continue increasing as population increases, literacy
improves and economic growth takes place. The shortage so far has been met through
imports.
Recently, a Finland company invested in this sector. A Pakistani Company-Packages
Limited specializes in liquid packaging and wood free writing Printing Papers recently
entered into a Joint Venture [2] agreement with Enso Stora from Finland. In this deal
Finnish company providing global solutions based on renewable materials is to set up
a paperboard joint venture in Pakistan with Packages called Bulleh Shah Packaging as
it shifts focus from its papermaking business to healthier areas such as the packaging
business.
Paper industry has special significance in the economic structure of Pakistan. This is
because of two main reasons. First, Pakistan is predominantly an agrarian economy
offering suitable raw material base. Second, Pakistan has a large and growing market
size having a population of over 180 million. These factors are translating into consistent
demand for paper industry output. Literacy is one of the important factors of
development of any country. Despite of current challenges faced by the country its a
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Pulp and Paper Industry in Pakistan

renowned fact that Pakistan still has huge potential to develop. Literacy goes directly
with the development. Literacy means education and education impliedly means
more books, more note books and more writing pad etc. Education and literacy tends
to increase the demand of the paper and its products.
Imports will be encouraged to meet the demands for pulp and paper, which cannot be
met by the forest resources in the country due to the large gap in supply and demand.
So, on the basis of above we can say that future of this market for Brazilian exports is
very promising.

5. Companies and Useful Links

5.1. Major Pakistan Companies dealing in Paper Industry
Packages Limited
Shahrah-e-Roomi P.O. Amer-Sidhu
Lahore-54760, Pakistan
Tel:
+ 92 42 35811541-6, 35811191-4
E-mail: info@packages.com.pk
Web: www.packages.com.pk
Century Paper & Board Mills Ltd
Lakson Square Building No: 2,
Sarwar Shaheed Road,
Karachi 74200, Pakistan
Tel. (PABX): +92 21 3569 8000
Fax: +92 21 3568 1163
E-mail: info@centurypaper.com.pk
Web: www.centurypaper.com.pk
Flying Group of industries
103 Fazal Road, St. John Park
Lahore Cantt, 54600, Pakistan
Tel: +92 42 6674301-5
Ei-mail:mailto:info@flyingtissue.com
Web: http://www.flyingpaper.com.pk
Premier Paper Mill Ltd
Km. 8, Lahore Road,
P.O. Kot Saleem, Sheikhupura 39350,
Punjab, Pakistan.
Tel: 92-42-588717-9
E-mail: ppml@wolnet.pk
5.2 References___________________________________________________________________
1. Convention on Biological Diversity www.cbd.int/countries/profile/?country=pk
2. http://dawn.com/2012/09/18/stora-enso-to-set-up-paperboard-jv-in-pakistan/
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Pulp and Paper Industry in Pakistan

5.3 Usefullinks____________________________________________________________________
All Pakistan Paper Merchants Association of Pakistan http://www.appma.com.pk/
Board of Investment (BOI)

http://www.pakboi.gov.pk/

Ministry of Commerce, Pakistan

http://www.commerce.gov.pk/

Board of Investment (BOI)

Ministry of Commerce, Pakistan

www.pakboi.gov.pk/
www.commerce.gov.pk/

SECOM- Embassy of Brazil in Islamabad

www.embassyofbrazil.com.pk/commercial_section.html

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SECOM-Islamabad, Pakistan