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Global Paper and Pulp Market Growth: USD 357.21 Billion in 2023, Projected to Reach USD 391.4 Billion by Trident Ltd 2032

Trident Ltd Share Price Management Discussions

Global economic overview

The global economy expanded by 3.2% in the CY 2023, demonstrating remarkable resilience in the face of continuing economic adversities like geopolitical challenges, demand slowdown and fluctuations in commodity prices which has led to inflationary pressures in both advanced and emerging markets.

The global Manufacturing PMI has been under contraction in CY2023 but has indicated stabilisation towards the start of CY2024. Additionally, commodity prices have remained relatively stable in CY2023 despite the ongoing economic slowdown in China & Europe and geo-political challenges in Europe and the Middle East. Owing to the rising interest of foreign institution investor, several emerging economies like India, Vietnam and Mexico are expected to show a positive growth trajectory.

Global growth is estimated to remain stable at 3.2% throughout CY 2024 and CY 2025.2 Global inflation is receding at a faster pace than anticipated. It declined from 8.7% in CY 2022 to 6.8% in CY 2023 and is expected to further decline to 5.9% in CY 2024, according to IMF.

However, geopolitical risks remain high, particularly in light of the continuing conflict in the Middle East and political tensions in Europe. Going forward, declining inflation and greater government spending is anticipated to alleviate fiscal pressures and expected to attract investments for future growth.

Growth in the Global GDP

Indian economic overview

Indias economy is one of the fastest-growing major economies in the world. In FY 2024, India registered a GDP growth rate of 8.2%.3 This growth was accompanied by a fall in the inflation rate and improved disposable income which resulted in increased private consumption and sustained demand for goods and services in the country. The Reserve Bank of Indias (RBI) proactive monetary policies contributed to strengthening the financial landscape of the country.

The capital expenditure push, particularly on roads and railroads, has favoured in maintaining the economic growth rate. For the year under review, the FDI in India remained resilient and amounted to USD 71.0 billion.

The Government of India also allocated 3.3% of GDP to infrastructure development and supported the economy by creating employment opportunities. The manufacturing sector grew by 9.9% in FY 2024 owing to the favourable demand conditions in the economy. Notably, there has been greater capacity utilisation across the manufacturing sector, which has further fuelled economic growth.

Outlook

The Indian economy is expected to continue its upward trend and become the third-largest economy by 2027. According to the Organisation for Economic Co-operation and Development (OECD), the GDP is expected to grow by 6.6% in FY 2024-25. Inflation is expected to further fall and this will support the increased level of consumption of goods and services and contribute to increased activity in the economy.

With the support of various industry-promoting programmes like the Production-Linked Incentive (PLI) scheme and the governments ‘Make in India initiative, the manufacturing sector can potentially expand into a USD 1 trillion industry by 2025–2026. This strategic move is expected to help the growth of the manufacturing sector and thereby contribute to economic growth in the coming years.

Global Paper Industry

The global paper and pulp market attained a market value of USD 357.21 billion in CY 2023.9 The industry is growing steadily and was driven by factors such as increased need for paper and paper-based products across the globe, expected to grow from USD 360.08 billion in 2024 to USD 391.4 billion by 2032. Demand for packaging materials which was fuelled by the growth in e-commerce. The push for sustainable packaging solutions has given thrust for adoption of eco-friendly paper packaging materials. The printing and writing (P&W) paper segment of the market exhibited significant growth in emerging economies such as India and China. The markets growth in these regions was supported by growth in the education sector and increased use of e-commerce platforms by individuals. The Asia-Pacific region remained a leading market for paper and paper-based products in the reported year with a market share of 50.16% in 2023 (Fortune Business Insights). It was visible that the key industry players were focused on investing towards expanding their global presence and thereby, tap into the new markets and diversify their customer base. The adoption of automated manufacturing processes to reduce reliance on labour intensive production processes and integrating technologies into its operations proved to be impactful. This further aided the industry to enhance its productivity and manage costs efficiently. With the revival in global economy and easing global supply chain scenario, the demand for paper in the global market is expected to rebound in the forthcoming years. In addition to this, the North American markets are expected to remain the second largest markets for paper in the coming years.

However, Industry experts believe that the market is anticipated to experience fluctuating growth patterns.

Indias Paper industry

India is one of the largest producers of pulp and paper and it has experienced significant growth in recent years. It is a highly fragmented industry with small, medium and big mills that use a variety of raw materials including wood, bamboo and wheat straw. Various types of papers used for writing, printing and packing are produced in India. The industry contributes to 5% of the worlds paper production.

The domestic market got largely benefitted from the advancement of technology. Integration of advanced technology has helped the Indian paper manufacturers to enhance production efficiency and control the cost of production. The advanced technology and innovation also led to offer of new and value added paper products. These products meet the diversified needs of the paper packaging industry. The paper packaging industry benefitted the most in the reported year, as the government launched initiatives to minimise the use of single-use plastics. The growth of the e-commerce industry had propelled the growth of the paper packaging market in the year under review.

The domestic paper industry is expected to grow in the forthcoming years at around 7% per annum. The growth is anticipated to be driven by increased literacy rates within the country with the governments support. The adoption of the New Education Policy (NEP) is one such initiative that is expected to boost the demand for P&W papers in the economy. The growth in the Fast-Moving Consumer Goods (FMCG) market, e-commerce sectors and health sectors are expected to facilitate and sustain the growth of the industry in the coming years.

The FMCG industry will grow at a CAGR of 27.9% from 2024 to 203010 and the demand for paper packaging products is also expected to rise.

Indias retail market is expected to be valued at USD 1.1 trillion, by 2027.11

The governments launch of initiatives such as Samagra Shiksha is expected to provide a major boost to the paper industry

Demand for various environment friendly alternatives are increasing due to growing environmental concerns and the single-use plastic prohibition, accelerating the growth of the paper industry.

Increased disposable income in India is also a reason for the growth of the domestic market, thereby creating demand for paper and paper-based products. Per capita consumption of paper in India is 17 Kg in 2024-25, way behind the global average of 57 Kg which gives further impetus to growth.

Company Overview

Trident Limited (Trident) is a flagship company of the Trident Group . The Company is a vertically integrated textile and paper manufacturer. The Company has four major business segments namely Yarn, Home Textiles (bath and bed linen), Paper and Chemicals. The manufacturing facilities of Trident are located in Punjab and Madhya Pradesh.

The Company has earned global recognition for its yarn, bath linen, bedlinen, paper and chemical businesses.It is well recognised for being the worlds largest producer of wheat straw-based paper manufacturer.

The Company is known for its product quality, social responsibility and its contribution towards the environment. The Companys dedication towards sustainability and integration of advanced technologies have earned it the global recognition. Trident has devised a strategic growth plan which includes product development, world class manufacturing and brand promotion.

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