Paper Industry Supply and Demand Issues in Bangladesh

He begins by explaining that even though production began seven decades ago, the Bangladesh paper industry faces long-term diminishing results without thinking outside the traditional box. When the Daud Group established the Karnafuli Paper Mills (KPM) in Chandragona (Chittagong) in 1953, bamboo and hardwood were the basic raw materials from a paltry forest coverage that has also been declining in size ever since. If that was not enough, with more than a hundred-odd paper mills today, the industry faces a domestic demand that has spiraled out of control. Not only has the population almost quadrupled since the beginning, but the per capita consumption has also exploded given the shift from a traditional society, the absence of a conservational instinct, and the scavenging effects of the Internet era. In short, a Taka 25 billion industry capable of producing half a million tons of paper annually and employing just under 30,000 people (accounting for almost 1.0 per cent of the country's labor force), finds itself stuttering with the old model.

Hussain asks: How did we get where we are without taking precautionary measures? What do we do to get out of the plight? Thinking outside of the box is not a cliché. It holds the answer to preserving our forestry by adopting tree-free alternatives and fine-tuning our lifestyles.

In addition to the 1953 KPM emergence with a 30,000 metric ton) capacity, the Khulna Newsprint Mills (KNM), adding another 50,000 MT, saw us through the Pakistan years, located as they were, close to our major forest areas. Since independence, the Bangladesh Chemical Industries Corp. opened the North Bengal Paper Mills (NBPM) in 1973, the Sylhet Pulp & Paper Mills (SPPM) in 1975, and the Magura Paper Mills (MPM), adding 50,000 metric tons in all. Except for the KPM plant, all others disappeared or were transformed as about a 100-odd new mills invaded the industry, reducing the once-iconic KPM share to less than 5.0% of the market. Interestingly, whereas KPM production still relies on domestic inputs, the private companies look abroad for them or turn to recycling. Meghna Group (Dhaka), Bashundhara Paper Mills (Munshiganj), and T.K. Paper (Kalurghat, Chittagong) have slowly emerged among the production leaders, while Base Textiles (Dhaka) and Uttara Motors (in Dhamrai, Manikganj), as Dr. Shaheed Mohammed Jalil noted in this newspaper (March 16, 2013), set the innovative pace.

Both innovation and energy diversification are central to salvaging the country's paper demands. Innovation means turning away from our meager forest resources. Based on research whose findings were presented at the 2003 World Forestry Congress, M. Sarwar Jahan made the case for non-wood (or agro-based) fibers, which, he then estimated, supplied 11% of the pulp production worldwide, with China and India as industrial monopolists. He particularly pointed out the promises offered by jute (both wood and fiber), straw from grains (rice and wheat), cotton stalks (which is a leftover farmers typically burn), bagasse (by-product of sugar), and dhanicha (used against beach erosion). He further calculated how much are typically available each year: rice straw leads the list with 11,000 metric tons, bagasse comes next with 1,200 metric tons, wheat straw 1,000, jute 812, dhanicha 50, cotton stacks 36, and corn stalks 20. Since these are all renewable annually (some biennially), and simultaneously serve as inputs of other industries (food, textiles), what had hitherto been largely inefficient paper production gets revitalized even more effectively, rather than add to waste (for example, be burned, thus aggravating environmental damage in addition).

Much more attention must be paid to lifestyle changes, Hussain points out. Recycling, for example, is virtually absent in the country, but with conscious efforts, a lot more can be recovered from waste to fuel future production--like cotton stalks, even clothes, torn rope, used paper and boxes, as well as cane residues. Base Textiles's deinking technology and Uttara Motors's security paper in the former SPPM facility exemplify cross-industry fertilization of future value, but, since they also assume the availability of paper, only alternatives that are tree-free can guarantee that.

Complementing innovation and lifestyle changes is the effort put into making more efficient usage of limited energy supplies. Engineer Anwar A. Khan advocates expanded cogeneration usage in paper mills--using low pressure steam for process heat (cooking and chemically treating raw materials), and high pressure steam for electricity (pulping), with three-quarters of the energy going into the former, the remainder for the latter. He notes cogeneration has already permeated some of the plants, and although up to 35 metric tons are already being generated, he reckons this could easily be expanded to 50 metric tons.

According to Dr. Engineer M.M. A Quader, one out of every 10 acres of the country, mostly in the hilly regions, has been underutilized, unused, or used inefficiently. Though the country's demand of 700,000 metric tons annually falls short by 100,000 metric tons, huge future increases require better utilization of this 10% of land. Not only that, but also to produce more virgin fibers (wood and pulp), since the KPM facility continues to be the only pulp plant in the country--changing this, not just by increasing pulp mills, but also recycling, and then, if necessary, importing pulp. All other plants manufacture only paper and board. He counted and listed 71 from 2011, with a daily output of 2,023 metric tons, while six were then envisaged with a net 450 metric tons of daily capacity.

Of course, modernizing existing machines also continues, as exemplified by T.L. Paper becoming the largest paper mill in the country and Bashundhara's massive expansion. Though these actions reinforce the old model, as Shaheed Mohammed Jalil also noted, "our imports declined by 20% by 2013, precisely because of sprucing up traditional approaches and experimenting with the new. If these continue, the decline of imports would help us balance the trade account-book and, in the best case scenario, enhance the export ledger.

The best years of the potentially Taka 60 billion industry might still lie ahead, even for a country with a breathtaking growth-rate record. What is at stake is not so much production enhancement as consumption patterns being reordered. While the next (and second-last) industry to be examined in this series, the ready-made garments (RMG) sector provides information about what has worked better in the production side of the ledger, with an emphasis on quantity. The paper industry joins hands with the pharmaceutical to expose both the quality and eco-friendliness of consumption as necessary steps toward finessing production inputs and technologies.