 Mind
your business
Good environmental performance makes good business sense. And to support
this rationale, CSE analysed the financial performance of the 28 firms that had been
rated. The conclusion: there is a 60 per cent likelihood of a mill with fairly good
environmental performance churning out profits (see graph: Pollute or profit?).
The best performers environmentally are financially sound too.
Take, for instance, J K Papers, the mill with the highest GRP score. The company enjoys a
profit of 14 per cent (gross profit as percentage of turnover).
Pollute or
profit?
Green mills are fiscally sound too |
 |
However, the GRP team also found a few companies — such as
Grasim Industries Ltd which has a profit margin of 16 per cent — otherwise rated at
the bottom for their environmental performance. This is a clear indicator that the profits
that the company earns are not being used to improve their environmental performance. This
despite the public uproar against the company on environmental grounds.
Land marks
Fibre requirements of the pulp and paper sector are met by
bamboo, hard wood, agrowaste and wastepaper. The amount of land required by a mill to meet
its raw material needs equals the ecological burden that the mills’ fibre sourcing
has on the environment.
Gobblers
Land needed by mills to produce one tonne of paper |
| Company |
Ecological
footprint
(hectare) |
| BILT-Ballarpur Unit |
4.85 |
| The West Coast Paper Mills Ltd |
1.3 |
| Indian average |
2.17 |
The average Indian mills footprint is 2.17 hectares (ha) for every
tonne of paper it produces. Taking the total annual production of paper to be around 3.2
million tonnes, the total land requirement of the Indian pulp and paper sector would be
6.4 million ha. With farm forestry programmes, that provide incentive to producers to
supply raw materials, this requirement can be easily met. India has over 60 million ha
under forest land and more available under private wasteland.
On the other hand, companies like Amrit Papers, Nath Pulp and
Paper Mills and Rama Newsprint, which are in the bottom of the rating, are also running in
losses. It’s time they realised environmental performance and financial performance
goes hand-in-hand.
Small farms, big gains
Farm forestry brings huge benefits for ITC-Bhadrachalam and APPML
The 1988 National Forest Policy (NFP), among other things,
envisaged a forest cover of 33.3 per cent of the total land area. Sadly, it has remained
just a vision. Down to a paltry 11.7 per cent, there is further threat that this may reach
a single digit figure. With its insatiable demand for wood fibre, the pulp and paper mills
are also to be blamed for the fast-depleting forest cover.
 The NFP’s ban on the use of government forest land for raw material
sourcing has not been able to stop some mills from meeting their fibre needs from these
forests. And besides a few, there are hardly any mills who have taken the NFP’s
direction of turning towards farm forestry (where small growers supply wood in the open
market). While farmers get an income from their land, a regular supply of wood is ensured
to the company through farm forestry. At the same time, it discourages cutting of native
forests for fuel and other uses by the local community and helps in preserving the natural
forest.
Andhra Pradesh Paper Mills Limited and ITC-Bhadrachalam, both in
Andhra Pradesh, are two companies who have followed NFP’s suggestion and have
benefited from the schemes.
itc-Bhadrachalam has been carrying out farm forestry programmes
since 1982. With a view to provide the farmers with a comprehensive package of
high-quality nursery stock, technical help, buy-back guarantee and financial assistance
for raising and maintaining the plantations, the farm forestry scheme was further
strengthened in 1987. In 1997-98, as much as 66.15 per cent of the total raw material
requirements was met through these schemes. Between 1987-95, it promoted farm forestry
plantations in 1,138 villages in Andhra Pradesh and helped 6,185 farmers to raise farm
forestry over 7,441 hectares of land.
APPML initiated farm forestry scheme way back in 1977, but it
gained momentum in 1989. More than 1,500 hectares of land in six districts have so far
been covered under the scheme, and thousands of farmers have benefited from it. The scheme
focuses on tree species like subabul and casuarina. The mill has already set
up 153 nurseries and prepares seedlings in its own nurseries and distributes it to the
farmers. |
The problem of
diversity
Product diversity means more pollution
 The more the variety of products a
pulp and paper mill manufactures, the higher the pollution it generates. At least, this is
what happens in India where the level of technology is very poor. Most of the Indian mills
are small and they change their product type depending on the demand in the local market.
However, the small-size of the mill does not make it profitable to switch to a technology
which is best suited to make the required type of paper. Ill-suited and obsolete
technology adds to the pollution load.
The problem of product diversity is not just limited to production
technology. Most of the Indian mills do not have adequate technology to recycle their
wastes. Effluent treatment plants (ETPS) are capable of handling discharges and emissions
emerging from single-product paper plants only. With an increase in the types of paper
produced, the efficiency of the ETPS plummets.
Production of single product gives competitors an edge in terms of
optimisation of processes. Global giant International Papers and Indonesian major Asia
Pulp and Paper, which is the parent company of Sinar Mas-India, are both producing single
paper. Besides, their production is not dependent on the vagaries of a local market, but
on the global market, where there is comparatively less variation in the demand for a
product-type. Besides, their large size gives them the opportunity to adopt cleaner
technology, which also includes a factor of safety for product variations.
But, in India, small, unregulated mills usually cut into the
pockets of bigger mills, forcing the latter to move away from limited number of products
to a variety of products.
In search of fibre...
... mills have now reached the rich bamboo reserves in the country’s
Northeast
The paper industry has literally come a long
way with respect to raw material sourcing, specifically fibre. When paper mills were first
set up they were able to procure most of their wood from forests in the vicinity. However,
over a period of time the forests were depleted with no sustainable forestry practices
being adopted. This forced mills to extend their search for wood to neighbouring states.
As these forests have also met with a similar fate, paper units are now moving to the
veritable treasure trove in the country’s Northeast.
 For instance, Andhra Pradesh
Paper Mills Limited (APPML) located in the East Godavari district. Almost 80 per cent of
the total raw material comprises hardwood, 19 per cent bamboo and the rest wastepaper and
market pulp. Although APPML has been able to meet most of its hardwood demand from its
farm forestry programmes and open market, it still depends on natural forests for bamboo.
The unit’s bamboo consumption varies between 15-20 per cent of the total requirement.
Till recently, APPML procured its bamboo needs from Andhra Pradesh government forests.
After protests by local ngos, the government was forced to withdraw the allotment in 1998.
This has forced the mill to turn to the neighbouring states for bamboo, or even the
distant Northeast — the only region in India which still has bamboo reserves (see
map: Bamboo travails). Going by APPML’s and other mills appetite for fibre,
soon those reserves too might not be worth talking about.
Indian mills use 250-300 cubic metres of
water to produce 1 tonne of paper, according to CSE estimates
Water, water everywhere
Indian mills continue to waste water
resources
The people living in Amlai, Madhya Pradesh, demonstrate
against Orient Paper Mill, which they allege dam the river Sone for nine months in a year
to meet their water requirements
|
Today, almost a decade later, the water consumption pattern has
not changed much. According to the CSE study, on an average, large-scale Indian mills
still consume about 250-350 cum of water per tonne of paper produced. Water consumption
patterns and effluent discharges of Indian mills still vary substantially from mill to
mill, even when the same process and equipment is used, which should not be the case. In
contrast to the Indian scenario, the average water consumption in US mills has come down
from 142 cum per tonne of paper produced in 1989 to 72 cum in 1995. The poor showing of
the Indian mills can be blamed on the water-pricing policy of the government. Water
literally comes dirt cheap to the mills so there is no attempt to regulate its use. |
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Key Findings |