PULP & PAPER INDUSTRY IN PAKISTAN 5.3.2014

PAKISTAN’S PULP & PAPER MARKET OVERVIEW 1.2 Mio. ton paper & paperboard market, of which around 30% is imported Local production dominates due to high import duties for paper (20-25%) and ongoing anti- dumping investigations Imports mainly in higher value added products such liquid packaging board (from Sweden) and coated paper/paperboards (from China, South Korea) No larger scale exports Local paper & board capacity is 1.0 Mio. tons, largest product area container boards. Main challenge for the domestic industry is lack of reliable energy supply Paper & board consumption per capita 7-8 kg per annum Raw materials used; imported wood pulps, domestic OCC/ONP and non-wood materials (mainly wheat straw). Only one domestic wood based pulp mill, currently non-operational Industry concentrated in the vicinity of Lahore in Punjab Several companies planning rebuilds & new investments

INDUSTRY CONCENTRATION CLOSE TO LAHORE IN PUNJAB STATE Main reasons for this; Non-wood raw material such as wheat straw availability; still used in paper manufacturing & energy production Availability of water Largest market area; Punjab State has 90 Mio people of Pakistan’s total 200 Mio. All agricultural raw material based manufacturing concentrated in Punjab Punjab offers a good access to Northern Pakistan & Afghanistan market

FUTURE DIRECTION OF THE INDUSTRY Stora Enso’s joint venture Bulleh Shah Packaging will be setting quality benchmark for the local manufacturing Existing producers seeking knowledge transfer, rebuilds and improvements in their process, raw material and energy efficiency Main domestic product focus areas; recycled fibre based testliner/fluting, WLC (white lined chipboard), wood fibre based copy paper Tissue consumption at nascent state, but rapidly increasing New domestic entrants to P&B industry looking for paper/board machinery and collaboration partners

MAIN BUSINESS OPPORTUNITIES FOR NORDIC SUPPLIERS Paper & Board and pulping machinery Improved cost competitiveness: Energy and Paper/Board process efficiency Solutions increasing fibre yields of domestic recycled fibre Products’ raw material mix improvements Energy and Paper/Board manufacturing solutions from biomass (wheat straw, rice husk, bagasse etc.) CTMP and softwood pulp supply

PAKISTAN’S PAPER & BOARD MANUFACTURERS Bulleh Shah Packaging Pvt. Ltd. , Stora Enso & Packages Ltd joint venture (capacity around 200,000 tons), located 45km from Lahore Century Paper & Board Mills (capacity 230,000 t/a), located 50km from Lahore (www.centurypaper.com.pk) Flying Group of industries (capacity close to 100,000 t/a), (www.flyingpaper.com.pk) Flying Paper Industries, located in Sheikpura, Punjab Flying Kraft Paper Mills, located in Charsadda Zaman Paper & Board Mills located in Sheikpura, Punjab Premier Paper Mills (capacity 25,000 t/a), Sheikhupura, Punjab, (www.premiergroup.com.pk) Other smaller producers: Malik Board, & Paper Industries, Hassan Board, Nazir Paper Mills, Taj Paper Mill, Mandiali Paper Mills, Jubilee Paper Mill, Horizon Paper Mill, 6

PAKISTAN’S PAPER & BOARD MANUFACTURERS Map showing the locations of the main paper & board manufacturers in Pakistan Proximity of the city of Lahore in Punjab province, accounting more than 90% of the installed capacity Selected smaller and lower quality producers 2 1