79 AN INVESTIGATION OF ENERGY MANAGEMENT PRACTICES IN SELECTED PAPER
MANUFACTURING UNITS IN MP Digvijay Singh
Research Scholar, Takshshila Group of Institution, Jabalpur (M.P.) Prof. Alok Agrawal
Asst. Prof., Takshshila Group of Institution, Jabalpur (M.P.)
Abstract - Energy management is the judicious and effective use of energy to maximize profits and minimize costs to enhance competitive positions. Energy Management is also defined as proactive, organized and systematic coordination of procurement, conversion, distribution and use of energy to meet the requirements, taking into account environmental and economic objectives. Paper industry occupies a prestigious position among the various manufacturing enterprises globally, in review of its significant contribution to the society.
The growth of the industry has been constrained due to the high cost of production caused by increase in energy cost.
The management of energy is often neglected in many paper production units even though there is a considerable potential to save energy and also to reduce cost. Through legislations, wastages can be only regulated, but through energy management, a company can ensure sustainability in energy usages. Therefore this research work investigates energy management practices in paper industries of MP, in view of associated workers and energy managers. The study is descriptive and analytical. The research problem and questionnaires are formulated and framed accordingly. To analyse the data, various statistical tools such as percentage analysis, Likert’s scale, Chi-Square test and Acceptance Index are used. Findings concluded that the energy management practices are as per the legal provisions, but they are not transparent. The need for energy management is evident from the acceptance index framed by the research.
Keyword: Energy Management Practices, Energy Conservation Act, Energy Managers, Paper Industry, Chi-square test, Acceptance Index.
1 INTRODUCTION
Paper industry is economically a global player with annual revenue that exceeds US $500 billion. Global consumption of paper and paper boards grew From 253 million tonnes in 1993 to 352 million tonnes in 2005 and to 407 million tonnes in 2014. The current consumption is 422 million tonnes per annum; roughly half of this consumption is shared by North America and Europe. However, their share has been declining since 2006 while it is steeply rising in China, India and other developing economies of Asia. With the growth in consumption, recycling of paper is a gradually growing throughout the world. At present, almost 78% of the paper produced each year is being recycled. The global demand for paper and paper board is projected at 482 million tonnes in 2030.
According to report released by Indian Paper Manufacturers Association (IPMA) Indian paper industry is one of the important industries in terms of socio- economic developmentof the country.
India’s paper production in the year 2019- 20 stood at 15 million tonnes per annum, while the installed capacity is about 17million metric tonnes, which is expected to reach 22 million tonnes per annum by 2024-25. Indian paper industry is the 11thlargest producer of paper in the world. It accounts for a significant amount of 3.7% of the global paper demand. The industry provides direct employment to 0.5 million person and indirect employment opportunities to around 1.5 million people. Most of the paper mills have been established long back. The per capita paper consumption is about 13 kg which is significantly lower than the world average of around 57 kg.
This is projected to increase to at least 17 kg by 2024-25. India’s per capita consumption is considerably lower than China’s (65 kg), Indonesia’s (22 Kg), Malaysia’s (25 kg), and of course USA’s (312 kg) consumption levels.
With the consistent growth in the literacy rate and economy, India is rated
80 as the fastest growing market for paper in
the world with the growth rate of 7% per year. The demand for paper is expected to reach 23.50 million tonnes by 2024-2025.
The top 15 paper manufacturers being IPMA members produce 3.83 million tonnes of paper, out of total production 3.37 million tonnes of papersold in domestic market while export figure was 0.46 million tonnes. The Indian paper and paper products market is projected to grow from 8.6 billion US$ in 2018 to 13.4 billion US$ by 2024. At the National level, Madhya Pradeshpaper industry stands sixth. There are 18 paper mills spread across the state which account for 6.62%
of the total installed capacity in India. All these data highlight the fact that there is a huge prospect for the growth of paper industry in state.
1.1 Objectives of the study
The following are the objectives of the research study:
1. To study the regulations and enactments relating to energy conservation and management.
2. To ascertain the need for energy management practices in the paper industry in MP.
3. To analyse the views of the employees of paper units on energy management practices.
4. To analyse the opinions of energy managers about the energy management efforts and practices of the paper units in state.
5. To offer suggestions for effective energy conservation and energy management practices in the paper industry.
2 REVIEW OF LITERATURE
Several studies were conducted throughout the world to bring out the various concepts relating to energy management and its practices. The important studies in India and abroad in respect of energy management, its related concepts and strategies are reviewed in this chapter.
Yunqi Ban (2020) developed two functions i.e. energy allocation and energy consumption prediction in energy management system. The mathematical model of energy allocation is established
and applied in the energy management system. The forecasted results can be used to better understand the trend of energy consumption of the whole company, so as to do a good decision of energy reserve and reduce unnecessary waste.
Boqiang Lin et al (2020) measured energy performance using a global meta-frontier approach founded on a non-radial distance function. Examined by statistics, the study reveals that during the implementation of low-carbon textile policies, the energy performance improved significantly, which mainly benefits from speeding up of technological innovation.
With the decomposition of the dynamic performance index into three separate components, policy-makers should prioritize the appropriate policies to attain environmental management goals considering provincial heterogeneity.
Syed RaihanHossain et al (2020) demonstrated and analysed the energy management practices in the cement industries of Bangladesh. The outcome of this study shows that there are some barriers in energy management and energy efficiency practices; Lack of staff consciousness, insufficient attention from government and bureaucratic intricacy are most significant among them. On the contrary, the most dominant drivers of energy management are risk of high energy prices in the future, highly motivated employee and high demand from
Xing Chen et al (2020) studied the regional eco-efficiency of China’s Non- ferrous Metals Industry by considering the environment and economic performance by employing non-radial distance function. The change of regional technology gap ratio and the source of regional eco-inefficiency are also explored.
Moreover, this paper analyses the evolution of regional eco-efficiency and the main factors that contribute to changes in eco-efficiency. The study suggests that strengthening scientific and technological research, promoting inter- regional technical exchanges are particularly important for eco-efficiency improvement and regional coordinated development in China’s NMI.
81 3 GLOBAL SCENARIO OF PAPER
INDUSTRY
The Global paper industry is set to grow at the rate of 2.8% each year from 2014- 2019. As per the prediction, Asia Pacific will emerge as the most promising market for Paper & Pulp Industry growing at a rate of 4.0% each year. The Paper market is surging ahead with the rise in demand.
Demand for paper in countries such as India, where booming literacy rate helps in the rise of usage in printing technology and performances are expected to drive the market further. The Indian Government's inclination towards the manufacturing of various paper products will make the industry manufacture intensive.
The demand for packing and labelling from various e-commerce platforms is also making paper Industry to boom. As most of the businesses worldwide are streamlined to online retail marketing is directly dependent on packaging products. Global Pulp & Paper industry is worth of more than $300 Billion and forecasted to touch $500 Billion soon by 2025.
3.1 Profile of Indian Paper Industries The Indian paper industry is a significant player in terms of socio-economic development of the country. It is more than a century old. As the largest producer the industry ranks 15th in the world. It accounts for about 3.7% of the world's total production of paper. The estimated turnover of the industry is INR 55,000 crore and its contribution to the national exchequer is around INR 5500 crore. The industry provides employment to more than 0.5 million people, mostly in rural areas directly and 1.5 million people indirectly. Most of the paper mills are in existence for a long time. Over the years, the installed capacity has grown from 0.15 million tonnes in the early fifties to the present level of 12.75 million tonnes which is expected to reach 22 million tonnes by 2025.
India is the fastest growing market for paper globally and it presents a positive sentiment; the per capita consumption of paper is about 13 kg, which is significantly lower than the world average of around 57 kg. India's paper
demand is set to rise 53% by 2020;
indicating scope for ample expansion. The current demand is estimated at 13.10 million tonnes with domestic production of 11.38 million tons, the export of 0.53 million tons and import of 2.25 million tons. The demand is projected to increase to 23.50 million tonnes by 2024-25; an increase of per capita paper consumption by one kg would increase the demand by about 1.25 million tonnes per year.
About 70% of the total installed capacity of paper production in India is accounted by the states of Gujarat, West Bengal, Madhya Pradesh, Orissa, Andhra Pradesh, Karnataka and Maharashtra.
Uttar Pradesh, Tamil Nadu, Haryana, Kerala, Bihar and Assam together account for about 25% of the total paper production in India. BILT (Ballarpur Industries Limited) and ITC are among the largest producers of paper and paperboard in India. Many of the existing players are increasing their capacity to meet the growing demand. The focus of the paper industry is now shifting towards more eco-friendly products and technology. Government of India has established rules and regulations to control the population and degradation of forest. These measures taken by the government have brought the significant changes in the paper industry of India.
Figure 3.1 Segments of Indian Paper Industry
Indian paper mills use a variety of raw materials such as: wood, bamboo, recycled fibre, bagasse, wheat straw, rice husk, etc. Based on the raw material utilized, the paper units can be classified into three broad categories as: wood based, agro based &recycled fibre based.
82 The Figure 3.2 shows the raw material
wise paper mills in India.
Figure 3.2 Rawmaterial wise Paper Mills In India
Table 3.1 Production of Paper, Paperboard & Newsprint in India (in
million tonnes) 2011
-12 201
3- 14
201
5-16 2017-18 Capacity 12.7 13.
55 13.9 18.4 Domestic
Production 10.1 10.
9 11.8 14.49 Exports 0.53 0.5
5 0.58 0.56 Imports 1.58 2.3
4 1.98 2.58 Domestic
Market/Consu mption (Production+Im
port+Export)
11.15 12.
69 13.2 16.51
Table 3.2 Variety wise Production &
Consumptions of Paper Paperboard &
News Print in India(in million tonnes) Producti
on Consumpti on
Newsprint 1.49 2.55
Writing and Printing
Paper 4.98 5.56
Packaging Paper /
Board 8.02 8.04
Total 14.49 16.15
Figure 3.3 Variety wise Production &
Consumptions of Paper Paperboard &
News Print in India (in Million Tonnes)
Table 3.3 Pulp & Paper industry of India
Head Unit 2017-18
Installed Capacity of Paper
and Paperboard
Thousan d Tonnes
Per Annum
4116
Production Thousan
d Tones 3660 Sales (Domestic) Thousan
d Tones 3327 Exports Thousan
d Tones 362 Capacity
Utilization % 88.92%
Table 3.4 shows the paper consumption for the period 2013- 2018.
Table 3.4 Consumption of Paper (in Million Tonnes)
Year Writing
Paper Packing
Paper News Print
Total Consumpti
on 201
3-14 4 5.4 1.7 11.1
201
4-15 4.3 5.9 1.8 12
201
5-16 4.6 6.4 1.9 12.9
201
6-17 5 7.1 2.1 14.2
201
7-18 5.4 7.8 2.2 15.4
Table 3.5 Paper Production (Million Tonnes)
Year Wood Resour ces
Agro Based Resources
Recycl ed Paper
Total Product
ion 2013
-14 3.2 2.2 4.7 10.1
2014
-15 3.4 2.3 5.1 10.8
2015
-16 3.7 2.5 5.7 11.9
2016
-17 4 2.7 6.2 12.9
2017
-18 4.4 2.9 6.8 14.1
Figure 3.4 Consumption and Production of Paper
83 3.1 Paper Industry in MP
Madhya Pradesh is one of the well- developed states in terms of industrial development. It has enjoyed a significant position in India's geopolitical space and economic progress. Logistical advantages due to presence of two international airport and several domestic airports, quality of human resources, a peaceful industrial climate and a positive work culture have strengthened state's standing in the industrial world. The State's business-friendly policies and proactive initiatives have played a key role in this resurgence.
MP continues to be one of the forerunners in the production of paper and paper products. There are 18 paper mills in operation in MP, which account for 6.62% of total installed capacity in India. The major producers are located at Shahdol, Damoh, Jabalpur, Hoshangabad, Umaria, Burhanpur, Indore, Bhopal etc. MP stands at sixth position in terms of production at national level. As the country's forest cover is much below the desired level, the Government of MP established Nepa mills limited in 1956 to manufacture newsprint and paper. This is the oldest newsprint paper mill in India. MP is engaged in the manufacturing of writing and printing paper (WPP) and news print paper. It is the 2nd largest producer of WPP in central India next to Uttar Pradesh and has the largest paper plants in terms of capacity. MP is also one of the largest producers of bamboo and bagasse-based paper.
The Figure 4.5 shows the raw material wise paper mills in Tamil Nadu.
Figure 2.5 Rawmaterial wise Paper Mills in Tamil Nadu
Table 3.6 List of Paper Manufacturing Companies in MP
S. No. Company Name 1 Nepa Limited, Burhanpur 2 J. K. Paper Limited, Damoh 3 Amrit Papers Private Limited, Indore 4 Jabali Papers Limited, Jabalpur 5 Silver Paper Mills, Katni 6 Orient Paper Mills, AmlaiShahdol 7 Security Paper Mill Hoshangabad 8 Vindhya Boards Pvt Limited, Satna 9 Century Paper Ind. Jabalpur 10 Aashirwad Paper Mills Bhopal 3.2 Energy Profile
Energy is one of the major inputs for the economic development of any country. In the case of the developing countries, the energy sector assumes critical importance in view of the over-increasing energy needs, requiring huge investments to meet them. The consumption of energy is increasing at a fast pace while available resources remain limited. The global need for energy is increasing on an average by about 1.5% every year. Out of the total amount of primary energy, around 80%
comes from fossil fuels, particularly oil, is not sustainable in the long term. Energy consumption has a significant impact on our natural environment. There is clear evidence that climate change is caused by human activity, mostly related to the use of Paper Industry- Energy Profile
The Paper industry is highly energy intensive and is the sixth largest consumer of commercial energy in the country. Larger paper plants generate part of their own power through cogeneration, while smaller plants depend exclusively on purchased power. The energy cost as a percentage of the manufacturing cost has been increasing several fold in the last decade, Energy has a lion's share in the total manufacturing cost in the majority of the sectors like Aluminium, Cement, Paper and Ceramics.
Table 3.7 shows the share of energy in the manufacturing cost for a few industrial sectors.
84 Table 3.7 Energy Share in
Manufacturing Cost S.
No. Sector Energy Cost as % of Total Manufacturing Cost Ra
nk 1 Aluminiu
m 60-70 I
2 Cement 35-40 II
3 Paper 22-25 III
4 Glass &
Ceramics 20-25 IV
5 Foundry 15-20 V
6 Textile 12-15 VI
7 Ceramic 10-15 VII
8 Engineeri
ng 08-10 VII
I It is evident from table 3.7 that the percentage of energy share in manufacturing cost of paper industry is 22-25% which stands at third position while comparing with other sectors in India.
The energy cost, as a percent of manufacturing cost, which was about 15% a few decades earlier is presently about 25%. This is mainly due to the increase in energy prices. Coal and electricity are the two major energy sources used in the paper manufacturing process. Other fuels, such as low sulphur heavy stock (LSHS), furnace oil, etc. are also used for captive power generation in diesel generator sets in plants. Steam and electricity consumption per tonne of paper is 11-15 tonnes and 1500-1700 kWh respectively in Indian paper mills. The total specific energy consumption of pulp and paper industry ranges from 31 to 52 GJ (Giga Joules) per tonne of product.
Since the expenditure on energy ranks next to the raw materials in the manufacture of paper, energy conservation and management is strongly pursued as one of the attractive options for improving the profitability in the paper industry.
3.3 Energy Conservation Potential Vs.
Profitability
The ultimate goal of top management is to enhance profitability. This gives a competitive edge in a market where the consumer drives the cost of the product.
There are many success stories where corporates have addressed the energy conservation issue in all earnest and achieved a substantial increase in profitability.
Table 3.8 illustrates the saving potentials available in a few sectors and their impact on its profitability.
Table 3.8 Energy Saving Potentials &its impact on Profitability
S.
No
. Sector % Saving Potential
s R an
k
% Increase In Profitability
R an
k 1 Alumini
um 15 II 9 I
2 Cement 15 II 5 II
3 Paper 20 I 5 II
4 Glass &
Ceramic s
15 II 3 III
5 Foundr
y 20 I 3 III
6 Textile 20 I 3 III
7 Ceramic 15 II 2 IV
8 Enginee
ring 10 III 1 V
From Table 3.8 it is evident that there is a scope for the paper industry to reduce it's the energy consumption by 20% which would increase its profit by 5%.
Comparing to other sectors in India, paper industry stands first place in terms of energy saving potentials and second place in terms of improvement in profitability.
4 EMPLOYEE'S OPINION ON ENERGY CONSERVATION PRACTICES
Table 4.1Classification of Sample Respondents based on Gender Sl.
No. Gend
er Number of
Respondents Percentage to Total
1 Male 220 73.3
2 Fema
le 80 26.7
Total 300 100
Table 4.2 Age Group of Sample Respondents
SI.
No. Age (in
Years) No. of
Respondents Percentage to Total
1 35- 40 36 12
2 41-45 75 25
3 46-50 120 40
4 Above 50 69 23
Total 300 100
Table 4.3 Marital Status of Sample Respondents
Sl.
No. Marital
Status Number of
Respondents Percentage to Total
1 Married 266 88.67
2 Unmarrie
d 34 11.33
Total 300 100
85 5.1 Energy Manager’s Opinion on
Energy Management Practices Table 5.1 Level of implementation of
energy policy Sl.
No. Level of
Implementation No. of
Units Percentage to Total
1 Managers 2 20
2 Supervisors 6 60
3 Workers 2 20
Total 10 100
Table 5.2 Level of dissemination of energy policy information Sl.
No. Level of
Dissemination No. of
Units Percentage to Total
1 Executives 5 50
2 Supervisors 3 30
3 Workers 2 20
Total 10 100
Table 5.3 Employees' awareness on energy policy
Sl.
No. Proportion of
Awareness No. of
Units Percentage to Total
1 Above 75% 4 40
2 51-75% 5 50
3 Below 50% 1 10
Total 10 100
6 SCOPE FOR FUTURE RESEARCH A detailed research study may be undertaken to investigate the energy management practices.
Comparative study on Energy management practices between two industries
Energy management practices of private and public companies shall be analysed comparatively.
Energy awareness programs and its results carried out by different organisations must be investigated.
Stake holder’s opinion on energy management must be researched.
Energy management practices adopted by foreign companies in India and Indian companies must be comparatively analysed to get fruitful outcome.
7 CONCLUSION
The present study concludes that the energy management can make the employees to practice conservation and effective utilization of energy. The employees' views disclose that the continuous training programs given by the energy managers will develop energy saving attitude. The respondent energy managers also accepted the fact that the energy management practices are as per the legal provisions, but they are not transparent. The need for energy management is evident from the acceptance index framed by the research.
The energy management practices and the positive attitudes of the employees will result in energy conservation and sustainability.
