Analysis of the Bleached Pulp and Cottonine Market in India
Update period 10 days.
The relevance of research
Bleached pulp and cottonine are used in various industries, these include: medicine, automotive and aircraft manufacturing, textile industry, pulp and paper, paint and varnish, chemical industry, military industry, packaging production.
Bleached cellulose is mainly used in the paper industry for the production of offset, newsprint, writing paper, kraft paper, parchment and subparchment, base paper for the production of toilet paper, paper towels and napkins. The markets for bleached pulp and cottonine in this study are understood as the totality of enterprises engaged in the production of bleached pulp and cottonine; enterprises that form the supply of these markets; consumer enterprises using the above products that form demand; as well as their relationships arising between sellers and consumers within the geographical limits of India
Purpose of the study
Analyzing the state of the bleached pulp and cottonine market in India, assessing the market size, analyzing competitors, and identifying factors affecting the bleached pulp and cottonine market
Content
1. Overview of the Bleached Pulp and Cottonine Market in India
1.1. Main characteristics of the market
1.2. Volume of production
1.3. Share of exports in production
1.4. Market share of imports
1.5. Market Volume Dynamics 2018–2020 Potential market capacity
1.5.1. bleached pulp
1.5.2. Cotonina
1.6. Current trends and development prospects of the studied market
1.7. Assessment of factors affecting the market
1.7.1. Social factors
1.7.2. Technological factors
1.7.3. Economic forces
1.7.4. Political factors
1.7.5. Conclusions about the influence of factors on the market
1.8. Bleached pulp and cottonine market structure by Union Territories in 2020
1.9. State industry support programs, import substitution
1.10. Analysis of sectoral indicators of financial and economic activity
2. Analysis of bleached pulp and cottonine TOP 5 producers in 2020
2.1. The level of competition in the market
2.2. Major players in the market
2.3. Market shares of the largest competitors
2.4. Production volumes of the largest competitors
2.5. Analysis of the product range
2.6. Strengths and weaknesses of competitors
3. Consumption analysis
3.1. Market saturation
3.2. Key consumer trends in India
3.3. The largest consumers in 2020
3.4. Analysis of the results of tenders for the purchase for 2020–2021
4. Price analysis of bleached pulp and cottonine
4.1. Prices of domestic producers
4.2. Analysis of prices for imported products
5. Analysis of the industry in a crisis
6. Forecasts and conclusions
6.1. Barriers in the market
6.2. Market Growth Drivers
6.3. Market development forecast until 2025
Research excerpt
1. Overview of the Bleached Pulp and Cottonine Market in India
1.1. Main characteristics of the market
Consider the characteristics and features of the bleached pulp and cottonine markets in India.
The markets for bleached pulp and cottonine in this study are understood as the totality of enterprises engaged in the production of bleached pulp and cottonine; enterprises that form the supply of these markets; consumer enterprises using the above products that form demand; as well as their relationships arising between sellers and consumers within the geographical limits of India.
The production of bleached pulp and cottonine in India is carried out by enterprises of various industries (timber industry, agriculture, light industry), which operate mainly according to OKVED2 codes:
- 17.11 ""Production of cellulose and wood pulp"";
- 13.10 ""Production and spinning of textile fibers"";
- 01.1 ""Growing of annual crops"";
- 01.16 ""Cultivation of fibrous spinning crops"".
Foreign economic activity is carried out according to the TN VED codes: 470321 ""Wood pulp, soda or sulfate, except for soluble grades, semi-bleached or bleached, from coniferous species"", 470329 ""Wood pulp, soda or sulfate, except for soluble grades, semi-bleached or bleached, from hardwoods 470421 “Wood pulp, sulphite, other than soluble grades, semi-bleached or bleached from softwood”, 470429 “Wood pulp, sulphite, other than soluble grades, semi-bleached or bleached, from hardwood”, 5301 “Raw flax or processed flax, but not spun; tow and waste of flax (including spinning waste and garnetted stock)”, 5302 “Hemp (Cannabis sativa L.), raw or processed but not spun; hemp tow and waste (including spinning waste and garnetted stock)”, 5303 “Jute and other textile bast fibers (other than flax, hemp and ramie), raw or processed but not spun; tow and waste of these fibers (including spinning waste and garnetted stock).
Bleached cellulose is a pulp obtained by mechanical grinding of pulpwood, wood chips, shavings and waste, followed by cooking in a pressure vessel with the addition of:
- cooking liquor based on sodium hydroxide (soda cellulose) or a mixture of sodium hydroxide and sulfite liquor on a sodium base (sulphate cellulose);
- bisulfite cooking solution. Commonly used bisulfites are ammonium, calcium, magnesium and sodium (sulfite cellulose).
Pulp in India is produced mainly from wood, but there are also companies that produce bleached pulp from bast crops. For example, cellulose from flax is produced and sold by the Kashin flax mill. According to the company, flax pulp is of very high quality and is used in the production of cigarette paper, hygiene products and banknotes. The cellulose content in flax fiber can reach 90%, while in hard and soft wood it is 50–54%.
According to Roslenkonoply, cottonin, or cottonized flax or hemp fiber, is a product of special processing, as a rule, of short fibers and tows of fiber flax and hemp, as a result of which the bast bunches of plants are modified in length to complexes of elementary fibers, the length of which should be similar ( before entering the spinning chamber) with fibers to be mixed. In the production of cottonin, raw bast, after being roughly cleaned from the fire, passes through a line of successive nine-sawed rollers and turns into a fine-fibered, cotton-like material, reminiscent of natural cotton (cotton) in spinning properties. Therefore, cottonine is suitable for the production of blended yarn with cotton, wool, viscose, polyester using classical cotton and wool spinning technologies, which are more economical and productive than the classical method of spinning flax and hemp.
The domestic textile industry depends on the import of cotton fiber, since cotton is practically not grown in India. Cotonin is a substitute for cotton fiber, which makes its production more and more interesting for textile manufacturers due to the devaluation of the Indian rupee and the increase in prices for imported cotton.
Bleached pulp and cottonine are used in various industries, these include: medicine, automotive and aircraft manufacturing, textile industry, pulp and paper, paint and varnish, chemical industry, military industry, packaging production.
Bleached cellulose is mainly used in the paper industry for the production of offset, newsprint, writing paper, kraft paper, parchment and subparchment, base paper for the production of toilet paper, paper towels and napkins. Chemical processing cellulose is used as a source of fiber in the production of products such as man-made fibers, cellulose-based plastics, varnishes and explosives. Cotonin is used in light industry, chemical, automotive, construction (heaters and noise insulation), medical industry and other areas.
The production of bleached pulp as a whole is provided with its own raw material base, the production of cottonine requires the development of agriculture in the field of growing bast crops, in particular flax and hemp. The bleached pulp market has a fairly high share of product imports, and India is also dependent on cotton fiber imports, since there are still not many Indian enterprises engaged in the production of cottonine, which, according to its characteristics, is capable of replacing cotton fiber to one degree or another. The Indian cottonine market is just beginning to emerge in industrial volumes. The key factor hindering the development of the production of natural fibers in India was the lack of its own raw material base of cotton, which did not allow Indian producers to compete effectively with companies from Central Asia. The introduction of cottonization technology is a strategic task for the development of light industry and reducing dependence on imported cotton.
1.2. Volume of production
For the analyzed period 2018-2020. According to Rosstat and GidMarket estimates, bleached pulp production in India ...
Diagram 1. Dynamics of bleached pulp production, India, 2018-2020, million tons
Cottonine in India during 2018-2020 produced from flax, during the analyzed period, the volume of production increased ...
The volume of cottonine production is growing, firstly, due to an increase in demand for it under the influence of an increase in the price of imported cotton (India does not grow cotton and depends on imports) due to the devaluation of the rupee. Secondly, in connection with the state's focus on the development of agriculture and light industry in the field of growing and processing bast crops, modernizing existing and building new industries.
1.3. Share of exports in production
The share of exports of bleached pulp in production in physical terms during the analyzed period 2018-2020. ...
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1.4. Market share of imports
A feature of the Indian bleached pulp market is that it is dependent on imports.
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1.5. Market Volume Dynamics 2018–2020 Potential market capacity
1.5.1. bleached pulp
Indian Bleached Pulp Market Size...
Diagram 7. Dynamics of bleached pulp market volume, India, 2018-2020, thousand tons
Potential market capacity
Potential market capacity is the maximum volume of sales that can be achieved within a certain period. Potential market capacity is an abstract, theoretical value when consumers buy only a given product (do not purchase substitute products), and use it to the maximum extent. Knowledge of potential capacity is necessary for companies to understand the possibilities and degree of market saturation.
Potential market capacity is an indicator in marketing that shows the limit of the market, its potential maximum. The potential market capacity has no actual connection with the concept of the real market volume, but only shows the maximum market in ideal conditions.
The potential capacity of the Indian market for bleached pulp is ~8,8 million tons. For the most part, the achievement of the potential of the bleached pulp market and its qualitative development is constrained by the use of unbleached pulp in the industrial production and higher prices for bleached pulp.
1.5.2. Cotonina
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The Indian cottonine market is at an early stage of development. The main advantage of cottonine production in India is that it can replace imported cotton, which is grown in India in small quantities. Cottonine has the potential for import substitution of cotton fibers, as well as for the development of exports, therefore, for market analysis, it is important to assess not only the volume of the cottonine market, but also the volume of the cottonine market in combination with cotton fibers.
Diagram 9. Dynamics of the market volume of cottonine and cotton fibers, India, 2018-2020, thousand tons
During the analyzed period 2018-2020. the volume of the cottonine and cotton market decreased by ...%, which is due to the fact that cotton exporting countries are gradually increasing the processing of raw cotton into yarn and fabrics within their countries, in connection with which the import of finished products - cotton threads, yarn and fabrics - is growing with a decrease in imports of cotton fiber.
Potential market capacity
Forecasting potential market capacity is a hypothesis about the possibility of the volume of sales that could be achieved if each potential consumer of a product were a real consumer, used a product or service at every opportunity to use it, without limitation, and at each use, would use it to the maximum volume for yourself.
1.6. Current trends and development prospects of the studied market
Consider the current trends in the market under study.
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The prospects for the development of the studied market include the following areas.
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1.7. Assessment of factors affecting the market
1.7.1. Social factors
Population
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COVID-19
The bleached pulp and cottonine markets have been significantly impacted by the COVID-19 pandemic. Businesses have been vulnerable to the coronavirus crisis due to the fact that the majority of employees in companies are employed directly in production, and work is often difficult or impossible to be done remotely. In addition, it is not always possible in principle to ensure social distancing in the workplace.
During periods of restrictive measures, there were observed: a decrease in demand, a shortage of personnel, limited supply and forced closure of enterprises, which hinders the development of the studied markets. In addition, some companies have experienced major disruptions in the global supply chain for products, machinery and equipment.
During the pandemic, manufacturers will receive state support, which will move to closer coordination with the public sector, which will allow them to regulate production.
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1.7.2. Technological factors
The production of vegetable bleached pulp and cottonine is preceded by the collection of raw materials - hemp or flax.
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The dependence of the industry on imported equipment has a negative impact on the development of the market under study.
1.7.3. Economic forces
GDP
The dynamics of GDP is a determining factor in the development of the country's economy, it forms the main trends in consumer effective demand and economic activity in industries.
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US dollar rate
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Inflation
According to Rosstat, inflation in India in 2020. amounted to ...%.
Diagram 15. Dynamics of inflation in India, 2016-2020, %
Growth of acreage of technical hemp and fiber flax
According to Rosstat and Konoplex, the last five years have seen an increase in the total area under industrial hemp in India.
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The largest sown areas of technical hemp in India are located in the Volga Federal District.
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Investment projects
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1.7.4. Political factors
State support for enterprises:
- since 2018 enterprises are reimbursed ...% of direct costs incurred in the construction of flax and hemp processing enterprises;
- soft loans are provided.
- in the regions, unrelated support is provided at the rate of 10 rupees per hectare of fiber flax and hemp sown area;
- since 2017 in India, subsidies appeared to support elite seed production;
- since 2019 - subsidies for agricultural machinery and equipment. According to the Ministry of Industry and Trade, in the next three years, it is planned to allocate ...
- ...
State support measures have a positive impact on the development of bleached pulp and cottonine markets.
1.7.5. Conclusions about the influence of factors on the market
Let's analyze the impact of the above economic, social, political and technological factors on the markets under study in the framework of the STEP-analysis.
Table 1. STEP Analysis of Factors Affecting Bleached Pulp and Cottonine Markets
According to the results of the performed STEP analysis, macro-environmental factors have a more positive impact on the markets for bleached pulp and cottonine.
The economic factor, as the growth of the dollar exchange rate, has a multidirectional effect, on the one hand, it is negative, affecting the growth of enterprises' expenses for the purchase of imported equipment and machinery, on the other hand, it is positive, opening up opportunities for the export of bleached pulp and cottonine, the growth of export earnings in the context of the devaluation of the Indian rupees. Growing inflation has a negative impact on the market. The recovery of the Indian economy and the projected GDP growth, the development of acreage of technical hemp and fiber flax, the implementation of new investment projects for the cultivation and processing of technical hemp have a beneficial effect on the development of the market.
Political factors: government support measures, concessional lending and leasing have a direct impact, stimulating the development of markets.
The bleached pulp and cottonine markets are most influenced by economic and political factors, which will have a greater positive impact.
1.8. Bleached pulp and cottonine market structure by Union Territories in 2020
Let us consider the segmentation of the bleached pulp and cottonine markets by union territories.
Chart 18. Bleached pulp market structure by Union Territories, 2020
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1.9. State industry support programs, import substitution
In recent years, the state has created many tools to support manufacturers of bleached pulp and cottonine, which relate to the branches of the timber processing complex, agriculture, light industry: subsidies, soft loans and much more. Let's analyze the main measures of state support, which are presented in the table below.
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1.10. Analysis of sectoral indicators of financial and economic activity
Let's consider the financial and economic indicators of bleached pulp and cottonine producers and compare them with the situation in the Indian economy (with dynamics in all industries).
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The decrease in the gross margin of bleached pulp producers over the analyzed period indicates an increase in direct costs in the cost of bleached pulp.
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In general, negative or low profits deprive companies of sources of development, including equity and borrowed funds.
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The cottonine industry is still in negative pre-tax profit and equity ratio due to the recent start of cottonine production in India and the industry's high leverage. Also, the presence of a large amount of receivables from some enterprises and long periods of its turnover has a negative impact on the industry as a whole. Nevertheless, indicators of current and absolute liquidity in the industry of cottonine production are within the normal range.
2. Analysis of bleached pulp and cottonine TOP 5 producers in 2020
2.1. The level of competition in the market
Assess the level of competition in the market. To determine the degree of market concentration, the Herfindahl-Hirschman Index (HHI) is used.
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2.2. Major players in the market
The largest companies in the Indian bleached pulp and cottonine markets are presented in the tables below.
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2.3. Market shares of the largest competitors
To conduct a competitive analysis in the markets of bleached pulp and cottonine, and to determine the market shares of competitors, the volume of domestic consumption or imports of legal entities in physical terms (tons) was used.
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2.4. Production volumes of the largest competitors
The researched bleached pulp market is import-dependent, so the table shows the volumes of Indian producers and major importers.
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The largest enterprises in the cottonine market in 2020 it is made from linen.
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2.5. Analysis of the product range
Let's analyze the range of top manufacturers of bleached pulp and cottonine markets in India.
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2.6. Strengths and weaknesses of competitors
We will analyze the strengths and weaknesses of competitors.
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3. Consumption analysis
3.1. Market saturation
Let us assess the saturation of the bleached pulp and cottonine markets.
Market saturation is important information for making a decision to enter the market. From a mathematical point of view, market saturation is the ratio of the existing market volume to its potential capacity.
From an economic point of view, market saturation shows at what stage the market is and what is the potential for its growth.
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3.2. Key consumer trends in India
Key consumer trends in the bleached pulp market
The main consumer segments of bleached pulp are paper, packaging, sanitary and hygienic products, building materials, etc.
A number of large segments are clearly distinguished in the structure of pulp and paper products. The bulk of paper and cardboard consumption is formed by packaging products. The segment of paper sanitary and hygienic products is rapidly developing - toilet paper, towels, napkins, tablecloths, etc. The segment of paper information carriers is shrinking due to the displacement of print media by electronic media and the spread of paperless document management systems. The ban on the use of single-use plastic products in catering gives impetus to the development of the segment of disposable paper tableware.
A significant amount of paper and cardboard is consumed in the segment of building and finishing materials (wallpaper, drywall, waterproofing, roofing, lining materials). The segment of specialized papers and cardboards is represented by a variety of technical materials: filter papers and cardboards, electrical and shoe cardboard and other types of special papers and cardboards.
The outstripping growth of the packaging segment is ensured not only by an increase in the physical volume of consumption, but also by the action of a number of other factors. This is a change in the structure of retail: the continued growth in the share of online retail, as well as the rapid development of e-commerce, which has especially intensified during the pandemic. The growth in packaging consumption is facilitated by a decrease in the volume of investments in packaging, due to a decrease in the number of members of one household.
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Key consumer trends in the cottonine market
According to RIA Novosti, at present, products made from natural fabrics (cotton, wool, linen) are becoming increasingly popular among people who choose a healthy environment. And there are more and more such people in the world. Modern fabrics made from natural fibers have good technical characteristics and do not cause allergic reactions in the body. Demand for clothing made from cotton, linen and wool is increasing in India. Since India mainly imports cotton, the production of cottonine from flax and industrial hemp can be called promising.
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3.3. The largest consumers in 2020
The largest consumers, including the largest distributors of bleached pulp and cottonine, in India are presented in the tables below. Some manufacturers of pulp and cottonine are also their largest consumers and produce goods with higher added value from the studied products - paper, cardboard, sanitary and hygiene products, fabrics and finished products from them (pastel accessories, clothes, etc.).
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3.4. Analysis of the results of tenders for the purchase for 2020–2021
We will analyze the results of tenders for the purchase of bleached pulp and cottonine in India in 2020-2021.
In 2020-2021 there were no tenders for the purchase of cottonine in India.
4. Price analysis of bleached pulp and cottonine
4.1. Prices of domestic producers
The average Indian producer price for bleached pulp is shown in the chart.
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Manufacturers of cottonine differentiate the product and, accordingly, the prices for it.
4.2. Analysis of prices for imported products
We will analyze the prices of imported products.
Chart 29. Average price of imported bleached pulp, India, 2020, USD/t
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5. Analysis of the industry in a crisis
According to the Higher School of Economics, the COVID-19 pandemic has had a significant impact on the pulp and paper market, hindering global supply chains, changing the structure of consumer demand and causing market fluctuations. At the same time, the impact of the pandemic differed markedly depending on the segment and was multidirectional.
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6. Forecasts and conclusions
6.1. Barriers in the market
A qualitative indicator that characterizes the structure of a commodity market is the presence (or absence) of barriers.
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There are also problems of modernization of textile equipment, most textile enterprises in India operate on outdated equipment, where cottonized fiber is not used in the production of fabrics.
There are also export barriers, the overcoming of which includes certification of products in countries where products are exported or planned to be delivered, customs regulation, export quotas. Exports can be significantly affected by the political environment and sanctions, which are external factors and may be beyond the control of the company.
6.2. Market Growth Drivers
Bleached pulp and cottonine are important components from which products are made in various sectors of the economy.
Bleached pulp is widely used in the production of paper, packaging, corrugated packaging, sanitary products, and the chemical industry.
Bleached pulp market growth drivers in the medium term are bleached pulp consumer segments – packaging materials, corrugated packaging (containerboard), as well as sanitary and hygiene products.
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6.3. Market development forecast until 2025
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Diagrams
Diagram 1. Dynamics of bleached pulp production, India, 2018-2020, million tons
Diagram 2. Dynamics of cottonine production volume, India, 2018-2020, thousand tons
Chart 3. Share of exports in bleached pulp production, India, 2018–2020, %
Chart 4. Share of exports in cottonine production, India, 2018–2020, %
Diagram 5. Share of imports in the bleached pulp market, India, 2018-2020, %
Diagram 6. The share of imports in the cottonine market, India, 2018-2020, %
Diagram 7. Dynamics of bleached pulp market volume, India, 2018-2020, thousand tons
Diagram 8. Dynamics of the cottonine market volume, India, 2018-2020, thousand tons
Diagram 9. Dynamics of the market volume of cottonine and cotton fibers, India, 2018-2020, thousand tons
Diagram 10. Population dynamics in India, as of 01 Jan. 2012–2021
Chart 11. Population forecast in India for the period 2021-2024, million people
Chart 12. Dynamics of real disposable income of the population of India, 2012-2020, available period 2021
Chart 13. Dynamics of India's GDP, 2012-2020, available period 2021, % of the previous year
Chart 14. Monthly dynamics of the US dollar against the rupee, 2016 - available period 2021, Rs. for 1 US dollar
Diagram 15. Dynamics of inflation in India, 2016-2020, %
Chart 16. Dynamics of industrial hemp planting areas, India, 2016-2020
Diagram 17. Dynamics of fiber flax acreage, India, 2016–2020
Chart 18. Bleached pulp market structure by Union Territories, 2020
Diagram 19. Structure of the cottonine market by Union Territories, 2020
Diagram 20. Profitability before tax, 2018–2020, %
Diagram 21. Current liquidity (total coverage), 2018-2020, times
Diagram 22. Business activity (average period of receivables turnover), 2018-2020, days days
Diagram 23. Financial stability (security of own working capital), 2018-2020, %
Diagram 24. Shares of the largest competitors in the bleached pulp market, 2020, %
Diagram 25. Shares of the largest competitors in the cottonine market, 2020, %
Chart 26. Results of conducted tenders for the purchase of bleached pulp, India, 2020 - available period 24.10.2021/ /
Chart 27. Average producer price for bleached pulp (without VAT), India, 2021, Rs./t
Chart 28. Average producer price for cottonine (without VAT), India, 2021, Rs./kg
Chart 29. Average price of imported bleached pulp, India, 2020, USD/t
Chart 30. Average price of imported cottonine, India, 2020, USD/kg
Tables
Table 1. STEP Analysis of Factors Affecting Bleached Pulp and Cottonine Markets
Table 2. Government support and import substitution programs
Table 3. Gross Margin of Bleached Pulp and Cottonine Producers Compared to All Industries in India, 2018-2020, %
Table 4. Absolute liquidity of bleached pulp and cottonine producers compared to all sectors of the Indian economy, 2018-2020, times
Table 5. Main companies participating in the bleached pulp market, 2020
Table 6. Main companies participating in the cottonine market, 2020
Table 7. Production or import volumes of the TOP-5 bleached pulp market participants, 2020, thousand tons
Table 8. Production or import volumes of the TOP-5 cottonine market participants, 2020, thousand tons
Table 9. The range of the largest players in the bleached pulp market by product type
Table 10. Assortment of the largest cottonine market players by product type
Table 11. Strengths and weaknesses of competitors in the bleached pulp market
Table 12. Strengths and weaknesses of competitors in the cottonine market
Table 13. Major consumers of bleached pulp
Table 14. Major consumers of cottonine
Table 15. Forecast of bleached pulp and cottonine markets in India until 2025, thousand tons
Table 20. Distribution of production volumes of bleached pulp and cottonine, %
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