What is a kraft paper project report?
A kraft paper project report is a detailed project report (DPR) for a mill that pulps waste paper and old cartons into brown kraft paper for boxes and packaging. The report sets out the process, machinery, fibre supply, approvals, project cost, means of finance, five-year projections, DSCR and break-even.
Promoters use it to size the mill and raise a term loan; banks use it to judge whether the mill can service the debt from its cash flow.
Also known as: kraft paper mill project report, DPR for kraft paper plant, kraft paper business plan, recycled kraft paper project report, project report on kraft paper.
Kraft paper manufacturing plant cost in India: sample economics
Our sample report models a 50 MT per day recycled kraft mill working 330 days, or 16,500 MT a year at full capacity. Output starts at 60% of capacity and reaches 80% in Year 5, sold at ₹31,000 per MT.
| Land and site development | 157.24 |
|---|---|
| Building and civil works | 569.93 |
| Plant and machinery | 1,305.98 |
| Other fixed assets | 140.52 |
| Contingencies | 93.80 |
| Preliminary and pre-operative | 56.69 |
| Working capital margin | 109.94 |
| Total | 2,434.10 |
| Promoter's contribution (25%) | 608.52 |
|---|---|
| Term loan from bank (75%) | 1,825.58 |
| Cash credit limit (separate) | 329.84 |
| Total project cost | 2,434.10 |
Term loan at 10.5% with a 12-month moratorium and 72 monthly instalments. All figures are illustrative.
Kraft paper manufacturing process, from waste paper to reel
A recycled kraft mill turns bales of old cartons back into fibre and then into paper. Most of the skill lies in cleaning the stock well and drying it with as little steam as possible.
- Pulping
Waste paper bales go into a hydrapulper with water, which breaks them into a fibre slurry; a ragger pulls out wires, tape and plastic.
- Cleaning and screening
High-density cleaners remove sand and pins, and pressure screens take out stickies and light plastic that would cause holes and breaks.
- Refining
Disc refiners roughen the fibres so they bond better, which raises burst strength; too much refining slows drainage on the machine.
- Sheet forming
Diluted stock flows from the headbox onto the moving wire of a Fourdrinier or multi-layer former, and the drained white water is reused.
- Pressing
The wet web passes between press rolls and felts; every point of water removed here saves steam in the dryers.
- Drying and size press
Steam-heated cylinders dry the sheet, and starch applied at the size press improves strength and controls water absorption.
- Reeling and testing
Paper is wound on a pope reel, slit to box makers' deckle widths on the rewinder, and tested for BF, GSM, moisture and Cobb.
Waste paper or virgin pulp: which route suits a new kraft mill?
Most new kraft paper plants in India run on recycled fibre because it needs far less capital. Virgin or agro pulp makes sense mainly for large mills chasing high-strength grades.
| Point | Recycled fibre (OCC) | Virgin or agro pulp |
|---|---|---|
| Fibre source | Old corrugated cartons and kraft waste, domestic and imported | Wood, bamboo, bagasse or wheat straw |
| Pulping | Mechanical slushing in a hydrapulper, no cooking | Chemical cooking in digesters, with black liquor to treat or recover |
| Scale and capital | Viable from about 30–60 MT per day | Needs a much larger plant to carry the pulp mill and chemical recovery |
| Typical grades | Low and medium BF kraft for fluting and liners | High BF and kraft liner with longer, stronger fibre |
| Main risk | Waste paper price swings and fibre that weakens with every recycling | Raw material logistics, chemical cost and effluent load |
Both routes fall in the pollution control board's Red category. Our sample report models the recycled route.
Raw materials for kraft paper
Waste paper is bought by grade, from local collectors and dealers and as imported OCC bales. Moisture, plastic and sand in the bales are paid for but never become paper, so mills test incoming loads and grade suppliers.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Waste paper and old corrugated cartons | 80% | 1,198.10 |
| Starch and chemicals | 10% | 149.76 |
| Felts and wires | 10% | 149.76 |
| Total | 100% | 1,497.62 |
Sample figures are illustrative. Waste paper prices change every month, so a report for your mill uses current rates for your region.
Machinery for a kraft paper plant
The paper machine with its dryer section is the largest single cost in the sample, at about 42% of plant and machinery. Its width and speed decide the mill's real capacity.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Pulper and refiners | Breaks bales into fibre and develops bonding strength | 235.07 |
| Cleaners and screens | Removes sand, pins, plastic and stickies | 130.60 |
| Paper machine with dryer section | Forms, presses and dries the sheet | 548.51 |
| Boiler | Supplies steam to the dryer cylinders | 156.72 |
| Reeler and rewinder | Winds and slits paper to customer widths | 104.48 |
| Effluent treatment plant | Treats process water for reuse or discharge | 130.60 |
| Total plant and machinery | 1,305.98 | |
Costs are the sample report's estimates for a 50 MT per day line. Get current quotations, new or refurbished, before you finalise.
Power, steam, water and manpower for a kraft paper mill
After waste paper, energy is the biggest running cost. In the sample, power and fuel come to ₹435.89 lakh in Year 3, about 12.2% of sales and more than the wage bill.
| Power | Drives the pulper, refiners, vacuum pumps and machine sections; a high-tension connection sized for the full connected load |
|---|---|
| Steam | The dryer section uses most of it; condensate recovery and good pressing cut boiler fuel |
| Water | White water is recycled within the machine; fresh make-up water drawn from the ground needs a CGWA or state NOC |
| Effluent and rejects | An ETP is part of the plant (₹130.60 lakh in the sample); plastic and other rejects from pulping need a disposal route approved by the board |
| Manpower | 138 people in the sample: 21 in management and supervision, 48 skilled operators and 69 semi-skilled and unskilled workers, across three shifts |
Licences and approvals for a kraft paper mill
Pollution consent and water permission take the longest, so apply for them while the machinery is still on order.
| Pollution consent | Consent to establish and consent to operate from the State Pollution Control Board; waste paper based kraft paper mills are in the Red category |
|---|---|
| Boiler | Registration and a certificate to use the boiler under the Boilers Act, 2025, in force from 1 May 2025 |
| Groundwater | NOC from the Central Ground Water Authority or the state authority; the exemption for micro and small units drawing under 10 cubic metres a day will not cover a paper mill |
| Business and tax | Udyam and GST registration; kraft paper (HSN 4804) carries 18% GST from 22 September 2025 |
| Factory and fire | Factory licence under the state's rules and a fire NOC; requirements vary by state |
| Product standard | IS 1397 covers kraft paper for wrapping and packing; box makers usually specify BF, GSM, moisture and Cobb in their orders |
Who buys kraft paper, and how mills compete
Corrugated box makers take most kraft paper, using low BF grades for fluting and higher BF for liners. Their orders follow FMCG, e-commerce, appliance and festival packaging, so demand peaks before Diwali and softens after.
- Corrugated box and carton makers
- Paper bag and sack manufacturers
- Paper tube and core makers
- Industrial and export packaging firms
- Kraft paper traders and distributors
Where a new mill wins: kraft paper is bulky and sold on thin margins, so freight decides who gets the order. A mill that delivers consistent BF within a few hundred kilometres can hold box makers against larger, distant mills.
Mistakes that weaken a kraft paper project report
- Selling all output at the top BF price
Most tonnage is low and medium BF. Higher grades need better fibre and more refining, so the grade mix must match the furnish.
- Treating waste paper bought as paper sold
Moisture, plastic, sand and short fibre are lost in pulping and cleaning; the report must show yield and rejects.
- Under-estimating steam
The dryer section drives fuel use. A boiler sized on paper, or a fuel price that ignores seasonal swings, hides a cost gap.
- Leaving the ETP and water to the end
As a Red category unit the mill cannot start without consent to operate; a delay here stalls production and repayment.
- Ignoring box makers' credit
Trade receivables are the largest current asset in the sample at 45 days of sales; without them the cash credit limit comes out too small.
How NPCS helps you set up a kraft paper plant
- Capacity and grade mixSize the mill and its BF and GSM range to what box makers near you buy.
- Fibre and machinery planCompare waste paper sources, stock preparation lines and paper machines, new or refurbished.
- Bank-ready project reportProjections, DSCR, break-even and working capital in the format your lender expects.
- Approvals and utilitiesPollution consent, boiler, groundwater and power load planned for your state.
NPCS's client list records 9 kraft paper assignments, among 14 in the paper and board mill sector, for promoters in India and abroad. NPCS is led by its founder, Ajay Kumar Gupta.
What's inside the kraft paper sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
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Kraft Paper project report: frequently asked questions
How much does it cost to set up a kraft paper plant in India?
A recycled kraft paper mill of 30–60 MT per day usually needs about ₹15–35 crore, and mills of 100–200 MT per day need ₹50 crore or more. These are indicative figures. Our sample report models a 50 MT per day mill at ₹2,434 lakh, of which plant and machinery is ₹1,306 lakh. Land, building and the effluent plant make up much of the rest.
What raw material is used to make kraft paper?
Most Indian kraft mills use waste paper, mainly old corrugated cartons (OCC), bought from local collectors and as imported bales. Starch, sizing chemicals, and wires and felts for the paper machine are the other inputs. In our sample report, waste paper is 80% of raw material cost. Some larger mills also use agro or wood pulp for stronger grades.
What does BF mean in kraft paper?
BF stands for burst factor, the burst strength of the paper divided by its GSM. Box makers buy kraft paper by BF and GSM, for example 18 BF at 120 GSM. Higher BF grades need better fibre, more refining and tighter process control, so they sell at a premium. A project report should state the grade mix the mill will make.
What is the GST rate on kraft paper?
Uncoated kraft paper and paperboard under HSN 4804 attract 18% GST from 22 September 2025, up from 12%, following the 56th GST Council meeting. Corrugated cartons and boxes moved to 5%. Box makers buying kraft paper therefore pay more GST on input than they charge on boxes, which can affect their cash flow and buying pattern.
Is a kraft paper mill profitable?
It can be, if the mill buys waste paper well and runs steadily. In our illustrative sample, a 50 MT per day mill reaches a 20% return on investment in Year 3. Break-even comes at 40% of capacity and payback in about 3.7 years. Real margins move with the gap between waste paper and kraft paper prices, which changes month to month.
Kraft paper ka business kaise shuru kare?
Start by fixing the grades and capacity you can sell within a few hundred kilometres, then secure waste paper supply and a site with water and power. Next get a detailed project report, apply for pollution consent and boiler registration, and raise a term loan. NPCS prepares the project report and can help plan machinery and approvals for your state.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, location and lender.
Sources and references
- Categorization of industrial sectors under Red category as per CPCB criteriaState Pollution Control Board, Odisha, checked Oct 2026
- Recommendations of the 56th meeting of the GST Council (rate changes from 22 September 2025)GST Council, Press Information Bureau, checked Oct 2026
- IS 1397:1990 Kraft paper, specificationBureau of Indian Standards, checked Oct 2026
- The Boilers Act, 2025 (Act No. 12 of 2025)India Code, Ministry of Law and Justice, checked Oct 2026
- Guidelines to regulate and control ground water extraction in IndiaCentral Ground Water Authority, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.