A Comprehensive Guide to Paper Bags and How to Start a Paper Bag Making Business!

A Comprehensive Guide to Paper Bags and How to Start a Paper Bag Making Business!

With the rising toxicity and pollution levels in the environment, eco-friendly products have become the need of the hour. Governments and various companies across the world are finally discouraging the use of plastics, which causes disastrous environmental issues. This has paved way for the paper bag-making businesses. Paper bags are in great demand nowadays for their recyclable and sustainable features in nearly every commences activity.

Reusable and Eco-friendly paper bag

The Emergence and Evolution of Paper Bags!
Advantages of Using Paper Bags
Common Uses of the Paper Bags
Types of Paper Bags
The Paper Bag Industry, its Market Potential, and Opportunities
10 Easy Steps to Start Paper Bags Making Business
Some Steps to be Kept in Mind to Make Paper Bags
Branding and Promotion of the Product
Profits Expected from Paper Bag Making Business

The Emergence and Evolution of Paper Bags!

Paper bags, as the name implies, are bags made out of paper. These papers are usually created with the chemical pulp that is manufactured with the help of the kraft pulping process.

Paper bags are not a new thing that we witness today. The paper bag-making industry is pretty old in India and is still found in a majority of Indian shops, mainly in tier 2, and tier 3 cities, and beyond. However, most of these are envelope-styled bags, which lack handles. The flat-bottomed bags with handles are pretty new to the Indian market though, which is generally known for its eco-friendly bags made out of jute.

Francis Wolle first invented the machine to mass-produce paper bags back in 1852. His brother and Wolle patented the machine and established the Union Paper Bag Company. It was James Baldwin, who first received a patent for the apparatus for making square-bottomed paper bags in 1853. He was a papermaker of Birmingham and Kings Norton in England. Baldwin then began to use the image of a flat-bottomed bag as his business logo.

The concept of flat-bottomed paper bags got a boost in 1871 when inventor Margaret E. Knight ideated a machine that would be able to create flat-bottomed paper bags. These bags were detected fit to carry more than the previous envelope-style design. Eventually, Charles Stilwell patented a machine that is capable of creating square-bottom paper bags that had pleated sides in 1883. These bags emerged as a better alternative that is easier to fold and store. The Stilwell bags also came to be known as S.O.S or Self-Opening Sack.

The latest modification of the paper bags that come with handles was actually implemented by Walter Deubener in 1912. A grocer from Saint Paul, Minnesota, Deubener used cords with paper bags to reinforce them and also added carrying handles. Named after Walter Deubener, the "Deubener Shopping Bags" were able to carry nearly 75 pounds then, which was why it soon rose in popularity. It recorded a sale of 1+ mn bags a year by 1915.

After this, paper bags with handles became the standard for department stores and others, especially for their ease of use and durability. However, paper bags were trumped by plastic bags, which were introduced in the 1970s. These bags were lightweight and affordable, which propelled them to be the regular choice of both shoppers and merchants. However, plastic bags were eventually found to be really harmful to the environment, which is the reason for the growing demand for paper bags and other eco-friendly options.

Advantages of Using Paper Bags

Paper bags are largely embraced today by shoppers and shopkeepers because of the list of advantages they bring to us. Here's to list of some of them:

  • They are biodegradable and recyclable
  • They don't cause harm to the environment
  • Paper bags pose less risk of suffocation
  • These bags don't harm the marine life
  • The paper bags are easy to dispose of
  • They are sustainable options
  • They save energy
  • The making of paper bags is easy and efficient
  • They are cost effective
  • Paper bags are efficient marketing tools
  • They can also serve as excellent gifts for corporates and others

Common Uses of the Paper Bags

Following are some of the major areas where paper bags are used:

  • Gift packaging
  • Food packaging
  • Shopping
  • Paper cover making at home
  • Medical use
  • Jewellery packaging
  • General purposes
  • Advertising

Types of Paper Bags

Paper bags can be classified into numerous categories. However, when looking at these bags, there are 2 prominent varieties of them that one can usually find:

  • White paper bags - The white paper bags or the white kraft paper bags are chemically treated variants of paper bags. These bags are bleached and treated with other chemicals, which help whiten them and purify the natural kraft pulp.
  • Brown paper bags - The brown paper bags or the brown kraft paper bags are made of unbleached kraft pulp.
Market Share of Paper Bags in India - White vs Brown Kraft Paper Bags
Market Share of Paper Bags in India - White vs Brown Kraft Paper Bags 

The Paper Bag Industry, its Market Potential, and Opportunities

The global market for paper bags is estimated to grow at a steady CAGR of 4.1% between 2022-2030 and is to reach $7.3 bn during this period. The global market size of paper bags was $5.2 bn in 2022. The collective paper bag manufacturers' market share or value share of the top 5 companies in 2022E is estimated at 11%.

Global growth of paper bag market.

The Indian paper bag industry last stood at $5.95 bn when reported in 2018. the country today, exports paper products worth Rs 400 crore per annum.  

Paper has no real competing product. Plastic bags, once regarded as a substitute for paper bags have lost their market over time. Moreover, the establishment of consumer stores and shopping malls has further increased the demand for paper bags. Hence, the paper bag-making business is a booming opportunity for new and aspiring entrepreneurs.

10 Easy Steps to Start Paper Bags Making Business

Paper bag making is rising in demand and more and more companies and entrepreneurs are joining in to make the best of the paper bag-making business. Now, if you are also looking forward to building a paper bag-making business, then here are some easy and effective steps that you can keep in handy:

Perform a thorough market research

Thorough market research is essential regardless of whatever the business is that you want to build. Proper market research would help you:

  • Know more about the industry
  • Build your strategies
  • Market your products effectively
  • Analyze your competitors
  • Perform a SWOT analysis
  • Thrive in the long run  

Build a robust business and revenue model

Business models are of various kinds, one type of business model may not suit all of the industries and products/services around which the businesses revolve. So, spend time generously building a business model that is cost-effective and efficient for the customers, which would thrive in the future. It is also equally important to chalk out all the ways through which you would be able to earn, embracing the business model that you have zeroed in.  

Estimate the Paper Bag Making Business Costs

As paper bag making is generally a small-scale business, it will require minimal investment. The main areas of investment will be the cost of machinery, labor, and land.  Maintenance, transportation, and marketing will contribute to variable investments.

The price of one fully automatic paper bag-making machine is around 5 – 8 Lakhs INR. The price is dependent on the production capacity of the machine. One fully automatic machine can produce 15000 pieces/hour. Researching and proper planning as to where to spend and the choice of suppliers will also reduce your cost to a significant extent.

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Register your Company

You will need to register your business and obtain a trade license from a local municipal authority.

  • Here, you can proceed either with a sole proprietor or an LLP registration of Company registration.
  • Then you will have to get your UDYOG AADHAR MSME registration or SSI registration completed. It is for businesses running under the name of small-scale industries.
  • After that, you need to make your company GST-compliant, by opting for GST registration.
  • Lastly, you need to procure the BIS certification for your company, which is offered by the Bureau of Indian Standards

Registering your paper bag-making business is a significant part of making your business legally compliant, which contains other factors too. These legal factors need to be checked first by seeking the help of local government representatives. Looking for and proceeding with efficient business insurance would further make your paper bag manufacturing business future-proof.

After all these things are taken care of, you can start your business professionally, but the naming of the business plays an important part, then.

Name your Business wisely

The naming of your business will play a huge role in the future growth and success of your business. Hence, you need to name your paper manufacturing business wisely. To choose a perfect name for your paper-making business, you need to ensure:

  • The name is unique
  • It is simple
  • It is easily pronounced and written
  • The name should be marketable
  • It should be memorable
  • The name should be relevant to the industry

Select a Proper Location for your Paper Bag Manufacturing Unit

Choosing an appropriate location according to your business size is very important. Moreover, the rented land cost must not outweigh your profits. To make transportation costs minimum, try to fix the location near the market and reduce the distribution channel. A semi-urban area is the best choice to establish paper bag-making businesses. It reduces costs in taxes, rents, manpower, and other important obligations.

Make Provisions for Procuring the Raw Materials Required for Paper Bag Making

The quality of your products and eventually the profits depend on the raw materials used. Paper bags with outstanding quality and fine texture can boost your competitive advantages and steal the focus of the market and the customers. Therefore, the appropriate quality, as well as quantity of raw materials, should be ensured.

These are some basic raw materials required for paper-making:

  • Paper rolls
  • Printing chemicals, ink, etc
  • Gums
  • Strings
  • Polymeter Stereo
  • Flexo Color

You do not need to overstock them as it may cause unnecessary storage costs.

Install Proper Paper Bag Manufacturing Machinery

Now, after the procurement of the raw materials for paper bag-making activities, you need to determine the type of paper bag your business will focus on manufacturing, and then select suitable machinery. Here, you would also need to check whether you will buy eco-friendly carry bag-making machines, wholesale biodegradable bag manufacturing machines, cotton bag-making machines, or something else.

The durability, reliability, and productivity of the machines should be checked thoroughly before purchasing. Depending on these factors, machinery costs from 5 lakhs to 10 lakhs.

Some of the basic features you can get when you buy a paper bag-making machine are listed below.

  • Stereo design roller
  • Flat forming dye
  • 3 horsepower motor for the main drive
  • Double-color or four-color flexo printing unit attachment

We recommend you visit a paper bag manufacturing firm in order to know more about the working of machines. This will also give you an idea of the machine you need to buy for manufacturing paper bags.

Engage the Labor Required

Labor size depends on the size of the business but skilled manpower is a must. A healthy interactive training program can help them learn the manufacturing process and meet the requirements of the employer.

A small scale paper bag making business

Some Steps to be Kept in Mind to Make Paper Bags

  • The very first step is to decide on the size of the product. It should meet the client's needs.
  • The next step is to print the logo. The print quality should not be compromised.
  • Then, the paper should be left for folding, pasting, and shearing which can be done through machines.
  • The last two steps are eyelet fitting and lace fitting, which needs to be properly done.

Branding and Promotion of the Product

Presentation is every bit as important as manufacturing. Without the right promotion, no business can survive long-term. There must be a uniqueness in your product description to attract your client's attention. A logo represents the image of your company and is good for promotion. You can hire freelancers to design your company's logo as you want. Also, you can use mediums like local magazines and newspapers for advertising your paper bags.

Social media provides a great platform for promoting your product and reaching the consumer crowd quickly. Establish an online website that not only gains orders but also creates an impactful image of your product to viewers. Research and conduct small surveys of the local and online markets.

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Profits Expected from Paper Bag Making Business

The paper bag-making machine is capable of making 60 bags in a minute. You can make a profit of 10 paise per bag. So, you can get a profit of Rs 6 for every minute you invest in bag-making. With production and marketing going smoothly, you can expect to earn near about Rs 2800 on a daily basis. This sums up to Rs 70000 per month. Although these profits vary depending on various other factors in your business.


Paper bag making can be really profitable if executed properly, taking care of all the above measures. This business is full of interesting opportunities, and the output, which is paper bags, is the need of the hour and this need will only escalate in the future. Anyone can start a paper bag-making business because it doesn't require large investments or vast land space or even complex machinery. In fact, you can initiate your business at home too if you have sufficient space for proper planning and researching. So go forth, invest time and energy, and set up your own paper bag-making business.


What are paper bags?

Paper bags are an environmental-friendly choice of bags. Being made out of paper, these bags are rising in demand while more and more people are rejecting plastic bags.

What is the paper packaging bag manufacturers' market?

The global paper packaging bag manufacturers market is valued at $5.2 bn in 2022 and will grow by 4.1% CAGR between 2022-2030, and is expected to reach $7.3 bn during this period.

From where is the paper bag procurement done?

Paper bag procurement can be done by visiting physical local stores, factories, and wholesalers, or by placing orders for the same online.

What is Paper bag limited Kenya?

Paper bags Ltd. is a Kenyan packaging company that manufactures quality paper packaging materials - brown and white paper bags, sacks, and more.

Paper bags is one of the industries that are flourishing today in India and has great potential for future growth too. Here's mentioning some of the prominent paper bag manufacturers in India:

  • Yes Sir Bags
  • Eco Bags India
  • Vachi Paper products
  • A. R. Enterprise
  • Papyrush

How are paper bags made in industry?

The paper bag manufacturing industry is huge today. However, if you are wondering how paper bags are made in the industry now, then here are some important steps that are carried out by the best paper bag manufacturing companies in their paper bag production factories:

  • First, they select the raw material needed and gather them
  • Then, they proceed with paper steering, where the cutting or sizing of paper is done.
  • The handles of the paper bags are done now.
  • After that, the sheered and eyelet-punched paper is creased.
  • Hard pressing is then done, where sheets of paper are stuck together to make the paper bags stronger and thicker.

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