The Hindu : New Delhi News : Corrugated box making industry facing closure

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Corrugated box making industry facing closure

Staff Reporter

Steep increase in the costs of paper and raw material

‘In the past four years the conversion cost has gone up by about 50 per cent’
The industry will observe a three-day closure from June 29 to generate awareness

NEW DELHI: Frequent increases in the cost of paper and a steep increase in the prices of other raw materials has pushed the small-scale industry of corrugated box manufacturers to the brink.

Battling inflation, the manufacturers of corrugated boxes are relying on government intervention to save the industry, which according to them is on the verge of collapse.

“The industry is facing instability. In the past four years the conversion cost has gone up by about 50 per cent. There is a frequent hike in the cost of kraft paper -- a major raw material. The prices of other raw materials like adhesive, lamination films, energy have all gone up, making it difficult for the industry to survive,” said Harish Madan, former president of the Federation of Corrugated Box Manufacturers of India, at a press conference on Thursday.Pointing out that about 20 per cent of the industry had already shut down, Mr. Madan said: “We follow the best global practices, our produce is eco-friendly, but because of the continued hike in the price of raw materials, the prohibitive import duty on kraft paper, we are struggling to stay afloat.”

The industry will observe a three-day closure from June 29 to generate awareness among the public about the precarious situation it finds itself in. “Inflation is at an all-time high, the cost of inputs like steel stitching wire, starch, labour, energy and transportation has gone up. We are being forced to undertake a three-day closure so that we can create awareness about the industry’s predicament,” said Federation president Satish Tyagi.

10,000 units

The corrugated box manufacture industry with a strength of about 10,000 units converts close to 33 lakh tonne of paper into boxes for packaging consumer goods. The Federation claims that the price of kraft paper alone has increased at monthly intervals since this past March by over Rs.4,500 per metric tonne and another hike has been announced this past month.

Unable to meet the demand for corrugated boxes given the raw material price rise, the Federation wants the Government to constitute a joint committee of senior officials, paper manufacturers, and stakeholders to evolve a mechanism to ensure systematic increase in paper prices as and when required.

“We also want the Government to allow duty-free import of kraft paper since the indigenous production of paper is far below international standards. This will also give an impetus to the indigenous paper mills to upgrade their quality to meet global standards,” said Mr. Tyagi.

The Federation members claimed that the persistent rise in the cost of kraft paper would severely affect other industries as well. Corrugated boxes are necessary for packing finished products ranging from toothbrushes to other consumer durables. “There is an urgent need to provide stability to the industry and have workable solutions to the problems faced by this industry with an annual turnover of about Rs.10,000 crore and that offers livelihood to about four lakh workers directly and otherwise,” Mr. Madan added.

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