You are here: Home » Companies » Industry
Business Standard

23% rise in kraft paper price hits corrugated box manufacturers hard

Many box making units face closure, seek equivalent price hike from user industries to stay afloat

Dilip Kumar Jha  |  Mumbai 

Photo: Shutterstock
Photo: Shutterstock

In a major blow to manufacturers, prices of have risen by 23 per cent over the past three months due to short supply, following intermittent closure of production units.

Trade sources said that prices are likely to have surged the highest in any quarter. Trading currently at Rs 31 a kg, prices have risen by Rs 7 a kg across all varieties since January and Rs 2-3 a kg in March alone.

The sharp increase in the cost of this critical raw material has put a question mark on the financial viability of making units, as there is no substitute for This is why manufactures have sought a proportionate hike in the prices of the packing material from consumer industries, including large

"Unless box users, including large fast moving consumer goods (FMCG) grant a minimum 23 per cent price increase quickly, units in this will face closure shortly. At the same time, paper mills are being requested not to shut operations to avoid stock-out situations of boxes. Maintaining the price of corrugated boxes at the current level would force closure of production lines," said Kirit Modi, President, Indian Corrugated Case Manufacturers Association (ICCMA), a pan-India body that represents over 200 large producers contributing around 40 per cent of India's total output.

Over 12,000 existing making units produce nearly 5.2 million tonnes a year of boxes with an estimated market value of Rs 18,000 crore. While 200 automated manufacturing units contribute nearly 40 per cent, about 2,200 semi-automated and partly organised units contribute another 40 per cent. Over 9,500 units in the unorganised sector contribute the rest.

"There is stiff competition among manufacturers. If one producer seeks a price increase from the consumer, another one becomes ready to supply at the price decided earlier or even lower. This competition from within the industry, therefore, prevents manufacturers from seeking high prices from user industries," said Modi.

"We request all concerned government agencies to rescue box manufacturers from possible closure. Artificial scarcity created by such closures by mills would jeopardize the entire trade. That would also result in displacement of workmen employed in this industry, which would be inevitable unless all stakeholders come to the rescue of box units," said G K Sardana, President, Federation of Manufacturers of India (FCBM), representing over 2200 mills across the country.

manufacturers will soon write to the Ministries of Industry, Small and Medium Enterprises and the Prime Minister's Office seeking their intervention in this matter.

RECOMMENDED FOR YOU

23% rise in kraft paper price hits corrugated box manufacturers hard

Many box making units face closure, seek equivalent price hike from user industries to stay afloat

In a major blow for corrugated box manufacturers, prices of kraft paper have risen by 23 per cent over the last three months due to shortage of its supply following intermittent closure of production units.Trade sources said that kraft paper prices have surged perhaps the highest in any quarter. Trading currently at Rs 26-27 a kg, kraft paper prices have risen by Rs 7 a kg across all its varieties since January and Rs 2-3 a kg in March alone.Sharp increase in the raw material cost has questioned the financial viability of corrugated box manufacturers being the only raw material. Therefore, corrugated box manufactures have sought proportionate hike in the prices of the packing material from consumers industries including large corporate."Unless the box users including large fast moving consumer goods (FMCG) companies grant minimum 23 per cent price increase quickly, units of this industry would face imminent closure shortly. At the same time, paper mills are being requested to avoid ...

In a major blow to manufacturers, prices of have risen by 23 per cent over the past three months due to short supply, following intermittent closure of production units.

Trade sources said that prices are likely to have surged the highest in any quarter. Trading currently at Rs 31 a kg, prices have risen by Rs 7 a kg across all varieties since January and Rs 2-3 a kg in March alone.

The sharp increase in the cost of this critical raw material has put a question mark on the financial viability of making units, as there is no substitute for This is why manufactures have sought a proportionate hike in the prices of the packing material from consumer industries, including large

"Unless box users, including large fast moving consumer goods (FMCG) grant a minimum 23 per cent price increase quickly, units in this will face closure shortly. At the same time, paper mills are being requested not to shut operations to avoid stock-out situations of boxes. Maintaining the price of corrugated boxes at the current level would force closure of production lines," said Kirit Modi, President, Indian Corrugated Case Manufacturers Association (ICCMA), a pan-India body that represents over 200 large producers contributing around 40 per cent of India's total output.

Over 12,000 existing making units produce nearly 5.2 million tonnes a year of boxes with an estimated market value of Rs 18,000 crore. While 200 automated manufacturing units contribute nearly 40 per cent, about 2,200 semi-automated and partly organised units contribute another 40 per cent. Over 9,500 units in the unorganised sector contribute the rest.

"There is stiff competition among manufacturers. If one producer seeks a price increase from the consumer, another one becomes ready to supply at the price decided earlier or even lower. This competition from within the industry, therefore, prevents manufacturers from seeking high prices from user industries," said Modi.

"We request all concerned government agencies to rescue box manufacturers from possible closure. Artificial scarcity created by such closures by mills would jeopardize the entire trade. That would also result in displacement of workmen employed in this industry, which would be inevitable unless all stakeholders come to the rescue of box units," said G K Sardana, President, Federation of Manufacturers of India (FCBM), representing over 2200 mills across the country.

manufacturers will soon write to the Ministries of Industry, Small and Medium Enterprises and the Prime Minister's Office seeking their intervention in this matter.

image
Business Standard
177 22

23% rise in kraft paper price hits corrugated box manufacturers hard

Many box making units face closure, seek equivalent price hike from user industries to stay afloat

In a major blow to manufacturers, prices of have risen by 23 per cent over the past three months due to short supply, following intermittent closure of production units.

Trade sources said that prices are likely to have surged the highest in any quarter. Trading currently at Rs 31 a kg, prices have risen by Rs 7 a kg across all varieties since January and Rs 2-3 a kg in March alone.

The sharp increase in the cost of this critical raw material has put a question mark on the financial viability of making units, as there is no substitute for This is why manufactures have sought a proportionate hike in the prices of the packing material from consumer industries, including large

"Unless box users, including large fast moving consumer goods (FMCG) grant a minimum 23 per cent price increase quickly, units in this will face closure shortly. At the same time, paper mills are being requested not to shut operations to avoid stock-out situations of boxes. Maintaining the price of corrugated boxes at the current level would force closure of production lines," said Kirit Modi, President, Indian Corrugated Case Manufacturers Association (ICCMA), a pan-India body that represents over 200 large producers contributing around 40 per cent of India's total output.

Over 12,000 existing making units produce nearly 5.2 million tonnes a year of boxes with an estimated market value of Rs 18,000 crore. While 200 automated manufacturing units contribute nearly 40 per cent, about 2,200 semi-automated and partly organised units contribute another 40 per cent. Over 9,500 units in the unorganised sector contribute the rest.

"There is stiff competition among manufacturers. If one producer seeks a price increase from the consumer, another one becomes ready to supply at the price decided earlier or even lower. This competition from within the industry, therefore, prevents manufacturers from seeking high prices from user industries," said Modi.

"We request all concerned government agencies to rescue box manufacturers from possible closure. Artificial scarcity created by such closures by mills would jeopardize the entire trade. That would also result in displacement of workmen employed in this industry, which would be inevitable unless all stakeholders come to the rescue of box units," said G K Sardana, President, Federation of Manufacturers of India (FCBM), representing over 2200 mills across the country.

manufacturers will soon write to the Ministries of Industry, Small and Medium Enterprises and the Prime Minister's Office seeking their intervention in this matter.

image
Business Standard
177 22