The unorganised packaging industry in Uttar Pradesh has begun to feel the heat of fierce competition and raw material scarcity, eating into their already slim profit margins.
The corrugate box manufacturers are incurring losses due to intense pressure to keep the prices low despite the constant increase in raw material and manufacturing costs, coupled with strong lobby of organised and branded packagers.
The main raw material required is craft paper and polyester foils, whose prices have risen by more than 50 per cent over the past two months. Paper mills have twice increased their prices by Rs 2,000 per tonne in the past two months in response to its lesser availability and higher demand.
The inflated fuel prices have also pushed the transportation costs up and the cost of starch used in manufacturing has gone up by 50 per cent in the last one year.