High kraft paper prices to spike corrugated box costs

Mumbai, Apr 23 | Updated: Apr 24 2007, 05:55am hrs
The cost of corrugated boxes may increase by 15% to 20% due to sharp increase in the major raw material prices mainly kraft paper.

Corrugated packaging industry primarily belonging to the small scale sector has been adequately meeting the packaging needs of the nation by successfully substituting wooden boxes and plywood boxes, thereby contributing to the environmental protection and ecological balance.

"Prices of kraft Paper, the major raw material of corrugated boxes, constituting major cost of the box, have been increased twice during the last five weeks. These unilateral increases by the paper mills have created a panic situation in the corrugated packaging industry," said Kirit Doshi, president of the Federation of Corrugated Box Manufacturers of India.

Other inputs such as adhesive, ink, electricity, stitching wire, diesel have also gone up substantially. Industry experts reckon the input costs to have risen nearly three times in the past year. The fact that there have been negligible imports of corrugated boxes speaks well for the capability of the industry in meeting the packaging needs of the nation very effectively and making the nation self reliant.

Doshi said that the federation has taken a serious note of the situation and has decided to appeal to the concerned authorities to take appropriate steps to save the industry.

To combat the price hikes on kraft paper, the federation has appealed to the government to lower import duties from 10% to 5% and also to consider pending request of rationalisation of excise duty structure on corrugated boxes by reducing the excise duty from 16% to 8%.