Protesting against the erratic raise in the prices of kraft paper in the last three months, the corrugated box manufacturers have decided to put off the production for three days from June 29 to July 1, 2008.
The protest ?bandh? will be observed by all the 9,000 odd units across the country, according to GB Shenoy, president, AP Corrugated Box Manufactures Association. ?The all India federation, which is representing the industry across the country, had given the call recently,? Shenoy said.
The federation had tried to convince the paper industry about the need for increasing the prices only once a year, ?but they refused to consider our problems?. It sought the support the Union government to bring price stability and transparency from paper mills and get them to the negotiating table in framing a medium and long term pricing policy.
Andhra Pradesh (AP) has about 300 units consuming 1.2 lakh tonne of kraft paper annually, as against 30 lakh tonne consumed in the country. The corrugated box manufacturers are serving the most crucial supply chain partners and eco-friendly alternative to wooden packaging.
According to Shenoy, the paper industry is continuously increasing the kraft paper price since March, taking it to Rs 22 per kg from Rs 14 per kg, resulting in the raise of the conversion cost to about 70%. However, the box making company cannot pass the burden to its customers as they have long term rate contract with their customers. ?The situation has reached a critical point and the very survival of the industry is under threat,? Shenoy added.
Interestingly, though the Union Budget had offered relief to the paper industry by removing the duty on the first 3,500 tonne of production, the benefit was not been passed on to the customers (box manufactures), he pointed out.