The domestic corrugated package industry has been going through very difficult times because of the hefty price rise in all major raw materials, mainly kraft paper, starch powder, and stitching wire, which comes to over 70% of the total input cost.
Paper mills have increased the prices of kraft paper by Rs 4,000-4,500 per tonne in the last three months.Besides, prices of starch powder has gone up by about Rs 2,500-3,000 a tonne. Stitching wire prices have gone up by about Rs 50 to Rs 75 a kg, sources said.
“Corrugated packaging manufacturers will now have no option but to increase their product prices by nearly 25-30% in the days to come,” Pankaj Shah, senior ex-president, Western India Corrugated Box Manufacturers Association (WICBMA) said.
The end users do not fully appreciate the situation the industry is in and are not willing to compensate fully the increase in the cost of inputs, he said.
The corrugated packaging industry largely belongs to the SSI sector and these small scale industries have been subject to such prohibitive price hikes.
“The domestic industry has been meeting the needs of packaging for various industries like food, processed foods, fresh vegetables and fruits, white goods, appliances, and the engineering sector. It is impossible for any manufacturer to bear such an increase in conversion cost and kraft paper prices. Further, these increases have not been reimbursed by the end-users of corrugated boxes,” Pradip Bosmaya, President, WICBMA said.
Corrugated box is a vital link in the supply chain?effectively transporting products from the point of production to the point of consumption. The fact that 85% of products are packed in corrugated boxes underlines the importance of this industry.