Corrugation box industry faces multiple challenges

Tribune News Service

Solan,November 30

Already reeling under losses due to the steep price hike of kraft paper, corrugation box manufacturers’ woes have aggravated with the export of paper picking up.

VK Dewan, president, Federation of Corrugation Box Manufacturers of India, said the Indian Pulp and Paper Technical Association had estimated the production capacity of paper around 14 million tonnes (MT) nationally while the consumption of kraft paper in India is between 7-8 MT. “Even if we add the recent phenomenon of exports of about 1.5 MT, the total paper used will be barely 9 MT or just 66 per cent of the capacity.”

“The price of kraft paper has already increased by 30-35 per cent and it is still increasing. Besides, the supply of kraft paper is erratic, which has caused a crippling blow to the corrugation box industry as we are unable to get corresponding conversion cost from our customers,” said Surinder Jain, president, HP Corrugation Box Manufacturers Association.

Dewan further said the import and export data available with the federation over the last four years does not show any fall in import expected during the lockdown from May to July. Even the imports are set to increase this year as compared to last year, he asserted.

“The price of domestic waste has only increased by Rs 2-3 per kg and even on the imported waste front, the price has not increased till October. We are surprised to see why the price of kraft paper has increased so rapidly when factors affecting it do not portray the same.”

Notably, the paper mills are largely dependent upon waste paper imported from the USA and Europe. Owing to its poor collection and increase in its import cost in the last over two months, paper mills have increased the cost of kraft paper multifold.

A majority of the 250-odd corrugation box manufacturers, who comprise micro, small and medium sector enterprises (MSME) in Himachal, are faced with an uncertain future as the government is yet to address these problems.

Federation members said the volatile situation was here to stay and consumers should determine the price of boxes in light of these factors. “Though the corrugation boxes lie at the bottom of the pyramid in the supply chain, they are a vital input.”