Corrugated box manufacturers seek support from FMCG players

Karnataka Corrugated Box Manufacturers Association, which is in dire straits due to rising kraft paper prices and supply disruptions, seeks support from the FMCG segment in increasing lead time of supplies of corrugated boxes.

“The corrugated box industry is reeling under twin blows — massive price increase in a short span of two months by Kraft Paper Mills and recurring monthly planned closures by the mills.  The increase in price has affected the financial viability, and also frequent closures have completely disrupted the supplies of raw materials for the corrugated box industry,” Karnataka Corrugated Box Manufacturers Association President Manish Bothra told Deccan Herald.

India has over 12,300 corrugated box manufacturers with a total annual turnover of Rs 18,000 crore. Approximately, six lakh direct employment and 12 lakh indirect employment have been generated till date. The industry plays a pivotal role in the economy by producing almost 52 lakh tpa (tonnes per annum) boxes.

“We request the ministry of commerce to form a committee to look into the unjustified unified closures taken up by the Paper Mill Association to create an artificial demand and disruption in supplies of raw material resulting in the disruption of supplies to the end consumer. The whole supply chain is being effected,” Bothra said.

The industry has urged the box users, including large FMCG companies, to allow then to pass on a minimum of 23% price increase immediately to just cover the increased raw material cost.

“We seek support from the FMCG segment in increasing lead time of supplies of corrugated boxes, as the paper supplies cannot be predicted. Secondly, there is a need to increase prices to set off the increase in paper cost,” he added.

The major players in this industry include South India Paper Mills, Horizon Packs, MNM Triplewall Containers and WAD Pack.

In Karnataka, FMCG consumes over 20% of corrugate boxes, followed by processed food & fresh produce & dairy products (20%), garments (15%), ecommerce and retail (10%), automobile & engineering (7%), liquor, wine and beer (10%), pharmaceuticals (5%), home appliances (5%) and others (8%).