12,000 corrugated box makers on the brink of closure
Corrugated box industry is reeling under the twin blows – 4 massive price increases in a short span of two months on one hand by Kraft Paper Mills & recurring monthly closures by Kraft Paper Mills on the other hand. Price increases have badly affected the financial viability and frequent closures have completely disrupted the supplies of raw materials for corrugated box industry.
Kirit Modi, president – Indian Corrugated Case Manufacturers Association (ICCMA), a Pan India body, stated that unless the Box users including large FMCG brand owners grant minimum 23% price increase quickly, units of this industry would face imminent closure shortly. At the same time, paper mills are being requested to avoid closures to avoid stock-out situations of boxes. If this is not done quickly, there are strong chances of production lines of essential public consumption items coming to halt for want of boxes.
GK Sardana, president of Federation of Corrugated Box Manufacturers of India (FCBM), requested all the concerned govt. agencies to come to box industry’s help in averting the crisis situation by prevailing upon Kraft Paper Mills Associations to shun closures and maintain smooth flow of supplies. Hon’ble Prime Minister’s cherished dream of ‘Make in India’ is a huge success. Artificial scarcity situation created by such closures by Kraft Paper Mills would jeopardize it. That would also result in displacement of workmen employed in this industry, which would be inevitable unless all stakeholders come to the rescue of box units.
In addition to increase in the cost of Kraft Paper, all other inputs, namely, manpower costs, ink, starch, stitching wire, freight and other overheads have also witnessed a huge increase in the last few years, leading to an impact on conversion cost by as much as 50 to 60%.
Corrugated box industry in the country with 300 Automatic Units and more than 12,000 Semi-automatic Units are facing imminent closure on account of these disruptions. This industry which is employing over 6,00,000 work force is playing a pivotal role in the Indian economy by producing almost 52,00,000 tpa boxes with the total market size of Rs.18,000 crores per annum & it also protects the environment as its’ products are 100% recyclable and eco-friendly.