Corrugated Box Manufactures Downed Shutters
More than 250 corrugated box manufacturing units in and around Coimbatore, Tirupur and Erode have downed their shutters from June 29 in protest against the spiralling cost of kraft paper and other inputs. According to a release from K.Arunachalam, president of the Coimbatore Chapter of the South India Corrugated Box Manufacturers’ Association, this sector generating Rs. 10,000 crore of business is mostly in the small scale segment. “This is reeling under tremendous margin pressures due to rising input cost and the industry’s failure to raise prices.”
The margin has become almost nil because of the rise in prices of almost all raw materials. The kraft paper alone constitutes 70 per cent of the total input cost. From March this year, there been a rise of about 30-35 per cent in the basic raw material, mainly imported waste from the US and local waste. Other inputs, including stitching wire, starch, power and transportation have recorded an unprecedented rise, thus jacking up the conversion cost by nearly 70 per cent. The paper price was around Rs. 15 a kg in the lower category in December last and it has shot up to Rs. 21 a kg. The paper mills are planning a further increase.
“The situation is critical and the survival of the industry is under threat as the end users of corrugated boxes have not met these increases.” The association wants to create awareness among consumers on the situation and better understanding of the ground realities so that the industry is paid what is legitimately due towards the conversion costs and paper price hike to an extent of 35 to 45 per cent. The units will remain closed till July 1
