The Hindu Business Line : Kraft paper prices go up by Rs 2,000 a tonne

Mumbai, Nov 9 The small-scale corrugated box manufacturers in a quandary with paper manufacturers raising kraft paper price by Rs 2,000 a tonne to Rs 22,000 a tonne in two months.

“Our wafer thin margin has shrunk further as prices across all grades have gone up by Rs. 2,000 per tonne. The industry will be wiped of if urgent attention is not given,” said Mr Pradip Bosmaya, President, Western India Corrugated Box Manufacturers’ Association.

Uses

Corrugated boxes are vital for packaging and transportation of products and fresh produce and meet the packaging needs of the FMCG, electrical and electronics and other industries.

Internationally, there is an upward trend in the price of kraft paper due to high demand. The manufacturing cost of paper companies has risen substantially because of higher raw material cost such as waste paper and wood pulp.

“We have launched special campaigns on the need to reuse wastepaper. In developed economies wastepaper reuse is up to 60 per cent while in Asian countries it is 40 per cent. In India, we reuse only 20 per cent of about 2 million tonnes per annum. Our target is to increase the reuse at least to the Asian countries level,” said Mr Pradeep Dhobale, President, Indian Paper Manufacturers Association. The quality of fibre—used for stitching—is also deteriorating due to repeated re-cycling.

“Starch prices have gone up by almost 50 per cent in one year. So the adhesive costs have gone very high. Galvanized iron wire is another input that has gone up by 35-40 per cent in one year,” Mr Bosmaya said.

Customers are demanding the best and there is a pressure for the small scale industry to upgrade manufacturing facilities. “There is a pressure to install world-class technology. So, the capital investment is going up and servicing high investment need better margins for which our customers are not readily agreeing,” said Mr Bosmaya.

For duty-free import

With many manufacturing companies investing in India, it is only a matter of time before they set up their own corrugated box manufacturing facilities to cater their high quality standards.

To gain an international edge, the Federation of Corrugated Box Manufacturers of India, the national apex body representing the industry, has appealed to the Government to allow duty-free import of kraft paper to help the industry compete with international players.

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