Corrugated box makers want import duty on Kraft paper scrapped

R. Ravikumar Chennai | Updated on March 18, 2011 Published on March 18, 2011

Corrugated box manufacturers seek scrapping of Customs duty on the import of Kraft paper to help them tide over the shortage in the domestic market.

Corrugated boxes are used by almost all consumer-facing industries for secondary packaging of consumer goods including FMCG, pharma, textiles and durables.

Mr Vikash Goyal, Joint Secretary, Indian Corrugated Case Manufacturers Association, said while the demand for corrugated boxes is growing steadily at 10-15 per cent a year, Kraft paper supply in the market is not able to match the demand. Though he could not put an exact number to it, as both the box and Kraft paper manufacturing industries are very fragmented, he says, “The gap is huge.”

In addition, the prices of Kraft paper too spiralled up in the last two to three months mounting pressure on the manufacturing cost. Mr Goyal says including escalation in cost of other essential inputs such as starch and wire, there has been a cumulative impact of 20 per cent on the cost. According to Mr Kirit Modi, President of the association, there are roughly over 20,000 box manufacturing units in the country, making about four million tonnes of boxes a year.

Majority of the units, with conventional semi-automatic facilities, fall in the small and medium enterprises sector. However, some players have made huge investments and installed automatic plants with the sole objective of upgrading quality close to the international levels.

With the current widespread and ascendant inflationary trends in the economy aggravating the situation, “the industry has no choice but to increase the box prices and we seek the user industries' attention to tide over the crisis,” said Mr Modi.

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Published on March 18, 2011
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