Corrugated box manufacturers are passing through tough times with raw material prices shooting up and buyers of their finished products resisting price hikes.
While a majority of of manufacturers are in the small and medium enterprise segment, and those in Andhra Pradesh and Telangana (2,500 units of 25,000 units in India) striking work, as an association, they are planning to move the Competition Commission of India (CCI) against what they contend is cartelisation by paper mills.
M.L. Agarwal, Past President, Federation of All India Corrugated Box Manufacturers, said there has been an unprecedented price hike in raw materials being supplied by mills without any immediate trigger. The price was increased in January and it has become impossible to manage the situation as their buyers are unwilling to bear the additional cost.
“So we are in a situation where there would be no option but to increase the prices of finished items if the current rates of raw materials continue and are passed on to the consumer,” he said.
“We are in the process of finalising plans to take up the issue of price increase by paper mills with the CCI. We have received a letter from mills on their move to hike prices. This only shows that they have cartelised,” he said.
The country's corrugated box manufacturing business is estimated to be about Rs 20,000 crore and growing at about the rate of the country's GDP. But if the current situation of spiralling costs continues, we will have no other option to shut down mills, jeopardising the jobs of employees in these mills, Agarwal said.
Of the 25,000 mills in the country, about 2,500 are located in AP and Telangana, employing about 80,000 people, MVM Bharat, President of Telangana Corrugated Box Manufacturers' Association said.
Mills have been on strike since the last three days and would strike work on Tuesday as well, he said.