The corrugated box manufacturers are passing through tough times with the raw material prices shooting up and the buyers of their finished products resisting price hikes.
While a majority 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.
ML Agarwal, former President, Federation of All India Corrugated Box Manufacturers, said there has been unprecedented price hike in the raw materials they are being supplied by mills without any immediate trigger. The price was increased from January and it has become impossible to manage the situation as their buyers are not willing to bear the additional cost.
“So we are at a situation where there would be no option but to increase the prices of finished items if the current rates of raw materials continues and pass 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 domestic corrugated box manufacturing industry size is estimated at ₹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 but to shut down mills jeopardising the jobs of employees, Agarwal said.
Of the 25,000 mills in the country, about 2,500 are located in AP and Telangana, employing about 80,000 people.
Mills are on strike from the last three days and will continue to strike work on Tuesday, said MVM Bharat, President of Andhra Pradesh Corrugated Box Manufacturers Association.