Economy

Corrugated box makers want duty on kraft paper scrapped

Our Bureau Mumbai | Updated on March 09, 2011 Published on March 09, 2011

The corrugated box industry has appealed to the government to scrap the 5.2 per cent customs duty on the import of kraft paper to help them tide over the sharp increase in input costs.

The Indian Corrugated Case Manufacturers' Association (ICCMA), an all-India body of corrugated boxes manufacturers, says the current predicament is the result of galloping kraft paper prices and escalation in the costs of other essential inputs in the last couple of months. The cumulative impact of these hikes, according to the industry, is in excess of 20 per cent.

“The rising energy and labour costs, together with the rising cost of starch, wire and other essentials have put the industry in a quandary. The industry has recently made huge investments in upgrading technology to match international standards,” said Mr Kirit Modi, President, ICCMA.

Cost of imported raw materials has gone up by 69 per cent to Rs 16,400 a tonne from Rs 9,700 in the last one year. Cost of other inputs such as chemicals and power has also increased, said a company official.

The corrugated box industry in India is very fragmented with over 20,000 units manufacturing about 3.5 to 4 million tonnes of kraft paper. The industry employs about one million people directly. Majority of these are made of small and medium units, which are conventional semi auto manufacturing units.

The inflationary trend in the economy has aggravated the woes of the industry which has embraced latest technology-based automatic board plants to upgrade quality to the international standards.

These units have come up in across states to ensure far better quality and just-in-time deliveries for domestic companies and exporters in various sectors including engineering goods, pharmaceuticals, processed foods, textiles and garments, beverages, FMCG products, consumer durables, fruits and vegetables.

It is the most accepted mode of packaging because it can be entirely recycled.

Published on March 09, 2011
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