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BIS standards wreak havoc in metal packaging industry

Our Bureau New Delhi | Updated on April 16, 2021

Foreign suppliers unable to get certification due to Covid-19 restrictions leading to raw material crunch

Metal packaging manufacturers are crying hoarse as the industry approaches the April 17 launch of official BIS standards on key raw materials tinplate and tin-free steel.

Foreign suppliers have not been able to obtain certification due to restrictions amid Covid-19, leading to a shortage of raw material in the import-dependent industry that has an annual turnover of ₹10,000 crore, according to Metal Container Manufacturers’ Association (MCMA) industry group.

Prices rise

Due to the shortage, domestic manufacturers JSW Steel and Tata Group’s Tinplate Company of India Ltd have jacked up prices, MCMA President Sanjay Bhatia told BusinessLine.

“Domestic suppliers have raised the price of tinplate products by 35-40 per cent since September,” he said. “They still can not meet the demand. There is a shortage of approximately 2.5 million tonnes in the market right now, which represents nearly 40 per cent of our demand. Metal packaging manufacturing is an essential activity but our plants are sitting idle.”

Cash flow has been doubly pressured due to heightened tinplate prices in the domestic market and the supply shortage leading to lower output, he added.

“The local mills claim to have annual rated capacity of about 7 lakh tonnes but they have never been able to produce more than 4 to 4.5 lakh tonnes,” Bhatia said.

“Various kinds of tinplate products are not manufactured in India,” he said. “Tin free steel is produced only by one mill which is Tin Plate Company and that too once a quarter; hence they are never able to meet the regular demand of the industry.”

Covid takes a toll

Foreign suppliers stopped taking new orders from India three to four months ago as they have not been able to obtain certification from the Bureau of Indian Standards (BIS), Bhatia said. “The procedure for BIS certification involves an official visit to the factory for physical inspection. That was a process of six-eight months but it is completely halted after Covid-19.”

“One of our suppliers, Nippon Steel, applied for a BIS License in January 2020 and so far none of the BIS representatives could visit them in order to qualify them,” he added.

The central government had passed the quality control order in July 2000, with the standards dated to get enforced from January 17 this year. After consultations with MCMA, the Ministry of Steel had postponed the enforcement by three months to April 17. The industry has appealed for it to be pushed to March 2022.

Published on April 16, 2021

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