Corrugated box industry- another victim of rupee depreciation
Updated: Sep 05, 2013 04:20:26pm
New Delhi, Sept 5 (KNN) The corrugated box industry has demanded an increase in price of their products as the rising input costs have crippled the industry with higher cost of production by almost 25 per cent coupled with a 15 per cent lower demand from the industry.
“The industry, primarily, operating in the small and medium sector, is currently reeling under tremendous cost pressure and its survival is in stake. The cumulative impact of hike in all input costs comes to 15 per cent,” said the Federation of Corrugated Box Manufacturers of India.
Kraft paper, the industry’s major raw material, has been subjected to multiple and prohibitive increases, it said in a notification.
The rupee depreciation has further hit the industry, due to more input costs for raw materials.
The extreme volatility on the paper price front has impacted smooth functioning of all the units, it added.
“The raw material, Kraft paper is mainly imported from European countries and US. Raw material prices have gone up by 20 per cent. Moreover, with the diesel and petrol hike and rupee depreciation the industry is overburdened. The cost of production has gone up by nearly 25 per cent,” said CEO of the Pinkcity Corrugators, Gobind Gurbani from Jaipur.
“On one side the paper mills are raising prices relentlessly and on the other side all our critical inputs like starch, wire, fuel, diesel, manpower costs etc are climbing swiftly,” the Federation said.
Moreover, the overall slowdown in the economy has further slowed down the demand and need of the corrugated box, which is used as an end product for packaging of goods.
“Corrugated boxes are used as an end product for packaging; it’s not a raw material so it’s difficult to immediately increase the price. The service industry takes time to increase the prices. Cartons are not a commodity,” said Gurbani.
The market is very competitive, so the entire industry is incurring loss. With the total slowdown in the market, the productions have gone down, so the packaging has also gone down. We are facing approximately 15 per cent lower demand, Gurbani added.
Prices of corrugated sheet and converted boxes have remained low due to the over-capacity, manual operations and low productivity. Besides, transport constraints and high freight costs have meant that small to medium sized corrugated box plants are located near the customers.
The over 4,000 corrugated board and sheet plants are highly labour-intensive, employing over half a million people – both directly and indirectly. The industry is converting about 2 million tons of Kraft paper into corrugated boxes. Factories are spread-out in all parts of India, even in the remote industrially backward areas. (KNN/SD)
“The industry, primarily, operating in the small and medium sector, is currently reeling under tremendous cost pressure and its survival is in stake. The cumulative impact of hike in all input costs comes to 15 per cent,” said the Federation of Corrugated Box Manufacturers of India.
Kraft paper, the industry’s major raw material, has been subjected to multiple and prohibitive increases, it said in a notification.
The rupee depreciation has further hit the industry, due to more input costs for raw materials.
The extreme volatility on the paper price front has impacted smooth functioning of all the units, it added.
“The raw material, Kraft paper is mainly imported from European countries and US. Raw material prices have gone up by 20 per cent. Moreover, with the diesel and petrol hike and rupee depreciation the industry is overburdened. The cost of production has gone up by nearly 25 per cent,” said CEO of the Pinkcity Corrugators, Gobind Gurbani from Jaipur.
“On one side the paper mills are raising prices relentlessly and on the other side all our critical inputs like starch, wire, fuel, diesel, manpower costs etc are climbing swiftly,” the Federation said.
Moreover, the overall slowdown in the economy has further slowed down the demand and need of the corrugated box, which is used as an end product for packaging of goods.
“Corrugated boxes are used as an end product for packaging; it’s not a raw material so it’s difficult to immediately increase the price. The service industry takes time to increase the prices. Cartons are not a commodity,” said Gurbani.
The market is very competitive, so the entire industry is incurring loss. With the total slowdown in the market, the productions have gone down, so the packaging has also gone down. We are facing approximately 15 per cent lower demand, Gurbani added.
Prices of corrugated sheet and converted boxes have remained low due to the over-capacity, manual operations and low productivity. Besides, transport constraints and high freight costs have meant that small to medium sized corrugated box plants are located near the customers.
The over 4,000 corrugated board and sheet plants are highly labour-intensive, employing over half a million people – both directly and indirectly. The industry is converting about 2 million tons of Kraft paper into corrugated boxes. Factories are spread-out in all parts of India, even in the remote industrially backward areas. (KNN/SD)
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