Corrugated box industry upset over collective closure by paper mills for price hike of raw material

New Delhi, Mar 28 (KNN) The Corrugated Box Manufacturers, who are mostly the micro, small and medium enterprises (MSMEs) are upset over the increase in price of kraft papers by the paper mills and have threatened to stop manufacturing in case the mills increase the price.

Talking to KNN, Kirti Modi, President, Indian Corrugated Case Manufacturers Association (ICCMA), said, “The paper mills have increased the price by Rs 3 per KG. The move will hit the supply by atleast 20 per cent.”

The Corrugated Box Manufacturers have been saying that the paper mills have increased the prices without even holding talks with them.

In a notification, the joint action committee of Corrugated Box Manufacturers Associations from North India said the industry is starting huge losses due to the blatantly unethical and collusive action of paper mills of jointly closing their plants on pre-decided dates in an attempt to create shortage and simultaneously announcing a price increase.

The mills went on collective closure from March 23-27 followed by further closure announced, from April 23-27. Each closure is accompanied by a price increase of Re 1.00 per kg, taking the total increase to Rs 4.00 per kg by April 2016.

“They (paper mills) have increased the prices without consulting us,” he said adding that the manufacturers will stop unloading trucks from the paper mills.

“If they stop supply in April, we will also stop manufacturing,” Modi said.

Meanwhile, the Joint Action Committee of Corrugated Industry of North India has decided not to accept deliveries from paper mills from March 28-31 and are also planning total closure of the industry for 4 days in April 2016.

India’s corrugated box industry, which has around 10-12 thousand micro and small units, is a margin based industry where the profit margins are very thin and the industry is highly competitive. 

The major buyers for corrugated boxes are FMCG companies followed by Pharmaceuticals, Dairy Products, white goods, textiles, automobile, and engineering product manufacturers. (KNN Bureau)