Raw material price hike leaves corrugated box manufacturers worried
KARUR: A sharp and frequent rise in the price of raw materials used by corrugated box making industries and the rise in GST has raised concern among manufacturers.
The industry, one of the major ones, has been facing a crisis owing to several factors, including shortage of paper, drastically increased prices of raw materials, diesel and GST. There are more than 500 industries functioning across the State.
As far as Karur is concerned, there are around 40 factories functioning in the district, employing more than 2,000 labourers. The crises have put their livelihood in jeopardy.
A Karthikeyan, a corrugated box manufacturer from Thozhilpettai in Karur, said, "Production cost has reached an all-time high owing to the drastic rise in the price of raw materials, fuel expense and revised GST, forcing many industries to shut shop. More than 60 per cent of the boxes manufactured here are sent to mosquito net and textile manufacturing and exporting industries across Karur district. And the remaining boxes made here are sent to nearby districts, including Tiruchy, Dindigul, Erode and Salem for food and pharmaceutical products. So, transportation is one of the predominant aspects of our trade. But, the radically rising fuel prices have left a huge dent in our livelihood.
Paper mills have also been increasing Kraft paper prices, citing shortage of coal and imported waste paper. This will eventually reflect in the prices of the other products and finally, the consumer will be the one who is forced to shell out more money. We need a permanent solution from the government."
South Indian Corrugated Box Manufacturers Association's vice-president S Thirumoorthi (Coimbatore Chapter) told TNIE, "The cost of raw materials, including paper, pins and glue, has increased by 15 to 20 per cent recently. The hike has been quite frequent too. Owing to coal and container shortage, paper mills have hiked the price of paper. To make matters worse, the Union government recently increased GST for corrugated boxes from 12 per cent to 18 per cent, which delivered a huge blow to the manufacturers.
While GST for corrugated boxes has been increased to 18 per cent, GST for paper remains at 12 per cent. So we have been forced to shell out extra." Adding that the Union government must either revise the GST rates and make it equal for both paper and boxes or reduce the rate to the previous 12 per cent, he further said the government must take steps to stop the export of paper to other countries until paper shortage is cleared.