COIMBATORE: The rise of raw material price has pushed corrugated box manufacturers in a tight spot. The sector employs over 50,000 workers in Tamil Nadu and their lives are in jeopardy as several units are on the verge of suspending or shutting down operations.
The industry is the key provider of packaging material to pharmaceutical, FMCG, food Industry, automobile, electrical appliances and several other sectors. It is an eco-friendly industry that uses kraft paper as raw material. Discarded boxes are collected from the market and recycled into is kraft paper.
S Thirumoorthi, president of the South Indian Corrugated Box Manufacturers' Association (Coimbatore Chapter) said majority of the industries rely on imported paper pulp and Covid affected the supply chain. The dip in import of pulp triggered a shortage and jacked up prices.
"The price of kraft paper doubled since 2019. It increased by 25 to 30 per cent in the past one week alone. Mill owners said the price fluctuation is likely to continue till imports stablise. To protect the domestic industry, the Union government must ban export of kraft paper and ensure regular supply of waste paper to the industry," he said.
Karthick, a box manufacturer said "Adding fuel to the fire, the Union government has increased GST on Corrugated boxes from 12 per cent to 18 per cent while GST on paper remains at 12. This is placing a huge financial burden on the manufacturers. Either GST should be reverted or GST on both boxes and paper should be 15 per cent. Several units have shut down and many are on the verge of calling it curtains due to the irregular price hike."
Paper used in south India: 18 BF to 28 BF
Paper used in north India: up to 35BF
Cost of 1 kg of 18 BF paper: Rs 43
Price 3 months ago: Rs 34