COIMBATORE: Unpredictable market situations force us to change quotations every 30 days instead of once every six months, said corrugated box manufacturers. They further alleged that due to the drop in export orders and garment and textile sectors' orders, coupled with a hike in electricity charges, many units suspend production for a day once in ten days.
"Even during the Covid-19 pandemic, when the price of basic grade raw material used for manufacturing the corrugated boxes stood at Rs 54,000 per tonne, we used to run the business. Now, the price has dropped to Rs 30,000, but we are facing trouble as we have fewer orders from garment and textile units from Coimbatore, Tiruppur, and Karur. Also, we could not predict the market. For instance, the basic grade paper cost was Rs 32,000 per tonne on August 15. Now, it dropped to Rs 30,000. The fluctuations lead to changing of quotation often," said S Sanjeeth, a unit operator.
He said decreasing orders from apparel, hosiery, garment, and mills caused production to stop in recent days.
S Thirumoorthy, president of South Indian Corrugated Box Manufacturing Association said, "Orders have dropped drastically. For instance, units that were producing 150 tonnes per month in the corresponding period last year are now manufacturing up to 30 tonnes. Similarly, units which produced 30 tonnes are now down to five tonnes. As many as 12 operators in the region closed their units in recent times and sold machinery as they could not sustain in the business."
He pointed out electricity charge hikes coupled with their issues in the business.
"We have 200 members and around 100 non-members in the region up to Salem. Many units go with production stoppage even two days a week. We could not calculate our EB charges. There is a drastic increase after the hike and introduction of peak hour charges. A 30-ton production capacity unit's EB charge is increased to Rs 40,000 to Rs 60,000 per month."
An executive member from Tiruppur Exporters Association (TEA), who does not want to be named, said, "Export to the USA has come down by 35% and Europe by 40% due to various factors, particularly the impact of the Russia - Ukraine war. We expect that the business will revive in September mid in the view of Christmas and New Year."
However, KM Subramanian, president of TEA refused the claims and said there is no drop in orders.
"The orders are slowly picking up. As compared to last year, the current situation is fine. Tiruppur gets up to Rs 33,000 crore business this year." He opined that due to the increase of new units in corrugated boxes, manufacturing may be a reason for a drop in business unit-wise."