Box makers ask for 23% increase

Liner price increase hits corrugation industry

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On 20 March 2017, Tamil Nadu’s corrugated box manufacturers observed a one-day strike to protest the ‘abnormal’ price increases by paper mills supplier corrugation liners (also called kraft or Kraft). “Paper mills have joined hands and are raising the price of Kraft paper every fortnight in addition to cutting their production by closing their factories for 4 days in a month,” said G Raj Kumar, secretary of the South India Corrugated Box Manufacturers’ Association.

The one-day protest at Valluvar Kottam, Nungambakkam in Chennai drew 500 box converters whose association claims that the liner price hikes threaten 3,000 plants and as many as one lakh direct employees in the region. Industry insiders claim that the prices
of kraft paper have risen by 23% in the past quarter, currently ruling at Rs. 31 per kilogram—a rise of Rs. 7 during the quarter across varieties.

Kirit Modi of Pyramid Packaging, perhaps the largest corrugator with several plants across the country, says, “Unless box users, including large fast moving consumer goods (FMCG) companies grant a minimum 23% price increase quickly, units in this industry will face closure shortly. At the same time, paper mills are being requested not to shut operations to avoid stockout situations of boxes. Maintaining the price of corrugated boxes at the current level would force closure of production lines.”

Modi was speaking in his capacity as president of the Indian Corrugated Case Manufacturers Association (ICCMA), a pan-India body that represents over 200 large producers contributing around 40% of India’s total corrugated box output. While it is estimated that there are over 12,000 existing corrugated box making units in the country,
200 automated manufacturing units contribute nearly 40% of the value generated while another 2,200 semiautomated and partly organized units contribute another 40%. The balance 20% is said to be produced by approximately 9,500 smaller plants.

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