Box and recycled paper manufacturers hit by high raw material prices

Waste paper prices have surged to ₹22-₹24 a kg from pre-COVID-19 prices of ₹10-₹13 per kg, an association said

March 06, 2021 02:04 pm | Updated 02:04 pm IST - COIMBATORE

Corrugated box manufacturers have urged their customers to increase sourcing prices, as these units are reeling under a sharp increase in prices and disruptions in the supply of raw materials.

The Indian Corrugated Case Manufacturers’ Association (ICCMA) has said in a press release that the total cost increase for box makers has crossed 70% cumulatively, on account of paper alone. “The Industry is bleeding on account of unprecedented hikes in the cost of its main raw material – kraft Paper. Kraft Paper Mills cite the rising prices of imported and domestic waste paper on the supply side post Covid-19 pandemic lockdowns and international logistics disruptions for the reduced availability,” said ICCMA president Sandeep Wadhwa.

According to the ICCMA, the demand gap and attractive pricing in China is diverting the output of Indian kraft paper from the domestic market and driving up the prices of finished paper and recycled fibre. Exports of recycled kraft paper pulp rolls by Indian kraft paper mills is expected to touch two million tonnes this year, which is approximately 20% of total domestic kraft paper production in India.

“The corrugated box industry in the country, with over 350 automatic corrugators and more than 10,000 semi-automatic units, mostly in MSME sector, is facing immense stress on account of these unprecedented cost increases,” the association said appealing to all box users, including large brand owners and other corporates, to go in for “fair price revisions” to cover the increase in raw material and conversion costs.

Meanwhile, the Indian Agro & Recycled Paper Mills Association (IARPMA), has written to the Union Ministry of Commerce alleging there is an acute scarcity of waste paper which has been artificially created by “certain vested interests”. The recycled fibre (waste paper) based paper mills, which account for almost 70% of paper and paperboard production in the country, say the key raw material prices have doubled over the last six months.

According to the IARPMA, from a pre-COVID-19 price range of ₹10-₹13 per kg, waste paper prices have surged to ₹22-₹24 a kg impacting the industry adversely. Kraft waste paper prices have also reached ₹22 per kg as against ₹10 during pre-COVID-19 period. “Certain waste paper suppliers are controlling the price and availability of waste paper and as a result, there is no option for paper mills but to cut their paper production as per the raw material availability and stock inventory”, said Pramod Agarwal, president of IARPMA.

The association has appealed to the government to intervene and crack down on illegal hoarding.

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