There are 350 units in Andhra Pradesh, manufacturing around 120,000 tonne of corrugated boxes a year. The total turnover of the industry in the state is around Rs 500 crore.
APCMA, the first-ever body formed in India to represent the corrugated box industry around 38 years ago, had on June 6, 2008, got around 25 paper mills that manufacture kraft paper in the state to the negotiating table to frame a medium to long-term pricing policy and take a genuine price increase.
"During the meeting, the paper mills admitted that prices of raw material have dropped from $300 to $250 per tonne. Despite this, they have sent the corrugated box manufacturers in the state a revised tariff, which would see the prices of all grades of kraft paper increasing by Rs 1,000 per tonne effective July 1, 2008," ML Agarwal, past president of APCMA and managing director of Central India Group, told mediapersons.
The corrugated box industry produces around 3 million tonne of boxes from about 9,000 units across the country, employing more than 300,000 directly. The turnover of the industry is about Rs 10,000 crore.
"In the recent Budget, duty on paper was reduced to nil for the first 3,500 tonne of production. No mill has passed on this benefit to the customer and has increased the price of paper, amounting to around 35 per cent, to absorb the price duty reduction," he added.
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Agarwal said corrugated box still continues to attract 14 per cent excise duty while its prime input kraft paper is on the eight-per cent excise slab.
The association is appealing the Centre to contain the inflation by reducing the duty on par with that of paper. The revenue impact of that will be nil or negligible, he said.