Corrugated boxes may see increase of 15-18%

Perturbed over steep increase in paper prices in the last two-three months, Himachal Pradesh-based corrugated box manufacturers intends to increase the price of corrugated boxes 15-18 per cent with immediate effect to save the corrugated sector.

The Himachal Pradesh Corrugated Box Manufacturers Association (HPCMB) said the industry is operating under a thin margin and going through the worst phase. They apprehend that a shutdown would have a drastic effect on the industry as packaging material is one of the most significant part of the supply chain.

There are over 250 corrugators in the state with an average paper procurement of 50,000 tonnes per month. As far as turnover is concerned, it is around Rs 3,400 crore.

Speaking to Business Standard, HBCMB President Mukesh Jain, said, "In the last 2-3 months, paper mills have hiked their prices by Rs 3,000 to Rs 4,000 per tonne. To implement this absurdity, the paper mills tend to create an artificial demand by shutting down mills for 5-7 days every month and subsequently demand unjust prices in an hour of such shortage. We are facing a rise in raw material prices, while we are not getting any increase in customer rates, who normally delay approvals, sometimes, for six months to a year."

Jain added it has become impossible for corrugators to procure goods at higher prices and sell at lower ones. Owing to this, many units in the region have shut down and more are on the verge of shutting down. He added, "We request box users to give a minimum 15 to 18 per cent price rise with immediate effect to save the industry."

Nirmal Singla, another industrialist, said raw materials other than paper like adhesives,stitching wires,ink etc. have witnessed a rise of 15 to 20 per cent. Besides, transport cost has also inflated due to hike in the diesel prices continuously. Industrialists said government should interfere in this in accordance with the Competition Act which would in turn help the corrugators to procure materials in time.

Industrialists said the effect of this is not only in Himachal Pradesh but on the nation as a whole. Recently, the national managing committee in a meeting held at Hyderabad, share their concern regarding this and expressed their opinion that national level conferences should be organised to increase awareness among the end-users.