Corrugated box manufacturing sector mired in difficulties

Trouble for the already-suffering corrugated box manufacturing sector only seems to have multiplied in the recent past. After the economic downturn, it is now exorbitant costs of raw materials plaguing the SME corrugated box manufacturing units. Steep hike in prices of essential raw materials is making it difficult for small-scale corrugated box manufacturing units to continue their production, while also compelling a few to stop their operations temporarily.

Cost pinching corrugated box manufacturing units

Unprecedented increase in the prices of chief inputs like kraft paper over the last few months has become a cause of concern for the small-scale industrial units engaged in corrugated box making.

"Most of the SME corrugated box manufacturing units are finding it difficult to meet their raw material requirement due to the meteoric rise in input costs. Multiple increases in price of kraft paper in the recent times by the paper mills has put corrugated box units in a disadvantageous position," said D Shah, proprietor of Bhagirath Boxes Private Ltd, a small-sized corrugated box maker in Ahmedabad.

Besides sustenance, the issue of competitiveness of SME corrugated box making units has also come under serious threat.

"As raw material price increases, corrugated box makers and suppliers are also forced to pass on the price hike to end-consumers. This is leading to erosion of their price-competitiveness in the market, thereby also resulting in depletion of margins for the small-scale units in the sector," said Sunil Kumar, proprietor of Alok Packaging Industries, a small-sized corrugated box manufacturer in Hyderabad.

To further add to the woes of corrugated box manufacturing units, kraft paper mill suppliers are calling for frequent collective shut down of production to get the spiked prices accepted in the market. Surge in labour costs among other issues also seem to be a pertinent factor that can hinder the growth of the sector.

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