The corrugated box business is under severe strain because of rising commodity costs and disruptions in raw material supply. According to industry sources, the severe shortage, combined with an unprecedented price increase, has pushed manufacturers to the edge of bankruptcy.
Pharmaceuticals, FMCG, food goods, autos, electrical appliances, and other products use corrugated boxes as a primary packaging material. Kraft paper is the industry’s key raw material, and costs have risen almost 90-100 per cent since 2020, including nearly 35 per cent in the last few months alone.
The scarcity of imported raw materials, price hikes, and European countries’ bans on the sale of certain grades of waste paper to India have all exacerbated the scarcity of raw resources. “The situation has gotten worse,” said Kriti Modi, emeritus president of the Indian Corrugated Case Manufacturers’ Association (ICCMA).
The dramatic increase in wastepaper prices, along with irregular supply, exponential increases in shipping expenses, as well as fuel and starch costs, has pushed kraft paper prices to an all-time high. Imported Waste Price was $100 per metric tonne on January 1, 2020, and $350 per metric tonne on March 1, 2022, a 3.5x increase.
“While we must ensure that our customers’ lives are not disrupted, we cannot guarantee that any pricing will be changed, nor can we guarantee that any price will be fixed or that we will receive delivery confirmation from our suppliers-paper mills.” As a result, keeping our plants functioning is difficult for us,” said Sanjay Rajgarhia, President of ICCMA. “Our customers and the market are oblivious to the gravity of the situation.” Our bacs are completely against the wall.”