Paper Industry Faces Raw Material Shortage – Impact of Crisis Leaves Corrugated Box Makers in a Quandary

21 March 2022: According to news reports, the impact of the crisis that is being witnessed in the paper industry, seems to have affected the corrugated box or brown box manufacturers, who play a key role in the supply chain. The raw material shortage and rising input costs in the paper industry are among the factors that have affected the boxes that are used in packing all types of items ranging from electronics to e-commerce to farm produce to FMCG sector goods.

Sanjay Rajgarhia, President, Indian Corrugated Case Manufacturing Association (ICCMA), explained that the prices of kraft paper, which is used for manufacturing corrugated boxes have doubled – a record – in the last two years. In the last few months itself, prices have gone up by 25%. He underlined that the erratic flow of supplies has compounded the problems of soaring waste paper prices, soaring input costs, mainly fuel and starch. There are little signs of the trend reversing in the immediate future, he said.

Harish Madan, Vice President, ICCMA, emphasised that conversion costs have skyrocketed with the cost of starch rising by 35%, besides steel pins and stitching wires. Even ink prices have surged.

Chennai-based Vikash Goyal, a leading box manufacturer, points out that they have never faced such a situation before and what’s scarier is that the worst is yet to come. Trade analysts have conveyed that the prices of chemicals such as caustic soda have almost doubled in the last few months, making things difficult for the entire sector.

The corrugated box industry in the country comprises 400-odd automatic manufacturers and over 10,000 semi-automatic units, primarily micro, small and medium enterprises. It employs over seven lakh that could have a bearing on the economy if some of the units are shut.