Prices have increased by 25% in the last three months, and out of approximately 300 units in the city, 290 will halt production for a week, as reported by my city reporter in Kanpur. The packaging units will be at risk of spoilage, which needs to be addressed.
Currently, there are about 30 employees working in the industry. Due to the arbitrary actions of paper mills, production in most units has been cut by half in three months. The prices of kraft paper have surged by 20 to 25%, creating a working capital crisis. Small industries are bearing the brunt of these price hikes without any prior notice.
The packaging industry primarily caters to FMCG (Fast-Moving Consumer Goods) and manufactures boxes for various products. They have annual agreements to supply cartons, and this uncontrollable increase in the price of kraft paper directly affects FMCG products, leading to inflation for consumers. Key figures present during the discussion included Sandeep Patni, Shailendra Singh, Naveen Jain, Subhash Jain, and Anand Bhatia.
The Packaging Industry will be shut down as soon as the festival begins
Jagran Correspondent, Kanpur: With the onset of the biggest festival of the year, the corrugated box industries are preparing to close. Corrugated box manufacturers are accusing paper factory owners of arbitrarily increasing and decreasing prices and have announced a week-long strike starting October 5. This information was provided by officials from the Kanpur unit of the Uttar Pradesh Corrugated Box Manufacturers Association on Friday.
Association President Vivek Kanodia, General Secretary Sandeep Patni, former President Sandeep Arora, Shailendra Singh, Subhash Jain, and Anand Bhatia stated that this decision was made in protest against the arbitrary pricing of paper by entrepreneurs. There will be a crisis affecting the sales of industries relying on packaging.
Currently, the price of kraft paper is between ₹36 and ₹42 per kg, depending on quality. Over the last three months, paper mill owners have been increasing prices arbitrarily, causing distress among cardboard box makers. Although the increase in prices is not unexpected, the speed at which prices are raised is troubling, as it inflates the cost of production, and manufacturers are hesitant to pass these costs onto consumers.
In Kanpur, there are about 300 corrugated box manufacturing units. Except for 10 to 12, the rest are micro industries. The suppliers of cardboard are large enterprises, as are the clients who purchase the boxes. The city’s units consume 3,000 tons of cardboard daily. If these units stop taking cardboard and halt box supplies, it will severely impact both sides. If no resolution is reached, the week-long strike may be extended.
Himachal Pradesh Cardboard Industry Association Calls Emergency Meeting
Date: October 1, 2024
Due to a 30% increase in the price of paper over the last three months, about 250 cardboard box manufacturing industries in Himachal Pradesh are on the verge of closure. Paper mill operators have been ignoring regulations and increasing paper prices each month. This has led to an estimated loss of over ₹50 crore across the state and has resulted in a payment crisis. The cardboard industries, troubled by the arbitrary actions of paper mill operators, are unable to fulfill orders for their customers. The Himachal Pradesh Cardboard Industry Association has convened an emergency meeting on October 1.
The supply of paper for corrugated box manufacturing comes from Muzaffarnagar, Kashipur, Meerut, Punjab, Haryana, and Himachal Pradesh. The actions of paper mill operators are adversely affecting industries statewide. The cardboard industry is losing an estimated ₹50 crore due to these arbitrary pricing practices. The losses are expected to reach ₹10,000 crore.
Mill operators have been falsely claiming a paper shortage to justify price increases during peak seasons and have closed mills for several days. This pattern has persisted for the last three months, with prices rising by ₹2 to ₹2.5 per kilogram each month. Recently, mill operators announced closures from September 28 to October 6 to drive up prices. The continuous price hikes make it increasingly difficult to operate, leading to a payment crisis as well. The industry has nearly exhausted its paper stock, with mill owners only supplying paper 15 to 20 days after orders are placed.
President of BBN Udyog Sangh Hemraj Chaudhari stated that the BBN region is a hub for corrugated box and paper printing industries. Former state president of the Himachal Pradesh Cardboard Industry Association Surendra Jain and BBN president Hemraj Chaudhary emphasized that the Competition Commission of India (CCI) was established to maintain market competition, ensure freedom of trade, and monitor prices.
Four years ago, the commission imposed a ban on the arbitrary pricing practices of paper mill operators, who had provided an affidavit promising not to increase prices without justification. However, they have resumed these practices. The CCI should form a committee to investigate this matter thoroughly. The closure of corrugated box industries before the festive season could negatively impact the market and economy, as no product is sold without packaging. The increasing price of paper poses a potential employment crisis for approximately 15,000 workers directly involved in this business, which is on the verge of collapse
