Tin plate supply to create metal packaging obstacle

WhatPackaging? readers will recall how in order to ensure use of prime tinplate for food products, the MCMA had recommended to the Steel Ministry to consider ISO along with BIS standards for sourcing raw material. Read the full story here.

Now, as per the MCMA official statement, "MSMEs engaged  in the business of metal cans, containers and components  have stated there is going to be  an  acute shortage of raw material as the global players have refused to accept their orders to providea tinplate/tin  free steel. (Meanwhile) the domestic market is not so equipped to fulfill the demand."  The industry's tinplate/ tin free steel demand is 700,000 tonnes per annum.

The metal packaging industry is largely dependent upon the import of tinplate/ tin free steel - and is under tremendous pressure since there is a shortage of raw material and the prices have escalated more than 15% recently.

On 17 July 2020, the Ministry of Steel, the government of India issued an order called: the steel and steel products quality control order (QCO). This QCO imposed mandatory BIS Certification on the major input required by the industry like tinplate/tin-free steel. Furthermore, it imposed restrictions on steel products like easy-open ends, peel off ends, which the industry is importing from various countries. Sanjay Bhatia, the president of the MCMA and the director of Hindustan Tin Works, said, "The QCO has been notified at a time when the entire industry is struggling hard to reset their business during these Covid-19 times.  Also, it is virtually impossible to force the international suppliers to go for BIS certifications as the procedure of BIS registration is highly cumbersome."

As per an official statement issued by the MCMA, "The ₹10,000-crore metal container packaging industry is in a crisis due to the shortage of raw material used for packaging food and other items that have resulted in an increase in prices of packaging items." The tin containers and closures are used for packing of edible and non-edible products. And the tin-free steel is mainly required to manufacture crowns, closures and components used to seal bottles for soft drinks, beer, juices and flavoured milk.

The MCMA  has also requested the ministry of steel to allow use of ISO certification materials in addition to BIS certified material. MCMA requested the Ministry to allow the use of materials which are aligned to ISO. The same has been included in the FSSAI order and also recommended by the Ministry of Micro, Small and Medium Enterprises ( MSME).

Bhatia said, "Today, the industry requires seven-lakh tonnes of raw material, about 4.5-lakh tonnes is produced by the Tinplate Company and JSW Steel, while the rest is imported. Since the order directly impacts imports, there is a raw material shortage and this has resulted in upward price revisions."

Bhatia added that the steel and steel products quality control order dated July 17, 2020, which directs usage of BIS certified raw materials, has had a huge impact on the country’s metal container packaging industry. "This has resulted in a shortage of raw material as imported inputs do not have BIS certification."

“Following representations by the MCMA, the government which had ordered that this will come into implementation from 17 January, had postponed it till 17 April 2020. However, the industry needs some more time, Bhatia said.