SICBMA urges kraft paper export ban

The association’s request comes close after the report that more than 2,000 corrugated or carton box units in Tamil Nadu and Puducherry are on the verge of closure due to an export-led shortage and sudden increase in kraft paper prices.

The price of kraft paper, the main raw material for the industry, has risen over the last few months. Manufacturers attribute it to increased exports of the commodity to China, which has switched to using pure paper fibre from this year.

G Nagaraj, president, SICBMA, said, “There are about 2,000 units in Tamil Nadu and Puducherry engaged in the manufacturing of corrugated boxes. They employ nearly one lakh people — about 60% of them are women. The cost of kraft paper typically accounts for 85% of the production cost of corrugated boxes. With the steep rise in the price of kraft paper, triggered largely by the export-led shortage, the cost of manufacturing corrugated boxes has risen by 60%.”

He added that being a highly competitive sector, producing an essential packaging product, the box manufacturers work on a very thin margin. “Most industries can neither accommodate the sudden rise in the raw material cost nor pass it onto the end customers. Unless export is banned and supply of kraft paper is ensured, many industries will have to wrap up their business.”

Nagaraj observed that the supply of kraft paper has shrunk by over 50% in the local market in recent months, hitting production, and threatening to send hundreds of SMEs in Tamil Nadu and Puducherry packing.