By the end of 2020, Amazon will have a record holiday. Throughout the festival, Amazon delivered 1.5 billion packages to the world. As a result, Amazon and other large retailers have snapped up most of the world’s cardboard boxes to complete delivery of online orders.
At present, it is well known that the domestic price of waste paper in India has tripled, from 1850 rupees per ton last year to 5500 rupees per ton, which can be reused for the manufacture of new packaging corrugated boxes. That’s why in March, some state carton manufacturers’ associations across India went on strike.
Strike carton manufacturer
The South India corrugated box manufacturers association (SICMA) urged the centre to immediately ban all forms of kraft paper exports. “Tamil Nadu and puducheri have about 2000 units engaged in corrugated box production,” said nagalaji, President of SICMA. They employ nearly 100000 employees, about 60 per cent of whom are women. Kraft paper costs 85% of the cost of corrugated box production.
The cost of producing corrugated boxes has risen 60 per cent due to the sharp rise in kraft paper prices, mainly due to the shortage caused by exports. ” Nagaraj added that as a competitive industry in the production of basic packaging products, the profits of cartons packaging manufacturers are extremely thin.
“Most industries are unable to adapt to the sudden rise in raw material costs or to pass them on to end customers. Unless exports are prohibited and the supply of kraft paper is ensured, many industries will have to close their business. ” Rajish Batia, President of the corrugated box manufacturers association of Uttar Pradesh, held a press conference in Varanasi.
Battia said the price of kraft paper has risen nearly 60 percent over the past three to four months, which is the main raw material used in the packaging industry. The Association asked Narendra Modi, a member of the Varanasi Parliament and Prime Minister of India, to investigate the matter and to act on the unprecedented growth in the value of kraft paper.
Harris Madan, vice president of the Indian corrugated box manufacturers association (iccma): China’s demand gap and attractive prices are shifting domestic market demand for Indian kraft paper and raising the price of domestic finished paper and recycled fiber. This year, the export of recycled kraft pulp from Indian kraft paper plant will reach about 2 million tons, accounting for about 30% of the total domestic production of kraft paper. It was zero exports before 2018, and the current form changed the status of the supplier. In addition to the increase in kraft paper costs, other costs (such as human costs, starch and freight) have also seen a significant increase of 60-70% in the past few years. China’s growing demand for kraft pulp is pushing at least 20 per cent of Indian cartons producers to the brink of bankruptcy.
Similarly, rajdra Mittal, chairman of the indor paper Traders Association, said: “supply of factories has declined dramatically. We ordered less than half of the materials from the factory. The decrease in pulp and freight led to higher prices. “
“The cost of raw materials, whether it’s paper, starch or other items, is rising,” said sanyev sureka, chairman of the central corrugated box manufacturers association. This raises manufacturing costs. We are considering raising the price of corrugated boxes. “
“From the first day of the city blockade, the industry has been operating at a rate of 24/7. They were the first to start the plant in accordance with Indian government SOP and guidelines. Carton manufacturing is crucial because it can pack food, medicine, disinfectants and other items. We are talking about 10000 factories that will provide food directly or indirectly to hundreds of thousands of families. “
When he interviewed a major cartoner manufacturer in Chennai, he said five things: first, the paper mill formed a monopoly group. Second, all paper factories hold a unified position on price increase; Third, the shortage is because the domestic factories are exporting paper to China and South Korea; Fourth, the increase of export leads to the shortage of domestic waste paper; Fifth, the use of kraft paper has increased by 40 per cent over the past three months.
This has brought worrying consequences to the packaging supply chain. Since the first week in March, many paper mills have been updating their paper offers and say the price will be effective for the next 24 hours.
Swadesh Sharma, President of the master printer Association of indal: the printers face uncertain market behavior in the pricing of raw materials. This starts in October 2020. Today, not only is the price, but also the availability of paper and board a huge challenge. Most executive standard manufacturers order products from customers on a regular basis, and their packaging needs depend on us. Now, if we can’t supply, the delivery and delivery of big brands will not be completed. The result is that we will lose long-term contracts and future orders.
What is the current recycling situation?
One of the adverse factors of the popular trend is that it has a negative impact on the recycling industry. Basically, the recovery system is interrupted, which leads to a shortage of raw materials in the supply chain. “China’s restrictions on the import of waste paper have forced major nations such as the United States to look for new markets for recycled materials, usually at lower prices,” said a kraft paper trader In India, 75 percent of corrugated cardboard packaging is recycled. It varies by region.
However, each newly manufactured carton is made of about 75 per cent of recycled material. The remaining 25% are new raw fibers. But now, even the unremarkable share of cartons can take longer to return to the paper mill. Pramod Agawal, chairman of the Indian Association of agricultural and recycled paper mills (iarpma), called the crisis “a rush of eyebrows” and blamed waste paper suppliers for raising raw material prices.
According to iarpma, the renewable fiber sector in the industry is facing a shortage of waste paper, and the basic raw materials of the industry are currently an urgent problem to be solved. The paper supplier controls the price, so the paper mill has no choice but to reduce the paper production according to the supply and inventory of raw materials. “There is no doubt that this shortage of waste paper and uncontrolled prices could continue until now in 2021,” iarpma said
Agawal said prices for waste paper are expected to rise reasonably due to a shortage of supply in post epidemic times. The price of kraft paper waste paper has risen to 22 rupees per kilogram, which was INR 10 in the period prior to the outbreak“ The industry cannot afford this uncontrolled price rise, as it currently purchases it at RP 22-24 per kilogram. It also cannot pass on price rises to end users, especially because of the prevailing situation in the country. “
Another issue in the supply chain related to the pandemic is the lack of containers for transporting recycled materials to countries that accept the country, such as India. At present, even if there are containers, the freight cost will increase greatly.
Sandip wadva, chairman of the Indian corrugated box manufacturers association (iccma): the industry is in trouble under the double blow of a sharp rise in raw materials and a disruption in supply. India’s kraft paper exports to China have surged as China banned imports of waste paper from January 1, 2021. Exports from India appear in the form of recycled kraft pulp. This caused serious shortage of raw materials in corrugated industry in China. The government needs to intervene and ban the export of recycled kraft paper and pulp, which is likely to collapse, as the corrugated packaging industry provides more than 600000 jobs in India.
These and other supply chain issues have contributed to the cost of waste paper. Less recycled paper in a timely and clean manner means that the supply of new cartons will be reduced, which is one of the root causes of the current crisis in India“ This is closely related to the survival of enterprises and industries. If this continues, many companies may have to close. ” At FICCI’s world food conference in India, top food brands mentioned the crisis in their speeches. They say the shortage of cardboard could lead to delays in delivery, package damage and increased costs, which is a very serious crisis.
Post time: May-27-2021