The corrugated box industry has urged the government to ban the exports of recycled kraft paper pulp rolls to help availability of raw materials in the country and control the surge in prices.
The industry is reeling under the twin blows of sharp rise in raw material as well as disruptions in its supply, stated Sandeep Wadhwa, president of the Indian Corrugated Case Manufacturers’ Association (ICCMA).
“The exports of kraft paper from India to China have surged as China has banned the import of waste paper from 1 January 2021. Exports from India are in the form of recycled kraft paper pulp rolls. This has created a huge shortage of raw material for the domestic corrugated industry,” Wadhwa added.
According to Wadhwa, there is a need for the government to step in and ban exports of recycled kraft paper pulp rolls as the domestic corrugated industry that gives employment to over 6 lakh people, is on the verge of closure.
Harish Madan – vice president of ICCMA said, “The demand gap and attractive pricing in China is diverting the output of Indian kraft paper from the domestic market and driving up the domestic prices of finished paper and recycled fiber. Exports of recycled kraft paper pulp rolls by Indian Kraft paper mills would touch about 2 million tonnes this year, roughly 30% of total domestic kraft paper production in India.”
Madan added that this development, based on zero export before 2018, is a game-changer in supply-side dynamics going forward.
In addition to the increase in the costs of kraft paper, he said other conversion costs like man-power costs, starch and freight have also witnessed a huge increase by 60-70% over the past few years.
According to Madan, at least 20% of Indian box makers are on the brink of closure due to China’s burgeoning demand for kraft pulp rolls. The corrugated box industry in India has over 350 automatic corrugators and more than 10,000 semi-automatic units, mostly in the MSME sector.