Corrugated box producers body threatens to go on strike

As many as 250 corrugated box manufacturers have threatened to close their units for nine days if paper mills are not prevailed upon to roll back an abrupt hike in the price of kraft paper.

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Peeved over the arbitrariness of the paper mill owners, the box manufacturers are finding it difficult to supply goods to their customers as they do not get the conversion cost for every price hike. The HP Corrugation Box Manufacturers Association has called an emergency meeting on October 1 to discuss the crisis.

Hem Raj Chaudhary, president, Baddi Barotiwala Nalagarh (BBN) Association, said, “The arbitrary behaviour of the paper mill owners is affecting corrugated box manufacturers in the state. They create an artificial crisis to hike the price of kraft paper during the peak season. This trend has been going on for the past three months. Every month, the paper price is increased by Rs 2 to Rs 2.50 per kg.”

He said, “Paper mills were closed today. Such a trend has created a grave payment crisis. The corrugated box manufacturers have run out of stock. Due to the monopoly of the paper mill owners, kraft paper is supplied after 15 to 20 days of placing an order. We are unable to cater to the demand of customers.”

Surender Jain, former state president, Himachal Pradesh Corrugated Box Manufacturers Association, said, “Four years ago, the Competition Commission of India had ruled in our favour to curb the arbitrariness of the paper mill operators. A huge fine was to be imposed on the mill operators but due to the outbreak of the Covid-19 pandemic, they were let off with a warning not to increase the kraft paper price arbitrarily in future.”

The association urged the Competition Commission of India to investigate the matter. The closure of the corrugated box industries before the festive season could have an adverse impact on the market and the economy as no product is sold without a box. It could trigger an employment crisis for at least 15,000 workers.

Ashok Rana from the BBN Association rued that the paper mill owners had formed cartels in the past five years. They stopped production abruptly and also did not take orders for kraft paper. As part of a well-planned conspiracy, arbitrary prices were charged from the corrugated box manufacturers by citing a shortage in the market.

He said, “The price of paper has increased by 30 per cent in the past four months. Those who buy finished products from the corrugated box units are not ready to pay more.” He added, “The state government should intervene in the matter and curb the high-handedness of the paper mill operators.”

Annual turnover more than Rs 700 crore

• BBN requires 15,000 tonnes of kraft paper every month
• Annual business of kraft paper is more than ~700 crore
• 150 paper mill units in Uttar Pradesh and six in Himachal Pradesh supply paper to corrugated box manufacturers