Manufacturers of corrugated boxes used in packaging of FMCG products, on Thursday said the most of the units belonging to the MSME sector are facing challenges due to lack of demand arising out of demonetisation and steep increase in price of raw materials.
"The demon of demonetisation had hit the industry hard due to fall in demand for corrugated board boxes on account of slow movement of FMCG and other consumer goods.
"At a time when the industry was looking forward to a pick up in a demand, the situation has further worsened since January 2017 with the paper mills in rest of India, increasing the prices of the primary raw material - kraft paper by about Rs 3, 000 per tonne, " said Eastern India Corrugated Box Manufacturers' Association president Milan Kumar Dey.
"The very survival of the industry is at stake owing to the north ward movement of the prices of Kraft Paper and other costs, " Dey added.
He also said the cost of human resources, freight, overheads and other inputs such as stitching wire, gum, printing ink, binding cloth, etc.
have also witnessed an extensive increase in the last few years, leading to a direct impact on conversion costs by 50 to 60 percent.
Manufacturers sought increase of prices of corrugated boxes and government's intervention to reduce or waive customs duty on imports and implement a scientific waste management system.