How Corrugated Box Market Is Positioned in India?
India corrugated box market is at its growth stage. Though, the craft paper prices are increasing but the demand for sustainable and safe packaging of goods is also increasing. The sale of corrugated box has increased from INR ~ crore in FY’2012 to INR ~ crore in FY’2018 growing at a CAGR of ~%.
Factors such as increasing demand from fresh food and beverages, home & personal care goods, electronic goods industries, logistics application, increasing consumer awareness towards sustainable packaging and growth of the e-commerce industry have propelled the growth of the Indian Corrugated Boxes Market.
The demon of demonetization, had hit the industry badly, led to fall in demand for corrugated boxes. As a result, of slow movement of FMCG & other consumer goods from the retail counters, led to retrenchment of work force & financial losses for the industry.
Many corrugators have adopted latest technology machines which they have either imported from different countries such as China, Taiwan, Japan, South Korea, America and Germany.
During the year FY’2015-FY’2016, the average raw material price raised by ~% with the price of craft paper which consists ~% of overall raw material raised by 17% to INR ~ per kg from INR ~ per kg. Similarly, price of adhesive (glue) raised from INR ~ per kg to INR ~ per kg. Also, stitching wire became costlier from INR ~ per kg to INR ~ per kg during FY’2015-FY’2016. This price hike led to shut down of many corrugated box manufacturers and also affected the nation as a whole.
The industry in FY’2015-FY’2016, introduced new heavyweight products such as billerud flute semi-chemical fluting. Primarily, targeted at replacing wooden packaging, this product is also able to replace double-walled board with an overall lighter weight single wall substitute.
In order to increase the market growth the Indian Corrugated Case Manufacturers Association (ICCMA) and Automatic Board Plants &Western India Corrugators Box Manufacturers’ Association (WICMA) supported to grant a minimum of 12% price increase on boxes so that the Box industry is able to cover supplies of Craft Paper well in time to avoid any disruptions in the
Which End User is Generating more Demand For Corrugated Boxes In India?
In FY’2018, FMCG segment has dominated the India market. FMCG segment has contributed a share of ~% in terms of sales volume accounting to ~ thousand tons in FY’2018. The FMCG sector has grown from INR ~ crore in FY’2011 to INR ~ crore in FY’2016. The sector is further expected to grow at a Compound Annual Growth Rate (CAGR) of ~% to reach INR ~ crore by FY’2020.FMCG sector mainly uses 3 ply types of boxes as they are cheap and moreover FMCG products are not very heavy.
In FY’2018, automotive end user has the second largest sales volume contribution of ~% in India corrugated box market accounting to ~ thousand tons. Automotive sector mainly uses 5 ply types of boxes.
Textile and electronics & appliances industry contributed a share of ~% and ~% respectively in terms of sales volume accounting to ~ thousand tons and ~ thousand tons respectively. In FY’2018, other end user such as paints, pesticides, distillery products, E-Commerce has least sales volume contribution of ~% in India corrugated box market. Electronics & appliances sector mainly uses 5 ply and 7 ply types of boxes.
Which State is generating Higher Demand for Corrugated Boxes In India?
In FY’2018, Gujarat has dominated the market with domestic revenue contribution of ~% in India corrugated box market accounting to INR ~ crore. Gujarat dominated because of better infrastructure development and road connectivity by the government in the state different types of industries such as FMCG and pharmaceuticals are growing in different regions of Gujarat therefore increasing the demand of corrugated boxes. Morbi, Vapi, Ahmedabad, Gandhinagar and Saurashtra are the major areas in Gujarat which are popular for the procurement of raw material
In FY’2018, Maharashtra has the second largest revenue contribution of ~% accounting to INR ~ crore in India corrugated box market.
Himachal, Tamil Nadu, West Bengal and UP contributed a share of ~%, ~% ~% and ~% respectively in terms of revenue in FY’2018. Other states such as Delhi, Madhya Pradesh, Karnataka, Rajasthan, Punjab, Andhra Pradesh, Haryana and Bihar contributed 20.6% in India corrugated box market accounting to INR 4,854.9 crore in FY’2018.
Which Type of Ply/Box is Majorly Used in India?
In FY’2018, 5 Ply type of box has dominated the market. 5 ply type of box has contributed a share of ~% in terms of sales volume accounting to ~ thousand tons in FY’2018. 5 Ply type of box has dominated the market as these boxes are now manufactured through fully automatic machines which increases the strength of the box and can be used in place of 7 ply and 9 ply type of boxes. These 5 ply boxes are capable of carrying 20 to 45 Kgs. of weigh depending on the size and shape of the 5-ply carton.
In FY’2018, 3 ply box has the second largest sales volume contribution of ~% in India corrugated box market accounting to ~ thousand tons. 3 ply boxes are light weight corrugated paper boxes that are a cost effective way to pack, store and ship the products. Depending on the size of the packing carton, a 3 ply corrugated box can hold 4 to 15 Kgs. Generally, 3 ply box are manufactured using 25 edge crush test (ECT) corrugated material.
In FY’2018, 7 ply and 9 ply boxes contribute a share of ~% and ~% respectively in terms of sales volume in India corrugated box market. Depending on the size of the packing carton, a 7 ply corrugated box can hold 40 to 100+ kgs.
How UN-Organized and Organized Players Performing IN India corrugated box Market?
In FY’2018, unorganized players contribute a market share of ~% in India corrugated box market. Organized players use different types of automatic as well as semi-automatic machines such as automatic high speed strapping machine, automatic 4 color Flexo Printer, automatic 3 color Flexo Printer Slotter Rotary Die Cut, semi automatic stitching machines and others. Organized players are Worth Peripherals, TGI Packaging Pvt. Ltd., Horizon Packs Pvt. Ltd., Jayaraj Fortune Packaging Pvt. Ltd., OJI India Packaging Pvt. Ltd., Supack Industries Pvt. Ltd. End users for organized players are Processed Food, Electronic Goods, Textiles, Consumer Durables, E-Commerce and others
In FY’2018, unorganized players contribute a market share of ~% in India corrugated box market. Unorganized players use semi automatic machines and they are more focused on manual production and rely on labor work. Un-organized players are Allwyn Paper Box, Durable Corrugating, Packman, Shanti, Parth Packaging, A to Z Janta Packaging Spruce Impex Pvt. Ltd.
What is COmpetitive Scenario in India Corrugated Box Market?
India corrugated box market is highly fragmented with the presence of around 18,000 organized and un-organized players. There are no regulations in the market regarding the entry of the players and since it is a low capital intensive business (~ lakhs) so a lot of new players are entering in the market.
The leading company in India corrugated box market is Horizon Packs Pvt. Ltd. Other leading companies are Worth Peripherals Ltd., TGI Packaging Pvt. Ltd., OJI India Packaging Pvt. Ltd., Jayaraj Fortune Packaging Pvt. Ltd., Supack Industries Pvt. Ltd., BL Containers Pvt. Ltd., Chaitanya Packaging Pvt. Ltd., CEL Packaging, Wadpack Pvt. Ltd., Hariwansh Packaging Pvt. Ltd., CJ Corporation and Paper Containers India Pvt. Ltd.
In 2017, Horizon Packs Pvt. Ltd. imported different latest technology machines such as conveyor board handling systems to enable efficient handling, auto folder gluers for perfect flap pasting and auto box strapping with roller conveyors to facilitate.
Corrugated box manufacturers compete with each other on the basis of different parameters such as product offered, manufacturing facilities, production capacity, main end users, clients, raw material used, types of machines & their procurement.
Future competitive edge in the market will be based on the growth of the end users segment. The use of strong corrugated boxes as a substitute of wooden packs that brings about significant weight reduction, improves logistics & handling as well as providing cushioning for sensitive heavy products drive India corrugated box market.
How is the Future Outlook for Corrugated Box Market in India?
India corrugated industry is expected to increase at a CAGR of ~% in between the FY’2019 and FY’2023 in terms of revenue due to the elevating demand from the end user segment in order to store and transport their end products. Increasing the demand of safe and cushioned packaging of the product will augment the growth of India Corrugated box market.
The growth in the use of the internet for shopping, stimulated by the growing use of smart phones as well as the increasing proportion of tech-savvy consumers, has a very positive effect on corrugated demand.
Retail ready packaging is also increasing driven by the influence of supermarkets over the retail landscape and supported by their growing share of the retail market will also drive the corrugated box market in future.
The procurement of latest technology machines from China, Taiwan and other Asian countries by manufacturers in order to make production fast and accurate will also drive the future of India corrugated box industry. The emergence of E-commerce industry in India the demand of corrugated boxes will also increase.
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Ankur Gupta, Head Marketing & Communications