Manufacturers of food, beverages, paints, room fresheners and pharmaceuticals are facing severe scarcity of tin cans and peel-off packaging that is compelling them to delay or cut production.
The packaging shortage is hitting chocolate and juice companies that are looking to incline production in expectation of higher demand during the forthcoming festive season.
This follows a Bureau of India Standards (BIS) order effective last month. It orders use of BIS-certified and tin-free steel for cans, easy-open ends and peel-off ends for packaging. The certification requirement has created a shortage of raw material.
The industry had been importing 90% of these materials since local production isn’t sufficient. And according to RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation Ltd, maker of Amul chocolates said,” there is a holdup effect in implementing the BIS certification by importers because of Covid-related supply constraints in recent months, and this is causing disruptions. India’s largest dairy brand sells some of its cheese, flavoured milk and infant foods in tin based cans and containers.
The government had mandated BIS certification in July last year and given the industry until January 2021 to comply, extending this by six months. Also the international suppliers have been unable to get BIS certification because of Covid-related disruptions. Production Hampered, Or Even Stalled Demand for tinplate and tin-free steel from the domestic industry is about 700,000 tons annually.
Only two domestic companies manufacture the material. This is a problem waiting to accentuate further. Supply chain disruptions are brewing and will be further accelerated, especially for those with limited raw material bandwidth,” said FieldFresh Foods, which makes Del Monte juices and condiments. Most Del Monte juices are packaged in cans.
Production is being hampered, or even stalled in some cases, with acute shortage for such tin-based packs for various categories, including juices, cheeses, paints and even some medicines that use tin peel-off,” said Metal Container Manufacturers Association (MCMA), which represents manufacturers of such packaging.
The BIS requirement is aimed at encouraging greater domestic production and reducing imports. Further Extension Denied “While we are supportive of the government’s inclination to rely more on Indian manufacturers and minimize imports, some more time would be beneficial for the industry to comply with the updated certifications,” Sodhi said.
The industry had asked that the steel and steel products quality control order be pushed back until March next year, but the government rejected this. Industry executives said obtaining BIS certification involves complex procedures and international suppliers will not be able to get quickly approved. Tinplate steel, or a sheet of steel coated with tin, is used for packaging