With increased competition in virtually every market area, as well as pricing pressures affecting everything from raw materials to logistics, businesses must search for methods to cut costs in order to remain competitive. This is also true of packaging.
The packaging industry faces a tough time due to rising raw material prices. According to entrepreneurs in the industry, while the prices of essential raw materials like paper and aluminium foil have increased by 70% during the pandemic, carriage charges to foreign countries have also increased fivefold.
With the recent crisis, demand for the manufacturing sector has dropped dramatically across the world, and packaging materials are no exception. Because industry analysts predicted that the recovery would be gradual and sluggish, numerous packaging industry companies announced a scheduled shutdown in 2020 due to poor production.
However, as economies begin to recover, the market is experiencing an unprecedented spike in demand. And the unexpected increase in demand has created a massive mismatch in the demand and supply environment. Because of this demand-supply imbalance, the price of raw materials has grown multiple times. Aside from that, the problem is being exacerbated by the current worldwide container shortage, which has resulted in a dramatic increase in transportation costs, further limiting supply.
This complicated combination of increased demand, capacity, and supply difficulties, along with the limited availability of transport options, is increasing market uncertainty and driving up feedstock costs exponentially with each passing day.
• Raw Material Price Increase UV resins, polyurethane resins, solvents, glycols, acrylic resins, and other petrochemical raw materials and derivatives have recently seen major price increases.
The price of epoxy resin, like that of petrochemical goods, has grown drastically, and the price of pigment basic components, such as titanium dioxide, has risen geometrically over the world (TiO2).The polyester resins business is facing similar troubles, with facility closures in Singapore and Sweden, as well as an explosion at a factory in China, worsening the situation. As a result, suppliers divert commodities to their own markets, driving up costs even higher.
The raw materials issue is nearing a tipping point, and the situation is getting worse by the day.
All of these variables have had a substantial influence on the cost of printing inks, coatings, and laminating adhesives, which are used in a wide range of packaging and printing applications. Freight rate fluctuations have made the situation even more difficult for the packaging industry. Ocean freight charges change on a regular basis, and this is not unusual. Carriers in India’s two main ports have set a new universal pricing. This increase is being attributed to a shortage of equipment and a decrease in vessel capacity in and around the Indian subcontinent. As a result, maritime freight charges began to increase beginning in January 2021.
Looking outside India, Indian ports aren’t the only ones where ocean freight rates have skyrocketed. Containers bound for various parts of the world have seen an increase in freight from the United Arab Emirates (UAE) and China’s ports of Qingdao, Shanghai, and Nansha.
Shipping a product from one location to another can be one of the most expensive parts of the supply chain. This is because shipping packaging can have various hidden expenses that are unrelated to the material cost of the package itself.
Furthermore, wastepaper prices have risen to Rs. 22–24 per kg, up from Rs. 10–13 per kg in pre-COVID days.
According to a press release from the Indian Corrugated Case Manufacturers’ Association (ICCMA), the entire cost increase for box makers has reached nearly 70% due to paper alone. The packaging industry is bleeding profusely as the price of its major raw material, Kraft Paper, rises unpredictably. According to Kraft Paper Mills, the lesser availability is due to the increased cost of imported and domestic waste paper on the supply side following the lockdown as well as substantial international logistical issues.
Meanwhile, there is a severe scarcity of waste paper that has been purposefully produced by those with vested interests. Recycled fiber (waste paper) based paper mills, which account for more than 75% of India’s paper and paperboard output, have caused raw material costs to treble in recent months.
Paper mills have little choice but to restrict paper output depending on raw material availability and stock levels because a few waste paper providers completely command and control the price and availability of waste paper.
In these situations, the government and authorities must intervene to stop illegal hoarding. Otherwise, things will worsen and have a big impact on the sector. This will impede the economy’s already sluggish growth, which has decreased since the Covid outbreak.
Cost-Saving Strategies Metal Packaging: Metal-based packaging materials have good barrier qualities and are hence commonly employed in food packaging applications. They are used in a variety of packaging formats, as well as closures for glass bottles and composite cans. Migration of bisphenol A, lead, cadmium, mercury, aluminium, iron, nickel, can bulging, tin dissolving, blackening, and corrosion are major health and product safety hazards with metal packing. Metals are not inert to food items, hence they are coated with protective lacquers to avoid metal–food contact and metal component migration.
Because of their magnetic qualities, metal packaging materials offer a reduced global warming potential and better recyclability. For food packaging applications, various metals such as aluminium, tin plate, tin-free steel, and stainless steel, as well as metal-based packaging materials in both rigid and semi-rigid forms such as cans, foil wraps, and retort pouches, are most typically utilised.
Paper packaging:It degrades faster than other materials. Paper biodegrades more quickly than other types of packaging, particularly plastic. This implies that when exposed to bacteria, yeast, and other organisms in natural conditions, paper packaging degrades quickly.
It is simple to recycle. Paper is one of the world’s most recyclable materials. In fact, paper and paperboard accounted for over 67 percent of total municipal solid waste (MSW) recycled in the United States in 2018-the greatest percentage of any other material.
It’s reusable. Paper isn’t just more recyclable than other materials—it’s also easier to reuse with little environmental impact. That’s because it can be re-pulped without the use of chemicals. The life cycle of paper is long, too—recycled paper fibres can be reused up to five to seven times to make new products.
You can print directly on paper. Paper is advantageous for brand visibility because you can easily print your logo or other designs right on the material.
It’s versatile. Paper can easily be combined with other materials to achieve unique aesthetics, which can influence purchasing decisions.
Plastic Packaging
The durability and sealability of plastic packaging protects goods from deterioration and increases shelf life. With modified atmosphere packaging made from plastics, shelf life can be increased from 5 to 10 days, allowing food loss in stores to be reduced from 16% to 4%. It also aids in reducing food wastage.
With all of the pros and cons of various methods of packing and taking into account the Covid-times, MNT has attempted to bring together the perspectives of numerous packers and weave them into an article-cum-story for its readers to read. The citation presents their point of view on the current status of the price and its effect on the packaging industry.
The Rising Price of Packaging On enquiring upon the above issue, Ajay Gupta, MD, Asia Pulp & Papers Pvt Ltd, Bengaluru, replied, “Prices have definitely soared, posing a number of hurdles for enterprises.” Packaging substrates have seen a large price increase, as has happened with most commodities. Increased raw material costs, increased electricity expenses, and high logistical costs are the major reasons behind this.
For two years, the pandemic has resulted in a major global shipping space imbalance. The following are the main reasons for this discrepancy:1. Reduction in overall shipping capacity in 2020 due to uncertain times globally.2. Reduction in orders for new ships in 2020.3. Lockdown induced delays and ships / containers getting stuck at many ports4. Shortage of shipping crew5. Significant import policy changes by some large importing countries result in trade imbalances.
Shipping costs have risen by 100 percent to 300 percent, depending on the industry. Shipping transit times have nearly tripled since the introduction of Covid. It will take some time for the shipping sector to regain some equilibrium. Until then, every industry will have to pay the added cost and delay.
This has caused a lot of supply disruptions and substantially increased the cost of all materials. All businesses are facing multiple challenges such as: supply challenges; reduction in margins as they are unable to pass on full cost increases to customers; working capital challenges; loss of business due to non-availability of input materials; higher inventory holding to cover shipping delays, added Ajay Gupta.
With confident steps, MNT moved forward and approached Puneet Duggal, MD, KAP Group, New Delhi, for his valuable input regarding the reasons for increased packaging prices.
Puneet Duggal shared his frank and detailed views, “Since 2020, the world has experienced an unprecedented crisis because of COVID. However, supply and demand started to stabilize towards the end of 2021 as lockdown restrictions were lifted. The market is faced with new sets of challenges that have spiked the input costs of the raw materials and overheads, particularly in the energy-intensive industries such as paper and plastics”.
Considering the ongoing war, Duggal further added, “The volatility of most resins has been exacerbated by a rise in crude oil prices, as well as the current uncertainty surrounding the sanctions imposed on Russia as a result of the Ukraine conflict.”
The other factors that pose huge challenges are: shortages in the paper supply; exceptional demand (stock-piling); increased labour costs; shortage of skilled and experienced labour; cost of transit and logistics; other overheads etc.
“Businesses have to continually innovate with new products and technology while ensuring that the significant price increase is not a bottleneck across the complete value chain, including the end-use customer.”
“When there is an imbalance in the demand and supply of raw materials, and especially when there is a monopoly or duopoly market, no strategy avails.” The shortage in the supply increases the final price of the products, and the suppliers demand payment for the raw materials at unreasonable prices,” stated Puneet Duggal.
Ankit Pasurampuria, Founder & CEO, Bags Guru & Director of Popular Industries, Surat, hasshed light on this grim situation. Ankit has been involved in the non-woven bag business for 12 years.
Ankit stressed that the COVID nemesis will be with us for a while longer. The packaging business is going through one of its darkest eras, with little government or industry involvement to stop the ever-increasing raw material prices.
According to Ankit, the Indian mithai and namkeen sector is a large user of plastic and paper packaging. There are a variety of factors that have contributed to the increase in raw material prices:
Increase in global crude oil prices: Crude oil prices have risen by more than 50% since January 2020, immediately affecting the plastics sector, as all plastics are petrochemical products.
During the lockout, the dormant crude oil market experienced an unexpected spike in demand, which peaked just after the lockdown ended. However, the globe had not fully recovered from the pandemic, and not all businesses were operating at full capacity, resulting in a demand-supply mismatch and, as a result, a spike in prices.
Sea freight rates began to climb as well. China was the first country to recover from the epidemic, and it quickly established itself as a worldwide supplier to the United States and Europe. This one-sided demand resulted in shipping containers being stacked at ports on the other side of the globe, far away from China.
As if these two things weren’t bad enough, Russia invaded Ukraine in February 2022, adding to the industry’s troubles. Russia produces around 12% of the world’s crude oil. Large oil companies such as British Petroleum Company (UK), ExxonMobil (USA), Shell (UK), and Equinor (Norway) have begun to withdraw their investments in Russia as a result of Russia’s pro-war activities. The supply side is still battling to restore normalcy as demand continues to climb.
“The packaging industry operates on minuscule margins. Our B2B customers don’t allow us to transfer even 50% of the burden of the raw material price increment to them. 2022 is a year of survival. “Industries working sustainably are in a winning position today,” opined Ankit.
Mirek Thermoformers Pvt Ltd, led by Manohar Bhatia, has offices in Bhiwandi and Haridwar. The cause of the price hike, according to Bhatia, is market price rises in pulp, chemicals, coal, and shipping freight, among other things. These price increases in raw materials have a global footprint and have impacted every paper supplier across the globe.
Reasons stand: 1. Global inflation, which has impacted various industries, 2. Political unrest around the globe 3. Increase in prices of raw materials 4. Stock piling vs. increase in demand 5. Increase in labour costs and minimum wages, coupled with a shortage of labour due to the pandemic6. Increase in fuel prices, resulting in the rising cost of logistics7. Increase in various overheads, out-sourcing, and rupee depreciationThe following points are jotted by Bhatia as the second reply to the query of the challenges encountered by businesses due to rising prices:1. Drop in manufacturing efficiency due to erratic nature of business sudden demands and then a drop in orders.2. Difficulties in investing in new technology3. Reduced margins lead to unethical and unfair business practices.4. Manufacturers bear the brunt of price increases because consumers or clients are unwilling to pay justified cost increases.5. compromising on quality and opting for inferior products to save money.
From Southern India, we received a well-versed reply from Praveen Kommareddy, MD, Hyper Pack Pvt. Ltd., Hyderabad.
The cost of raw materials needed in the creation of corrugated cardboard (i.e., paper) is at an all-time high, said Praveen. There are several variables contributing to this, including: first, with regional and national lockdowns, the need for social distancing (and its effects on productivity), and increased staff absenteeism owing to Corona, there is simply less paper available, pushing up expenses.
• At the start of the pandemic, planned maintenance and increasing paper exports created market imbalances that are just now being resolved.• The price of paper—the material that makes up cardboard—has been rising, with the knock-on effect being more expensive packaging.• All of these factors have been reflected in the price of cardboard (across all types and grades of board), which in turn filters into the cost of packaging.• It may be possible to analyse the material for packaging purposes and change this to a lighter, cheaper board grade, thus mitigating any cost increases due to material.• With new paper manufacturing capacity coming on board imminently and restrictions easing, many are predicting that corrugated prices could begin to fall or at least stabilize.
Increased demand for corrugated packaging is driven by e-commerce.
Another factor that has led to the increased cost of corrugated packaging is the surge in demand caused by the pandemic. With consumers stuck at home, the switch to online shopping accelerated rapidly. The consequences of this were seen virtually by all businesses selling online having an increased need for corrugated e-commerce packaging to ship orders.
Combined with the difficulties experienced by paper manufacturers, the simple economics of supply and demand led to unavoidable increases in both the raw materials and the finished packaging itself.
This situation was also further exacerbated by many businesses stockpiling supplies.
Increased labour costs, shortages, and the minimum wagePerhaps one of the more overlooked reasons for the increases being seen in packaging prices is that of labour costs. April 2021 saw a further increase in the national living wage and national minimum wage, adding to businesses’ costs throughout the packaging supply chain.
“With fewer people preferring to work due to labour migration, many manufacturers face competition for suitably trained/skilled staff. This has further pushed up costs, which can eventually be passed on to customers”, awed Praveen.
Praveen went on to discuss how the cost of transportation and logistics is increasing. Fuel prices have been steadily rising and are already at their highest since January 2020. Because of the growing workload for third-party delivery companies and couriers (due to the increase in e-commerce fulfilment), transportation prices are continuing to climb rapidly. Despite the fact that this isn’t directly related to packing costs, it almost certainly has an effect.
Many packaging companies are finding that they are unable to run their plants efficiently owing to increased demand and inconsistent material supplies. Many are balancing consumer demands as well, affecting how projects are prioritised rather than performing things in the most efficient way possible, cited Praveen.
Trimurti’s go-green campaign provides sustainable packaging solutions made of recyclable, biodegradable, and compostable materials.
“The input cost of polymers led to a rise in the cost of packaging for clients,” says Punit Chandan, MD of Trimurti Polymers. The rise in the past quarter was mostly attributable to an increase in freight costs on imports owing to Covid and the availability of RM feedstock in foreign markets.
Representing his company AJ Packaging based in Ghaziabad, Ajay Agarwal desolately replied that it is primarily the global pandemic caused by the coronavirus, and its consequent allout, that has led to the steep rise in packaging prices since 2021. Labour shortage, container vessel stagnation at ports, disrupted supply lines, and shortages in raw material supplies have all forced businesses to restructure their pricing in order to deal with the crisis. As per recent reports, the situation is set to continue for another 12 months at least, due to the parallel rise in global energy costs and the consequences of the Russia-Ukraine conflict.
It has, of course, affected the entire value chain. For example, in the food industry, raw material manufacturers, fillers, and fabricators are all, unfortunately, forced to pass on the price hike to end consumers.
Subha Rao, MD, ECO Coating Pvt. Ltd, Chennai, discoursed his views. According to him, the reasons are several factors which has resulted in the Skyrocketing of Paper & Paper board packing material.
“The European union and America have stopped export of waste paper a couple of years back as they have started to recycle the waste paper due to shortage of wood and other raw material for Paper making. This resulted in shortage of quality raw material for medium and small scale Paper mills in India who rely on imported waste paper along with indigenous waste too.
As a result of shortage and raw materials are procured by Paper mills on premium and cash basis. This has pushed up the prices of different grade of Paper and shortage too. There has always been shortage of wood pulp globally which is essential in making high strength paper packaging board”, Rao quoted.
The Food Industry’s Reaction to Price Increases Moving ahead with the next sub-topic of the impact of the rising price of food on the food industry, here is what our stalwarts have to say:
Ajay Gupta purportedly stated that the cost increase is so substantial that no one in the supply chain is able to pass on the entire cost increase to their customer. What is happening is:1. Passing on part of the increased price to the customer2. Reduction in margin3. SHRINKFLATIONWith a combination of all of the above, each member in the supply chain is trying hard to survive these difficult times and hoping things will turn around sooner than later, voiced Ajay.When we asked Puneet Duggal about the same question, his response was pretty logical.
“There are different ways in which the food industry is progressing to tackle the increase in prices.” The industries are resorting to smaller packs that do not hurt the consumer’s pockets. For example, in our packaging, we have seen unprecedented growth in the small value-packed boxes like 250g boxes, vis-à-vis the bulk packs.
“The food industry is also looking at products or packaging solutions that involve minimal labour and operation costs.” Our packaging eliminates all the costs associated with any sleeving, shrink wrapping, and eventually eliminates any additional labour costs.
The food industry is heavily promoting online sales and marketing of their products, which lowers their operational costs. The reusable packaging containers create more value and brand recall in the minds of consumers.
Positive about the outcome of 2021. Ankit said, “Luckily, the Indian food industry has come to the rescue for us companies. We have been seeing good growth in demand from the mithai and namkeen industries in India. Diwali 2021 sales were 3 times more than average sales throughout the year.
Although the food industry has also been hit hard with its own burden of raw material price increments, food products, being a staple commodity, continue to be in demand, “said Ankit.
Manohar Bhatia, lining up with the appropriate answers, streamed his reply:1. Improvements to the total supply chain are expected to boost efficiency and, as a result, lessen the impact of increased costs to some extent by improving the quality of their packaging and, as a result, reducing transit damage, giving longer shelf life, and higher consumer value.2. The most efficient use of resources and space.3. Collaborating with government officials to improve policy.4. Collaborate closely with suppliers to reduce costs and, as a result, prevent losses.5. Re-work the size of their package.
“Consumer prices of packaged foods will continue to rise despite recent government measures to contain food inflation because of sustained increases in packaging costs and insufficient cost benefits on oil and industry fuel,” Pravin says in response to the price hike and its impact on the food industry.
Consumers are the ones that suffer the most. Consumers are finding it tough to buy even basic necessities due to the rising cost of everyday items. As a result, they have little choice but to seek more pay. As a result, the government makes an effort to keep inflation under control.
Industrial fuel, diesel, laminates, cartons, and corrugated boxes have all increased in price in the last six months. Large cost components such as oil and packaging have not been granted any significant cost advantages to the sector. As a result, businesses in the food industry must continue to either raise prices or lower grammage, professed Praveen.
Punit Chandan explains from a different perspective, stating that cost increases are always a concern for every company, but customers appreciate high-quality products. While commodity items saw a drop in sales, some of our premium lines grew in popularity, and customers were delighted to accept the price rise and profit from increased sales that transformed their top lines with 3X sales.
Stating the facts of present scene, Ajay said that major brand owners and fillers, especially in the domestic market, are reportedly either hiking prices or resorting to grammage reduction. It is happening in almost every product segment, and in the end, it is the end-consumer who is feeling the heat.
Rao conversed that the prices of paper is generally determined by the availability of the raw material and supply demand and seasonal too.
“This cycle of increase in prices are generally for a short period in paper industry. With steep increase the end users of food packaging switch to alternate packaging. However due to the global ban on single use plastic food packs is coming into effect from 1st July is another factor for shortage and as a result steep increase in Price hike”.
“This paper shortage has been for the last over 4 years. The Chinese government had ordered closure of several paper mills in Central China all surrounding major lake.
“As a result, India once a paper importing country on the contrary started to export paper to China where there was a better realisation and no credit sales and assured payments by LC terms.The long term recurring order volumes are very much higher which also resulted in mills switching to exports and as a result shortage in India’, enunciated Rao.
Implementation to monitor product pricingWhen asked about maintaining a careful eye on product pricing, Ajay relates, “Without getting a lock on input costs, it is impossible to provide stable product pricing.” In the current circumstances, some of us are attempting to purchase extra raw materials and develop stocks. We’re also ordering from more vendors to ensure that we have a wide range of supply alternatives. While we risk losing if prices begin to fall-we are left with no choice!!
This is difficult due to supply issues and working capital restrictions. Stronger firms, on the other hand, are attempting to do so in order to guarantee some pricing consistency to their customers.
With all of our efforts, we are able to maintain pricing stability for a decent period of time.
With some technical points in thoughts about price checking, Puneet Duggal imparts his personal views. “
We communicate with our clients on a regular basis to ensure that they understand the minimum order production run to ensure minimal wastage and order the appropriate order quantity to achieve the lowest transportation cost per unit of the SKU.
We use lean manufacturing concepts, and all production processes have owners who are responsible for maintaining, improving, and tracking the activities that they own. We are also focusing our efforts on effective quality control, standardization, and GMP (Good Manufacturing Practices).
According to Ankit, “There are particularly 2 months in the year when demand suddenly drops and raw material prices fall—November and June.” We have strategized to dump raw materials at rock bottom prices during these months, which helps us curb product price increments in the shoulder months”.
“Secondly, we continue to reduce labour-oriented work in our manufacturing processes and bring in 100% automatic machines to make carry bags. This in turn helps lower the costs. “
Manohar Bhatia cites his initiatives for maintaining the product’s pricing as follows:1. Improvement in the entire manufacturing and production process, resulting in increased efficiency and lower overheads.2. Collaborating with suppliers and clients to achieve a balanced and seamless flow of supply and demand.3. Reducing extra labour to improve efficiency.4. Marketing-based incentive-based sales technique
Praveen has attempted to clarify the concept of keeping a steady product price in reference to a manufacturing firm, and this is what he means:1. The company assigns, goals, and empowers the marketing team to create a price improvement strategy and methodology.2. The company split its clients to determine which customers were actually price sensitive and which would satisfy their demands without affecting the cost of its whole product range.3. The company performs an annual evaluation of its performance, rivals, selling terms, and price structure.4. The company’s marketing staff is rewarded based on the growth of either the average selling price or the gross margin.5. The company determines prices by analysing the demands of its customers.6. The company sets an annual pricing improvement objective and monitors it on a monthly basis.
While Punit Chandan says that they are striving hard to keep the product pricing stable. “We have managed to support our customers with quarterly pricing against their projected quantities.”
“As India’s largest tin can manufacturers, catering largely to the food industry worldwide, we at AJ Packaging Limited too have been experiencing the ripple effects of the factors causing the price hike and are bracing to respond to the situation in a constructive manner”, spoke Ajay.
“We believe the solution lies in value engineering, which would lower the burden on end users. We have innovated ways to down-gauge the base steel material to reduce costs to the consumer.
“In fact, we are the first in India to implement the manufacturing of the lightest tin cans both for the food and paint industries without any compromise whatsoever in can strength or product integrity”.
Rao admitted that the price factor to stabilize is not possible in the current scenario.
All inputs of raw material prices are changing from day to day and as a result the Paper mills (For that matter all products prices are increasing by the day in all sectors globally) are unable to control or regulate prices.Certain large paper mills accept orders and their terms of pricing is advance payment and the final price will be as on date of despatched. This new trend by paper mills makes the paper converters totally confused and as a result the end users end up paying a higher price than the ordered prices of packaging materials.There is no way any organisation can control prices or keep them under check. It’s a chain reaction. This has become a trend. SURGE PRICING.
MNT shot its last query, which indeed was a critical one.
Adjusting to the grammage of packaging material
“This is a very sensitive issue,” uttered Ajay Gupta. “The fundamental goal of packaging is to safeguard the contents of the package.” If we look around us, many products have just enough packaging to manage the supply chain challenges. There isn’t much space for value engineering in this situation. However, we do come across certain items that are severely overpacked. In this situation, it could be good to go back to the drawing board and consider the following options:1. Look for alternative substrates2. Reduce the number of processes involved in manufacturing the package.3. Eliminate overpacking.4. Understanding end-to-end handling and usage conditions of a product and redesign5. Packaging accordingly.6. Design more user-friendly packaging7. Work on returnable and reusable packaging wherever possible.8. Work on lowering overall costs. For example, if a product is air freighted, even though the packing costs are expensive, work on packaging that reduces the weight to save on air freight costs, lowering the total cost.
A combination of some of the above options can bring more value and also help us upgrade our packaging.
The materials that are utilized for the packaging of items should be of the highest quality and should have enough strength to guarantee that the packaging of the items will stay flawless. When products are being manufactured in an organization, the manufacturers are worried about the quality. For that, there are various types of value tests that are performed on the items to guarantee durability. As the GSM has a direct impact on the strength and agility of paper, manufacturers ensure that the right GSM is incorporated for its intended use. This allows manufacturers to optimize the process. Similarly, plastic manufacturers ensure that the right microns are maintained depending on the thick-walled or thin-walled PP containers, intended use, and prevailing regulatory guidelines, articulated Puneet Duggal.
Mentioning the grammage of GSM of packaging, Ankit mentioned that on August 12, 2021, the Ministry of Environment, Forest & Climate Change issued a notification (CG-DL-E-12082021-228947) which mentions that starting July 1, 2022, single-use plastic items will be banned from being used. Non-woven bags (>= 60 GSM) and plastic bags (>= 75 micron and >= 120 micron after 31 Dec 2022) are allowed to be used. Due to the heavy quality of the mentioned range of grammages, these bags fall into the re-usable category and can be used by retailers.
The consumer industry is aware of these rules as we keep educating our customers and guiding them to use the right products. The industry has actively adapted to the notification rules, concluded Ankit.
“This is a positive step for manufacturers supplying packaging for sensitive items, because they are already employing a larger gauge to produce their packaging,” Manohar Bhatia said.
He went on to say that the greater expenses associated with increased grammage are absorbed by everyone involved in the product cycle, from the manufacturer to the end customer. As a result, novel packaging is being developed in order to justify price increases and provide additional value to customers.
Addressing with total technicality, Praveen replied, “GSM is possibly one of the most significant properties for many materials, such as paper, packing sheets, and others.” When it comes to the quality of the material being examined, the packaging is the most important factor to consider. When things are made in a company, the manufacturers are concerned about the quality. To that end, numerous sorts of value testing are done on the products to ensure durability.
To ensure that the things are delivered without flaws, it is critical that the production of the items be carefully chosen. The materials used to package products should be of the highest quality and have sufficient strength to ensure that the packaging remains faultless. Paper, cardboard, ridged boxes, and textures are among the most common packaging materials used in enterprises. The packing materials may ensure that the item is delivered to clients in the safest possible manner and that the things’ safety is not jeopardised. It’s also found in paper and packaging testing equipment.
The GSM of a material may be used to calculate its strength. The GSM is the weight proportion of a substance per square metre of that material’s surface area. This number is commonly used in a variety of businesses to determine the true qualities of a material, such as strength and development. GSM is different for different materials, and GSM has a different meaning for different materials.
Customers may also choose a higher gsm for packing their items. As a result, the grammage of GSM is adjusted based on the type of items to be packed, the customer’s preference, and the safety of delivery.
Speaking on GSM and grammage, Punit Chandan said that their process does not allow them to adjust the GSM of the product.
Ajay gave his frank opinion, “We have to acknowledge the fact that industries have been majorly hit due to recent global factors. Every business is dealing with the crisis in their own unique way—either by way of hiking prices to consumers or reducing packaging weight, wherein maintaining packaging and product safety could pose a major challenge.
“We, at AJ Packaging Limited, are fortunately engaged with metal packaging solutions using tinplate, which is inherently food friendly and allows for immense possibilities in shapes, stability, strength, and designs. and at the same time, it is safe and 100% eco-friendly”, cited Ajay.
He further added, “Backed by our 30 years of experience in the field and equipped with experienced know-how and skill, we are investing in the best-in-class technology and processes to optimise the use of the base material while giving them the strength to withstand the variables in temperature, the rigours of transit and match up to high speed auto-filling lines”.
“Today, we are privileged to be working with some of the most renowned global brands, providing them with cost-effective solutions that are unique to their product category. This light-weighting is not only allowing us to cope with the price hike, helping us cater to our customers at the right price but also making our cans far eco-friendlier, and establishing metal cans as the sustainable packaging of the future”, calculated Ajay.
Rao communicated that the general trend in large corporates and medium sectors are that they have fixed GSM of paper & paper board depending on various factors like weight, type and shape of packaging there again depending on display and stacking.
There is no role for the converters and the GSM and other parameters are decided by the buyer and their designing team. Any change or reductions in GSM or quality of base paper can change the basic structure which can cause serious damage to the contents packed.
The paper industry can come in support of the sweets and namkeen manufacturers and the general market by reconsidering their price increase and their terms. This measure by paper mills will take the packaging industry way forward in times of crises.
The end wordMany manufacturers have been squeezed by stubborn price increases, supply chain issues, and labour prices and shortages, which have been aggressively nibbling at their margins. For many, this may mark the start of a time of rising pass-through expenses that will result in higher product pricing and service fees.
When the price of a product rises, families normally desire less of it—however, whether they demand a substantially smaller quantity or merely a slightly smaller quantity depends on personal preferences. In addition, a higher price for one commodity might lead to increased or decreased demand for the other.