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Corrugated Packaging Industry facing multiple challenges, seeks support to cope a little better

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The total board making capacity in the country is around 34,000 – 36,000 metric tonnes per month. However, the printing capacity is limited and does not match the same volume

The net profit margin of the industry is an average of 5% and it can vary around 3%-7%. The industry rarely makes 7% margin and that could happen only when paper prices are at rock-bottom

Bannet Gamalath, CEO – UNIDIL Packaging Ltd – the packaging arm of VALLIBEL ONE PLC) – who is also the President of Lanka Corrugated Carton Manufacturer’s Association says that following the recent IPO announcement made by one of the carton manufacturers, people have started talking about the industry in an interested and excited way.

“In this context, as President of the Lanka Corrugated Cartons Manufacturers Association (LCCMA), I’d like to shed some light on the industry.”

“Today, corrugated cartons are recognised among the world’s most widely used materials for packaging. As a material, it also offers almost unlimited possibilities to produce packaging with different properties and shapes.” he says.

“Despite the fact that this industry serves nearly every sector of the economy becoming an integral part of the supply chain, corrugated cartons have not been regarded as an interesting area of discussion.”

“At present, around 30 small to large corrugated cartons manufacturers operate in the island. Out of these firms, seven companies control 80% of the market share while the remainder contribute around 20%. The demand for the corrugated cartons in Sri Lanka is very limited as our economy has not shown steady growth in the past.”

“The current market is around 14,500 MTNS (metric tonnes) per month and the year-on-year growth of the market is less than 2%. Hence, there is a huge competition among the players to capture the existing market. Consequently with the market pressure, the industry maintains minimal prices and eventually the companies just make normal profit. In early 2000s, many companies discontinued their operation due to heavy losses including the then corrugated giants including MSH Packaging and Nisol Corrugated Packaging.”

“The net profit margin of the industry is an average of 5% and it can vary around 3%-7%. The industry very rarely makes 7% margin and that could happen only when the paper prices are at rock-bottom.”

“Apart from imported paper, the members of the Association also source local paper to a certain extent. The paper manufacturing industry in Sri Lanka is at the infant stage and have yet to expand. Hence, the convertors are being forced to rely upon the imported paper mostly.”

“During past few years the board making capacity in Sri Lanka was expanded as some of the companies increased operations through new corrugated plants. Today these plants contribute a monthly capacity of around 4,000 MTNS while the second level entities maintain a capacity around 2,500 MTNS per month. It is estimated that the total board making capacity in the country is around 34,000 – 36,000 MTNS monthly. However, the printing capacity is limited and does not match the same volumes. Howerver, any company can enhance its printing capacity within 5-6 months as good machinery can be sourced from China and Taiwan.”

“Despite the interest in packaging is growing and the realisation that other sectors cannot survive in isolation without packaging, our industry continues to face many challenges.”

“The latest upsurge of the prices began nearly one and half years ago adversely affecting the industry. As a result, paper prices have escalated by around 70% and this ‘alarming’ upward trend is expected to rise over 100% towards the end of this year. Adding to this crisis, is the huge shortage of paper in the international market consequent to the ill-effects of Covid 19 pandemic. Furthermore, in the midst of this shortage, our members continue to struggle to open LCs with the current dollar restrictions imposed by the local banks.”

“While the industry is equipped with adequate infrastructure to support the future growth of Sri Lanka’s economy, it is also imperative that all the stakeholders and authorities contribute towards a sustainable and thriving packaging industry in Sri Lanka,” Bannet Gamalath says.



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Passport Office collaborates with banks to boost international monetary transfers from migrants

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Central Bank Governor, Ajith Nivard Cabraal hands over a new account to a young migrant worker which he opened at the new HNB counter at the Passport Office yesterday, where Jonathan Alles, Managing Director/Chief Executive Officer of HNB was present. Pic by Thushara Athapaththu

by Sanath Nanayakkare

People’s Bank, National Savings Bank , Sampath Bank, Hatton National Bank and Commercial Bank of Sri Lanka yesterday established new banking counters at the Department of Immigration and Emigration, at ‘Suhurupaya’, Battaramulla.

The initiative is intended support the Central Bank’s ongoing effort to boost the country’s foreign reserves by offering migrant workers access for safe, official remittance channels from the time they obtain new passports or renew their passports for international jobs.

Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka who was the chief guest of the opening ceremony said,” A lot of Sri Lankans go overseas for jobs and send their hard-earned money to Sri Lanka. Sometimes they face various issues when remitting money. So we thought we should provide the opportunity for them to open an account as they obtain their passports at the passport office which they can operate with greater ease and trust when sending money to their families from abroad. The Controller of Immigration and Emigration, his staff, the officials at the Central Bank and at other relevant banks worked in unison to establish their counters here just within a week. This shows that government institutions can collaborate with the private sector and quickly accomplish any task for the benefit of the country and its people. Our hard-working migrant workforce will enjoy the convenience and reliability of this service. As a result of it, more foreign money will flow into the country and the nation will reap benefits from it,” he said.

Workers’ remittances have been a key pillar of Sri Lanka’s foreign currency earnings that has nearly 100 per cent of domestic value addition, providing a substantial cushion for external sector resilience of the country. Workers’ remittances have covered around 80 per cent of the annual trade deficit over the past two decades, and strengthening remittances inflows to the country brings several socio-economic benefits including the smooth supply of forex inflows to the formal banking system.

The Central Bank of Sri Lanka established a new department named ‘Foreign Remittances Facilitation Department’ with effect from November 3, 2021 to facilitate and streamline workers’ remittances inflows to the country.

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SLT-MOBITEL powered SLIOT Challenge 2020 and IESL RoboGames 2020 fostering innovation

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SLT-MOBITEL, the National ICT, Telecommunications and Mobile Services Provider was the proud sponsor of SLIoT Challenge 2020 and IESL RoboGames 2020, championing innovation in Internet of Things (IoT) and robotics to reward and further develop a pipeline of tech talent and critical skills among Sri Lanka’s youth. The winners of the competitions were honoured at a special ceremony held recently.

SLIoT Challenge 2020 and IESL RoboGames 2020 was a collaborative effort between SLT-MOBITEL, the Department of Computer Science & Engineering of the University of Moratuwa and the IT and Computer Engineering Sectional Committee of Institution of Engineers of Sri Lanka (IESL). Recognising the value of promoting digital inclusion among youth and to develop new generation technology concepts, SLT-MOBITEL sponsored the event for the fourth consecutive year. Both competitions encourage technological innovation among youth which in turn provides avenues for SLT-MOBITEL to capitalize on its futuristic thinking towards a connected future.

The SLIoT Challenge 2020 theme centred around the current pandemic ‘Overcoming COVID-19 with IoT’ and over 77 submissions were received. SLT-MOBITEL comprehends that IoT is being widely embraced with the number of connected devices growing rapidly. SLT-MOBITEL recognizes that driving an IoT competition for Sri Lankan youth allows students to unleash their potential in the IoT domain and acts as a gateway to support the country’s evolution towards digital transformation.

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Akshata launches unique new tea blends

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Akshata brand, a pioneer in promoting health and wellness the traditional way presents herbal tea alongside honey/jaggery as an alternative to sugar, redefining tea consumption.

Akshata ‘Ranawara’ herbal tea which promotes clear skin and health benefits for the body is dedicated to Queen Soma Devi who was acclaimed for her beauty, bravery, and sacrifice to save King Valagamba in 77 BC.

Managing Director of Grains N Green, Roshan Perera says, “In addition to the myriad of health benefits, consumers are encouraged to experience a taste of nostalgia with each sip of Akshata herbal tea. Today’s health-conscious consumers increasingly buy items that support their nutrition and fitness. Sugar is no longer included in this list due to its negative impact on one’s health. That’s why we have introduced healthy alternatives for sugar. Putting honey or jaggery in tea is a much healthier choice than using sugar as it does not raise blood sugar levels as quickly, and with our product you can get the tea as well as

the sweeteners all in one pack. This saves time, money, and is a healthier alternative to drinking tea with sugar.”

Akshata herbal tea with bees honey/Jaggery is available at Spar and Glomark supermarkets and can also purchase online at askshatastore.com

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