Escalating input costs batter Sri Lankan corrugated carton industry

The corrugated carton manufacturing sector in Sri Lanka is grappling with a financial crisis triggered by soaring input costs, putting the industry's long-term viability at risk. Key prices for paper grades like Kraft Liner, White Liner, Test Liner, and Medium have risen by 30% to 50%. This surge in costs is exacerbated by increased expenses on energy, transport, starch, inks, chemicals, and labor due to global market forces and domestic inflation.

However, paper accounts for a significant portion of total production expenses, so manufacturers have initially maintained prices in the hope that global supply chain disruptions and commodity spikes would be short-lived. Despite implementing cost-cutting measures such as optimizing energy use, improving machine efficiency, and reducing waste, companies cannot indefinitely endure these mounting pressures.

Recognizing the sector's struggles, manufacturers warn that the financial instability could have wider implications for Sri Lanka's economy. Many essential export and domestic industries, including tea, food and beverages, agriculture, apparel, and pharmaceuticals, depend on stable packaging costs. If these cost pressures persist without being addressed, Sri Lanka's exports could lose competitiveness against foreign products with access to lower raw material prices.

In response, the industry is urging for recognition of these challenges and a responsible, transparent adjustment of carton prices to restore financial stability. Industry leaders stress that maintaining a sustainable packaging supply chain necessitates collaborative efforts from paper suppliers, manufacturers, corporate customers, exporters, and national policymakers.