Tin plate supply to create metal packaging obstacle

By 16 Jan 2021

The Rs 10,000 crore metal packaging industry in India has encountered a roadblock. According to a press release issued by The Metal Containers Manufacturers Association of India, global players and suppliers of tinplate / tin free steel have ceased their supply to India due to the imposition of BIS standards.

Sanjay Bhatia, president of the Metal Container Manufacturers Association

WhatPackaging? readers will recall how in order to ensure use of prime tinplate for food products, the MCMA had recommended to the Steel Ministry to consider ISO along with BIS standards for sourcing raw material. Read the full story here.

Now, as per the MCMA official statement, "MSMEs engaged  in the business of metal cans, containers and components  have stated there is going to be  an  acute shortage of raw material as the global players have refused to accept their orders to providea tinplate/tin  free steel. (Meanwhile) the domestic market is not so equipped to fulfill the demand."  The industry's tinplate/ tin free steel demand is 700,000 tonnes per annum.

The metal packaging industry is largely dependent upon the import of tinplate/ tin free steel - and is under tremendous pressure since there is a shortage of raw material and the prices have escalated more than 15% recently.

On 17 July 2020, the Ministry of Steel, the government of India issued an order called: the steel and steel products quality control order (QCO). This QCO imposed mandatory BIS Certification on the major input required by the industry like tinplate/tin-free steel. Furthermore, it imposed restrictions on steel products like easy-open ends, peel off ends, which the industry is importing from various countries. Sanjay Bhatia, the president of the MCMA and the director of Hindustan Tin Works, said, "The QCO has been notified at a time when the entire industry is struggling hard to reset their business during these Covid-19 times.  Also, it is virtually impossible to force the international suppliers to go for BIS certifications as the procedure of BIS registration is highly cumbersome."

As per an official statement issued by the MCMA, "The ₹10,000-crore metal container packaging industry is in a crisis due to the shortage of raw material used for packaging food and other items that have resulted in an increase in prices of packaging items." The tin containers and closures are used for packing of edible and non-edible products. And the tin-free steel is mainly required to manufacture crowns, closures and components used to seal bottles for soft drinks, beer, juices and flavoured milk.

The MCMA  has also requested the ministry of steel to allow use of ISO certification materials in addition to BIS certified material. MCMA requested the Ministry to allow the use of materials which are aligned to ISO. The same has been included in the FSSAI order and also recommended by the Ministry of Micro, Small and Medium Enterprises ( MSME).

Bhatia said, "Today, the industry requires seven-lakh tonnes of raw material, about 4.5-lakh tonnes is produced by the Tinplate Company and JSW Steel, while the rest is imported. Since the order directly impacts imports, there is a raw material shortage and this has resulted in upward price revisions."

Bhatia added that the steel and steel products quality control order dated July 17, 2020, which directs usage of BIS certified raw materials, has had a huge impact on the country’s metal container packaging industry. "This has resulted in a shortage of raw material as imported inputs do not have BIS certification."

“Following representations by the MCMA, the government which had ordered that this will come into implementation from 17 January, had postponed it till 17 April 2020. However, the industry needs some more time, Bhatia said.

MCMA members teeters on edge

The MCMA believes that the QCO has been notified at a time when the industry is already reeling under the pressure and trying to reset the business during the pandemic. The industry feels that it is difficult to force the international suppliers to go for BIS certifications as the procedure of BIS registration is unmanageable during these times.

The MCMA says that there is a shortage of raw material used for packaging food and other items. It has resulted in an increase in prices of packaging items.

The tin containers and closures are mostly used for packing of edible and non-edible items. The tin-free steel is majorly used to manufacture closures, crowns, and components used to seal bottles for soft drinks, beer, juices and flavoured milk etc.

The government issued an order to bring a number of steel products under quality control. The order notified steel items cannot be produced, sold/traded, imported and stocked unless they have BIS mark. MCMA members believe that due to the Covid-19 pandemic, the foreign tinplate mills may not be in a position to procure the relevant BIS license. This will impact the metal packaging industry.

India is not "a big market" for international suppliers of tin plates. Hence they will not be interested in going into bureaucratic and expensive BIS certification. Since these suppliers have already stopped shipping tin plates to India there is a huge shortage in the market.

MCMA insists that ISO certification should be considered rather than only a BIS-like FSSAI to save the industry; and tackle the current shortage of raw materials in the domestic market of India.

Similar kinds of Quality Control orders had been issued earlier in 2008, 2015 and 2017. However, keeping in mind the demand supply gap, practical difficulties in implementation and requirement of the MSME sector particularly in the metal packaging the GoI withdrew the draft quality control order on tinplate / tin -free steel.  The situation has remained unchanged.  There is a demand supply gap of 250,000 tonnes per annum and the industry continues to be in the MSME sector. And so, MCMA suggested that the QCO dated 17 July, 2020 on tinplate/tin free steel and the products be withdrawn completely. It is believed that its implementation will affect the trade and industry engaged in the metal packaging sector. Also it will result in loss of employment and non-availability of metal packaging to essential sectors like food and pharma.  

 

 

 

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