No respite for the metal packaging industry

Also, the rising cases of Covid-19 and possibilities of lockdown and short working hours due to curfew have further pushed the industry in the dark. Over and above, the forceful implementation of BIS standard on import of tin plate is a stumbling block for the metal packaging industry which may lead to complete shutdown of the industry.

Despite repetitive representation and meeting with concerned ministry and department, there seems to be no relief for industry, which is largely operating under MSME sector. Net impact would be exorbitant increase of prices of packaging material, especially for pharma, food and beverages. Another setback would be shutting down of small units and ultimately job losses.

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

This industry which is largely dependent upon the import of tinplate/ tin-free steel from various countries is under tremendous pressure with the shortage of raw material and the prices have escalated more than 35% already with an indication that it is likely to increase further. Apart from prices, other major issue of concern is availability of material as domestic supply is not geared up to meet domestic demand.

As per the report of Industry body, PHDCCI, steel and steel products QCO will restrict the supply of input materials to crucial industries such as tin can making industry, metal packaging industry and processed food industry which is not in the wider interest of the nation considering the food loss is already up to 30% in the country. Therefore any move to ban imports of such material will result in production shortage, significant loss of job opportunities especially in the micro, small and medium enterprises (MSMEs) sector as well as lead to increase in defaults to banks.

India’s primary organisation that represents the interests of companies involved in the production of metal containers, packaging and allied components, Metal Container Manufacturers’ Association (MCMA), has urged the government to put on hold the implementation of steel and steel products Quality Control Order dated 17 July, 2020. The association has requested the ministry of steel to postpone the implementation of the QCO till sufficient quantity of tinplate/ tin-free steel is produced locally to meet the industries' demand of 700,000-tonnes per annum as the industry is already under the pressure due to the second wave of the pandemic with lockdown being implemented in few states will only worsen the situation.

The association has also requested the ministry of steel to allow use of equivalent ISO certified materials in addition to BIS certified material. MCMA requested from the ministry to allow the use of materials which are aligned to ISO. The same has been included in FSSAI order and also recommended by the ministry of micro, small & medium enterprises.

Following representations by the MCMA, the government had postponed it till 17 April 2021 but the industry has sought time till March 2022 so that issues affecting survival of metal packaging industry can be discussed again with the government in order to resolve this issue.

Due to the unprecedented situation imposed by the spread of Covid-19 with ban on international travel as well as fear in the minds of people, the foreign tinplate mills are unlikely to get the relevant BIS licences. Furthermore, the cost for getting such licenses and the fees payable to BIS would potentially be included in the selling price being charged from the businesses, thereby, raising their landed prices and requirement of more funds at a time when trade and industry is already struggling to reset their wheels and is facing liquidity constraints.

Similar kinds of Quality Control orders had been issued earlier also in 2008, 2015 and 2017 but keeping in mind the demand supply gap, practical difficulties in implementation and requirement of the MSME sector, particularly in the metal packaging, the government withdrew the draft quality control order on tinplate/ tin free steel. The situation has not changed since then. There is still a demand supply gap of 250,000 tonnes per annum and the industry mainly continues to be in the MSME sector. Therefore, MCMA once again suggested that the QCO dated 17 July 2020 on tinplate/ tin-free steel and the products should be withdrawn completely.