Carton producers sell on credit to survive pandemic

Carton industry owners are struggling to survive by selling their products on credit to handle the economic losses due to the Covid-19 pandemic.

Sales of locally-produced carton fell by 25% during the general shutdown declared by the government to curb the virus' spread. Though sales rose to 70-75% after the shutdown measures were relaxed, they did not end the plight of carton factories as selling on credit tripled.

Carton industry owners said customers are not paying back the money on time.

According to the Bangladesh Local Carton Manufacturers Association (BLCMA), there are more than 2,000 carton factories in the country. There is demand for 20-25,000 crore cartons in the country per year. The market is worth about Tk23,000 crore.

BLCMA claims that about 25 lakh people are directly or indirectly involved in the industry. More than a hundred factories have been shut due to the pandemic and about 50,000 workers have lost their jobs.

According to the association, large companies involved in the production of medicine, soft drinks and food are the main buyers of their carton. Some big industrial groups like Pran RFL, Bashundhara, Meghna, TK, and Square buy the lion's share of their products. The export-oriented garment industry also uses the carton they produce.

Mir Raihan Ali, the owner of Platinum Print and Pack Limited, told The Business Standard, "I am struggling to survive by selling products on credit. The amount of due payment is three times more than the cash payment. As a result, I am in a serious cash crisis."

Syed Fakhrul Alam, the owner of Modern Packaging, said, "I have been forced to lay off half of my workers because of the Covid-19 pandemic. I cannot pay the rest of the workers even by the 20th of the month because I have sold a large number of products on credit."

BLCMA president MA Basar has sought the government's help in overcoming the crisis. He said, "The carton industry has been deprived of the incentive packages announced by the government for traders to recover their losses due to Covid-19. Eighty percent of the carton factories are not able to meet the conditions to get this incentive."

He requested that the authorities relax the conditions for getting incentives.

The local carton industry is still dependent on local raw materials. But, in order to make quality carton in a competitive market, factory owners want to import: paper, duplex board, media paper, liner, etc.

The BLCMA president has requested the government reduce the duty imposed on the import of carton's raw materials.