Metal packaging industry continues face dark times

New Delhi: As per the recent notification by the government, Metal Container Manufacturers’ Association (MCMA) has received a three-month extension (on 17th April) from the government for the implementation of BIS notification. This move by the policy makers is not well received by the Industry keeping in mind the lead time required to import products. MCMA has urged for an extension from the government till March 2022.
 
While MCMA appreciates the support given by the Government by providing a 3 months extension but this will not be helpful at all. The 10,000 Crore Metal Packaging Industry of India has already been reeling under pressure as they have hardly any option left to secure raw material as most of the global players and suppliers of Tinplate/ Tin free steel have preferred to keep out India from supplying raw material in the wake of imposition of BIS standards.
 
Also, the cases of Covid 19 have surged and possibilities of lockdown allover in India and short working hours due to curfew have pushed the industry further in dark adding to the already acute shortage of raw material.
 
This non extension of QCO will not only affect the Metal packaging Industry involved primarily in  the MSME sector but also Pharma, Food & beverages Industry who are completely dependent on packaging  Industry. Needless to say this will also result in Job losses too.
 
Furthermore, there is already a huge demand supply gap of raw material used for packaging food and other items. It has resulted in an exorbitant increase in prices of packaging items. The metal/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 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 almost 30-40% in addition to serious issue of availability of inputs .
 
India’s primary organization 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 17th July, 2020 Norms. 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 700000 tonnes per annum as the industry is already under pressure due to the pandemic and the second wave of the pandemic with lockdown being implement in few states will only worsen the situation.
 
The Association has also requested the Ministry of Steel to allow use of ISO certified 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 FSSAI order and also recommended by the Ministry of Micro, Small & Medium Enterprises (MSME).
 
The Ministry of Steel issued an order called: the steel and steel products quality control order (QCO) on 17 July 2020. This order mandates BIS Certification on the major input required by the industry like tinplate and tin-free steel. It imposes restrictions on steel products like easy-open ends, peel off ends, which the industry imports from several foreign countries.
 
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 and now with the lock down anticipated again things are only getting worse for the industry. 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. Even the companies who have applied for BIS Registration , their applications are pending with BIS since last year as concern experts are not able to travel to respective countries to approve their plants. Therefore, on the one hand Govt is not giving BIS registration due to COVID travel restrictions and on the other not extending QCO for at least 12 months so that industry can continue to get its essential inputs like Tin Plate/Tin free steel and components like Easy Open Ends etc..
 
MCMA insists that in the meantime, ISO certification should be considered rather than only   BIS -like what has already been notified by FSSAI to save the industry and tackle the current shortage of raw materials in the domestic market of India.
 
The steel and steel products quality control order dated July 17, 2020, which directs usage of BIS certified raw materials, has had an impact on the metal container packaging industry in India. This has resulted in a shortage of raw materials as imported inputs don’t have BIS certification, although they comply with recognised  International Standards. Following representations by the MCMA, the government had previously postponed it till 17 April 2021 and now have granted a further three month extension, but the industry seeks more time for implementation of QCO, at least till March 2022.
 
The government issued an order to bring 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 which will impact the industry significantly.
 
India is not a very big market for international suppliers of tin plates and 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 of the products in the market.
 
Similar kind of Quality Control orders had been issued earlier also in the year 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 250000 tonnes per annum and the industry mainly continues to be in the MSME sector. Therefore, MCMA once again requested that the QCO dated 17th July, 2020 on tinplate/tin free steel and the products should be withdrawn completely. It is apprehended that its implementation will seriously affect the trade and industry engaged in the metal packaging sector and will result in loss of employment and non-availability of metal packaging to essential sectors like food, dairy, edible oil, pharma, paints etc .