Corrugated Packaging Industry Needs to Unpack Challengers to Thrive

By Bannet Gamalath | Published: 2:00 AM Oct 26 2021

By Bannet Gamalath 

Today, Corrugated Cartons are recognised as among the world’s most widely used material for packaging. As a material, it also offers almost unlimited possibilities to produce packaging with different properties and shapes. Despite the fact that this industry is being accepted as an industry that serves nearly every sector of the economy and also the integral part of supply chain, corrugated cartons have not historically been regarded as an interesting area of discussion. 

Market interest 

Consequent to the IPO announcement made by one of the carton manufacturers’, it was widely discussed about the industry. However, these information was not wholly accurate. Given the scenario and the interest of public in the industry, as the President of the Lanka Corrugated Cartons Manufacturers Association (LCCMA), it is prudent to shed some lights on the industry. 

Industry in context 

At present, around 30 small to large Corrugated Cartons Manufacturers operate in the island. Out of these firms, seven (7) companies control the 80% of the market share while the remainder contribute around 20%. The demand for the corrugated cartons in Sri Lanka is very limited as our economy has not shown steady growth in the past. The current market is around 14,500 Mtns per month and the yearon-year growth of the market is less than 2%. Hence, there is a huge competition among the players to capture the existing market. 

Consequently, with the market pressure, the industry maintains the minimal prices and eventually, the companies just make normal profits. Early 2000s, many companies had to discontinue their operation due to heavy losses including the then corrugated giants – MSH Packaging and Nisol Corrugated Packaging. The net profit margin of the industry is averaged to 5% and this can vary around 3%-7%. The industry very rarely makes 7% margin and is usually achieved when the paper prices are at rock-bottom rates. 

Market leadership 

During last two weeks, there was a debate over the market leadership in the industry consequent to marketing material and prospects published related to the IPO of Ex-Pack Corrugated Cartons Limited, one of our members. It is rather difficult to ascertain the market leader as the information of the market players are limited and not open to public. Almost all corrugated cartons companies are private limited establishments or family-driven businesses. 

Hence, the most reliable information to ascertain the market position is the import statistics provided by Government Census and Statistical Department. The attached pie-chart depicts the import statistics by company for last two years. While the statistics provided are based on imports, the members of the association also source local paper to a certain extent. The paper manufacturing industry in Sri Lanka is at the infant stage and yet to expand. Hence, the convertors are being forced to rely upon the imported paper mostly. The information about local quantities not available in the public domain. 


During last few years the board making capacity in Sri Lanka was expanded as some of the companies increased operations through new corrugated plants. Today these plants contribute a monthly capacity of around 4,000 Mtns while the second level entities maintain a capacity around 2,500 Mtns per month. It is estimated that the total board making capacity in the country is around 34,000 – 36,000 Mtns monthly. However, the printing capacity is limited and does not match the same extent. Moreover, any company can enhance their printing capacity within 5-6 months as good machinery can be sourced from China and Taiwan. 


While the interest in packaging is growing and the realization that other sectors cannot survive in isolation without packaging, the industry continues to face many challenges. The latest upsurge of the prices began nearly one-and-half years ago and adversely affecting the industry. As a result, paper prices have escalated by around 70% and this alarming upward trend is expected to rise over 100% towards the end of this year. 

Adding to this crisis, is the huge shortage of paper in the international market consequent to the ill effects of COVID-19 pandemic. Furthermore, in the midst of this shortage, our members continue to struggle to open LCs with the current Dollar restrictions imposed by the local banks. While the industry is equipped with adequate infrastructure to support the future growth of Sri Lanka’s economy, it is also imperative that all the stake holders and officials contribute towards a sustainable and thriving sector. 

The writer is a CEO of UNIDIL Packaging Ltd which is the packaging arm of Vallibel One Plc. He is also the President of Lanka Corrugated Carton Manufacturers’ Association.

By Bannet Gamalath | Published: 2:00 AM Oct 26 2021

More News