Plastics industry shifting gear to reach next level of growth

The plastics industry seems to be going through a major change as the processing units shift focus from traditional packaging to newer segments such as equipment manufacturing for automobiles, agriculture, poultry farming, agriculture and blown films.

The plastics product manufacturing and processing business, which employs over 3.6 million people directly in India, is considered as one of the most sought after industries among the entrepreneurs and start ups in India. The industry is growing at an annual rate of over 15 per cent and the emerging segments include agro-based as well as consumer based.

Top industry players believed that the plastics industry has newer avenues in the field of agriculture, poultry farming and blown films besides the traditionally known areas of growth that included packaging, automobiles, extrusion etc.

"The plastics industry in India is on the move. There are ample of newer avenues being generated in poultry farming, agriculture, blown films that are used in tetra and other types of packaging. We are seeing a change in the mind set of Indian consumers with regard to the plastic products. They no longer find it only a pollutant product. Rather it is more environment friendly and economical than other substitutes like metals," said Yogesh Shah, president, the All India Plastics Manufacturers' Association (AIPMA).

According to industry sources, India's annual production of plastics products (inclusive all type of processed plastics) is recorded at 8 million tonnes. The industry expects the production to swell up to 15 million tonnes in next three years. India has a per capita consumption of plastics at 8 kg at present, which is much below the 25 kg of China.

"China is a big competition for us, not only for the production and marketing but also on the consumption front. We are lagging behind because the industry was not encouraged due to its polluting nature, which is also debatable. But now, with other industries gearing up and acceptance of plastics rising among consumers, we see our per capita consumption to rise to 20-25 kg in next five years," said Jayesh Rambhia, vice-president, AIPMA.

In exports, major destinations included Africa, Europe and the US, while some of the Indian companies are also exploring Chinese markets. The global demand is also seen shifting from China to India for the finished plastic products. The finished goods exports are pegged at USD 5.3 billion in the current financial year, which will reflect a 15 per cent growth over last year.

The industry has also called for government incentives in the form of simplification of process of tax filing and bring regulation in the raw material suppliers so as to contain a possible price escalation through cartels. Currently, public enterprises including GAIL, ONGC and IOC provide raw materials including the key ingredient, polymers; joined with the leading player, Reliance Industries.

Gujarat holds nearly 60 per cent of the estimated Rs 800 million plastics industry.