Output cap imposed by Maharashtra govt hits chemicals' producers

At a time when the government of Maharashtra is trying to attract investors, the chemicals industry here says it plans to shift units to neighbouring states.

The reason is a 'production cap' imposed by the state's environment ministry. Thousands of chemical manufacturing units, largely small and medium enterprises (SMEs) and micro SMEs (MSMEs) have cut production by 20-50 per cent. A cap has been set on output of all products and permission is needed for any increase. 

"There is no flexibility for in the product mix. By the time approval arrives, market sentiment changes, as buyers seek to import. Hence, many producers are looking to shift their factories to alternative destinations -- Gujarat is preferred," said Satish Wagh, chairman, Supriya Lifescience, while announcing Cap India 2018, a three-day seminar scheduled to be held here on March 22-24.

This has also affected allied sectors such as paints, pigments and plastics. In addition, the Maharashtra government has announced a ban on sale of plastic bags and packaging material, as also on production of such material, after next month. This is set to impact millions of skilled and unskilled workers.

Ravi Jashnani, president, Maharashtra Plastic Manufacturing Association, is  organising a protest march on Friday over the plastic ban. "For several months, we have tried to bring to the notice of the government the drawbacks of such a blanket ban on plastic usage and production and also enhance awareness amongst the public. Unfortunately we have not succeeded in gaining any support," he said.

An estimated 20 million tonnes of plastic is used daily life, with at least 50,000 units engaged in this and 4 million people being dependent on this industry. These include units engaged in re-processing of plastic material. 

"India has plastic use of 18 kg per head. In America, it is 109 kg per head and despite the huge consumption, one cannot find a piece plastic of it on its roads. The average use of plastic the world over is 30 kg per head and no country has banned their use," argued Jashnani.

"We are exploring Latin American markets with our valueadded products, including medical equipment, laminates, packaging products and others, which possess vast potential due to the low cost of production here. India's plastics exports contribute less than 1 per cent of the world market at $7.56 billion. This can go up through government support," said Ashok Basak, chairman, of the Plastics Export Promotion Council.