Plastics units upbeat about 2011

About 51 per cent of the small and medium units expect sales growth of more than 20 per cent

A survey of small and medium enterprises (SMEs) in the plastics sector has revealed that a majority are upbeat about their prospects in 2011, with 51.28 per cent expecting sales growth of more than 20 per cent over 2010, while 37.18 per cent are hopeful of growth of up to 20 per cent. Only 11.54 per cent expect sales to decline in 2011 vis-a-vis 2010.

The plastics industry, whose products find application in both industrial units and the household sector, was hit by recession in 2009 but recovered in 2010. The survey was conducted by IndiaMART Knowledge Services (IKS).

A high percentage (61.5 per cent) of respondents said the market picked up in 2010. Some 16.6 per cent reported that it had worsened, while 21.8 per cent found no change. About 17.9 per cent of the participants said consumer sentiment in 2010 surpassed their expectations while 61.5 per cent reported average improvement and 20.5 per cent reported negative consumer sentiment.

Sales improved by more than 20 per cent for 28.2 per cent of the respondents in 2010, while 50 per cent witnessed an increase in sales of up to 20 per cent. Only 21.8 per cent experienced a decline in sales in 2010.

On product prices, 15.3 per cent of the respondents reported that they improved significantly in 2010, while 38.4 per cent experienced marginal improvement. Product prices remained stable for 34.6 per cent but declined for 11.5 per cent of the participants. On the other hand, input costs increased for 83.3 per cent of the respondents while 16.7 per cent found no change.

The survey revealed that 32 per cent identified the liquidity crunch as a major concern. Poor consumer response was a bigger challenge for 46.1 per cent, while 21.8 per cent said lack of infrastructure was the main hurdle to growth.

On liquidity, 74.36 per cent of the respondents replied that it needs to be eased further; only 25.6 per cent believed that it had eased in 2010, as compared to 2009.