Plastic prices up 30 per cent

Pen makers in unorganised sector are the worst-hit.

Plastics used in making pens have jumped 25-30 per cent in the last six months, with polypropylene prices ranging between Rs 97 and 106 per kg, from around Rs 75 per kg in the first quarter of the current financial year.

Similarly, polystyrene, another raw material, surged to Rs 91-92 per kg as against Rs 76 per kg six months ago. Prices of SAN (styrene, acrylio and nitryle) also perked up to Rs 116-117 per kg from Rs 85 per kg six months ago.

The sudden spurt in the prices has hit pen manufacturers and they are compelled to cut production in the low-end segment, where margin is lower. The Mumbai-based on Thursday Writing Products, one of the leading pen manufacturers, cut output by 15 per cent in order to maintain margins.

 

The company cut its production in low-end products priced below Rs 5 per unit. For the high-end products, priced above Rs 10 per unit, the company is planning to produce quality products with glossy look.

Now, with the prices started softening, the company is planning to resume production with full capacity. Additionally, the company is doubling its production capacity to 4 million units per day from the existing 2 million units per day at an investment of Rs 37 crore. The plant, which will mainly cater to export markets, is set to commence commercial production soon.

The unorganised segment has been the worst-hit and are forced to close down operations creating a huge void in the pen market in the country. The Rs 700-crore unorganised pen sector, comprising thousands of small hand-moulding producers, is now up for grabs for the organised players like on Thursday.