Sail, Tcil To Cut Tinplate Production By 50 Per Cent

A rise in the import of tinplate secondaries in the wake of recent fiscal measures, reducing import duties, has led tinplate majors, Steel Authority of India Ltd (SAIL) and Tinplate Company of India Ltd (TCIL), to cut production by 50 per cent during the current fiscal.

Of greater concern is the fact that secondaries, which are not approved as food packaging material worldwide, are being increasingly used by the Indian food processing industry.

The size of the tinplate market in India is about 2.20 million tonne per annum, or Rs 900 crore. Of this, the food sector consumes about 68 per cent or 1.50 million tonne of tinplate while the remaining 70,000 tonne is consumed by the non-food sector.

 

Vanaspati and the edible oil industry is the single largest user of tinplate, consuming one million tonne or 40 per cent of total tinplate used.

The recent liberalisation in the import duty structure has brought the duty on secondaries at par with that of prime tinplate. Over the last five fiscals, the import duty on secondaries has dropped from 110 per cent in 1992-93 to 30 per cent in 1996-97. According to industry analysts the growth in imports has come totally at the cost of domestic producers.

SAIL and TCIL together have an installed capacity of 2.40 million tonne per annum which is sufficient to meet the domestic market demand of 2.20 million tonne. SAIL annually produces 1.50 million tonne at its Rourkela steel plant while TCIL has an installed capacity of 90,000 tonne. To counter the increased flow of imports, TCIL has decided to produce only 55,000 tonne this fiscal while the Rourkela plant produced only 13,000 tonne during the last fiscal.

Along with secondaries flooding the food packaging industry, there is the problem of 'misprint' where printed tinplate is dumped in third world countries through imports.

These easily find their way into the food packaging industry since re-cycled tinplate imports are much cheaper. This has been a major reason behind the market shrinking for leading tinplate producers like SAIL and TCIL.

According to sources, the recycled tinplate finds its way into the market because of the prescriptive and implementation wings of the various regulatory laws in the food sector are voluntary instead of being mandatory. While regulations to protect the food sector are many, there is no proper legal organisation to enforce them.

The Bureau of Indian Standards prescribes 'prime' quality tinplate for packaging vanaspati and edible oils.

The government of India, following this prescription, had reissued a ban on the use of once-used cans for packing these food products. However, this industry consumes 67,988 million tonne of secondaries every year which means that only 32 per cent of the prescribed prime tinplate is used to package vanaspati and edible oils.