Plastics

Plastics

Plastics are an indispensible part of the Indian Economy. Plastics are used in various sectors like packaging, infrastructure, plasticulture, processed food and consumer durables.

The Indian Plastics Industry comprises of over 25000 units, out of which 10-15% can be classified as medium scale operators and the rest are classified as small scale operators. The exports of plastics were Rs. 16,500 crore in 2008-09.The Plastics processing industry provides employment to 3.3 million people directly and indirectly. During 2000-2005 the installed capacity on plastic processing sector increased from 8270 kilo tons to 11167 kilo tons with a Compounded Annual Rate of Growth of 8 %. It provides Rs. 6,900 crore in revenue to the government annually.

Plastics industry in India is divided into four sections – polymers, processed plastics, equipment manufacturers and recycling units. Processed plastics, equipment manufacturers and recycling units are mainly unorganized in nature while the polymer sector is mostly organized with the presence of big players like Reliance, GAIL, Finolex and Haldia Petrochemicals.

The plastics industry got a new lease of life after 1991 when joint ventures, foreign investment and access to technology from developed countries galvanized the industry. Tremendous development in the plastic machinery sector coupled with development in the petrochemical sector, both of which support the plastics industry have facilitated the sector to build capacities to service both the domestic as well as the international market.

The industry, being very fragmented in nature, has a low scale of production and a consequently high cost of production. However, India has a strong base in the polymer sector and also enjoys the privilege of low cost labor and a high percentage of recycled plastic. The industry also needs to focus more on the exports of its products as there exists a huge potential there. The top 10 trading partners for plastic products from India include USA, UAE, Italy, UK, Belgium, Germany, Singapore, Saudi Arabia, China & Hong Kong.

The next two decades are expected to offer unprecedented opportunities for the plastic industry in India. India’s current per capita consumption of plastics is 1/5th of the world average i.e. 5 kg per capita against a world average of 25 kg. This shows the enormous potential still to be exploited in India. India held a small share of 1.6% of the world trade in 2008. This is expected to double to 3.2% by 2012. Along with this, opportunities exist in plasticulture (which is in a nascent stage in India) and processed plastic exports, where India has negligible presence.

Data sources: ICPE- CRISIL Report, CIPET, PLEXCONCIL, Planning Commission

Relevant Reports
Indian Plastics Industry Vision 2012->Indian Center for Plastics In Environment (ICPE)
Strategic Analysis and Road Map for Penetrating the US markets for Plastic Consumer Products
A Strategic Supply Side Analysis Of Indian Exporters of Plastic Consumer Products
Bio-degradable Plastics- Impact on Environment
The Plastics Conundrum What is the Way Out?
Rubber and Plastics
Evolution of packaging: Trend and growth of the plastic Industry