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Indian Plastic Industry

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The Indian plastic industry has taken great strides. In the last few decades, the industry has grown to the status of a leading sector in the country with a sizable base. The material is gaining notable importance in different spheres of activity and the per capita consumption is increasing at a fast pace. Continuous advancements and developments in polymer technology, processing machineries, expertise, and cost effective manufacturing is fast replacing the typical materials in different segments with plastics.

On the basis of value added, share of India's plastic products industry is about 0.5% of India's GDP. The export of plastic products also yield about 1% of the country's exports. The sector has a large presence of small scale companies in the industry, which account for more than 50% turnover of the industry and provides employment to an estimate of about 0.4 million people in the country. Approximately Rs 100 billion are invested in the form of fixed assets in the plastic processing industry.

History
Indian plastic industry has made significant achievements in the country ever since it made a promising beginning with the start of production of polystyrene in 1957. The industry is growing at a rapid pace and the per capita consumption of plastics in the country has increased several times as compared to the earlier decade. The chronology of production of polymers is summarized as under - Currently, the Indian plastic industry is highly fragmented with an estimate of around 25,000 firms and over 400,000 employees. The top 100 players of Indian plastic industry account for just 20% of the industry turnover. Barring 10 to 15% of the firms that can be categorized as medium scale enterprises, most of the units operate on a small – scale basis.

The immense potential of Indian plastic industry has motivated Indian manufacturers to acquire technical expertise, achieve superior quality standards and build capacities in different facets of the booming plastic industry. Substantial developments in the plastic machinery sector coupled with matching developments in the petrochemical sector, both of which support the plastic processing industry, have facilitated the plastic processors to develop capacities to cater both the domestic as well as overseas exports.

Exports
In the calendar year 2006, the value of world plastic export was US$ 375 billion. However the share of India was less than 1 % with exports of worth US$ 3.187 billion. The percentage of growth in export was 21 %. During this trend of growth in exports, the export of plastics raw material increased from 55 % to 60 % of the total export of plastic goods, while the export of processed plastic goods has registered a negative growth from 45 % to 9 %. According to recent reports, the industry is said to be losing an opportunity of USD 300 million through value addition on the raw materials that are exported.

The top 10 trading partners for Indian plastic industry are The Indian plastic exports were valued at about US$ 532 million during FY 2004 (1st half FY2005 exports US $ 295 million). With significant capacity additions leading to over-capacity in domestic markets during FY2001 and beyond, polymer exports have increased considerably. However, due to the lower competitiveness of the plastic products industry, polymers have been exported directly.

Products
The major plastic products that India export are -

Raw Materials - PVC, polypropylene, polyethylene, polystyrene, ABS, polyester chips, urea / phenol formaldehyde, master batches, additives, etc

Packaging - PP / HDPE woven sacks / bags / fabrics, poly-lined jute goods, box strapping, BOPP tapes, a range of plastic sheeting / films (of PVC, PP, HDPE, nylon, FRP, PTFE, acrylic, etc.), pouches, crates, bottles, containers, barrels, cans, carboys, shopping / carrier / garbage bags.

Films - Polyester film, BOPP film, mesh, metallised / multilayer films and photo films

Consumer Goods - Toothbrushes, cleaning brushes, hair brushes, nail / cosmetic brushes, combs, molded furniture (chairs, tables, etc.) house ware, kitchenware, insulated molded house ware, microwave re-heatable containers, mats and mattresses, water bottles, gifts and novelties, a range of stationery items like files, folders, mathematical instruments, etc.

Writing Instruments - Pens, ball pens, markers, sign pens, refills, etc.

Travel ware - Molded luggage, soft luggage, a range of bags like school bags / ladies handbags, wallets, etc.

Leather Cloth / Artificial Leather Floor Coverings - Vinyl floor coverings and linoleums

Foam Boards Drip Irrigation Systems / Components Pipes & Pipe Fittings - Made of PVC, HDPE, PP, FRP, nylon

Water Storage Tanks Toys and Games Engineering Plastics - Auto components, parts for various machinery / equipment in telecommunications, railways, electronics, etc.

Electrical Accessories FRP / GRP Products - Safety helmets / equipment, pipes, storage tanks, etc.

Sanitary Fittings - Cisterns, toilet seats, bathroom fittings, etc.

Construction - PVC profiles, doors, windows, etc.

Tarpaulins Laminates Fishnets / Fishing Lines Cordage / Ropes / Twins Eyewear - Lenses, spectacle frames, goggles, etc.

Laboratory Ware Surgical / Medical - Disposable syringes, blood / urine bags, I.V. sets, etc.

Trends in Indian Export of Plastic Products -

India Plastic Products Exports FY 2004 US$ 531.6 mn

Future Forecast
The Indian plastic industry clearly has the potential to continue its fast growth. However, over the next few years, competition in the industry is expected to increase considerably, as a result of global trends, which will become applicable to the liberalizing economy of country. To survive the competition, both polymer manufacturers and processors will need to adopt radically new methods and approaches to reduce costs, improve market and customer service and management of performance.

The per capita consumption of plastics in India is well below the world average. However it also reflects the many years of growth ahead, as the country's economy continues to grow and upgrade the usage of products. Translating the expected growth rate into incremental demand, it is obvious that the country will remain one of the largest sources of additional demand for almost all kinds of plastics.

Hence, it is clear that plastics will continue to be a growth industry, with boosting prospects for fresh investments in polymerization and downstream processing capacity. This is in contrast to the situation in various other countries, where growth prospects are limited, either because of stagnant demand or due to the historical over building. In such countries, the overall outlook would be far less promising, with the key imperatives being cost cutting and capacity rationalization.