Plastic Processing Industry – Long Way Down and Long Way Forward, Features - Personality

M P Taparia
Mangaging Director,
Supreme Industries Limited

Q. How do you see the Indian Plastic Processing Industry shape in the last 5 years?
In the previous five years i.e. 2003-04 to 2008-09, the Indian plastics processing industry has created additional processing capacity of 14% in tonnage on annualised basis year after year. The annual processing capacity as on 1.4.2009 has become around 14 million tonnes.

In the previous five years, the growth in consumption of plastics goods was 12% per year by volume, year after year. Thus, the industry has registered higher growth rate as compared to the GDP growth in the economy.

The industry has consumed around 6.5 million tonnes of prime plastics in the year 2008-09. The industry also converted 1.5 million tonnes of recycled plastics into products in the year 2008-09.

Q. Can you please comment on the adoption of latest in technology by the industry here?
There were three significant initiatives taken by the industry in the last five years from the technology point of view.
• Machines for production were installed with higher capacity per machine. This has helped to reduce the cost of production. Consumption of power per kg of finished goods has gone down. The number of people required for production has not increased to the extent of increase in production.
• Machines of higher efficiency were installed which have improved the yield of good quality product on percentage basis compared to earlier converting machines.
• The industry has also entered into newer technology transfer agreements in various product segments to offer plastics products to meet the need of critical segments of the industry which require superior functional properties.

Q. Do you see the industry moving out of recession (if it was felt ever) and what specific actions do you think are responsible for its growth?
The plastics industry, like other industries, went into turmoil along with the world economy, during July 2008 to October 2008. However, Indian converters came out of this precarious situation quickly as the converters were mostly serving the local economy. Local demands became quite high due to steep reduction in plastic products prices due to fall in raw material prices supported by the reduction in excise duty from 14% to 8% by February 2009.

Plastics goods are mass consumption goods. With better agricultural crop in the previous year and higher procurement prices of agricultural produce along with part disbursal of increased salaries based on Sixth Pay Commission Report has created a strong demand for plastics products domestically starting from November 2008.

Q. For India, to be positioned as the Global Sourcing Hub for Plastics, what are your views on the ability of the Plastic Processing Industry to manage this positive change?
Our country has the potential to become a global sourcing hub to procure plastics goods. But, our country is not able to take advantage of this opportunity. The regulatory restrictions on manufacturing have encouraged creation of fragmented capacities for manufacturing of plastics products.

The poor quality of power, high cost of infrastructure and rigid labour policy are coming as further constraints in creation of large capacity to cater to the export market. Such capacities alone can offer volume and variety of plastics goods to cater to the international markets.

Exports of plastics goods in volume by China are 10 times more than India. Our plastics converting industry is capable to encash this opportunity. They are keen to cater to the global requirements of plastics products, but this has to be facilitated by the Government initiatives in this direction.

Plastic Processing Industry – Long Way Down and Long Way Forward

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