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Turnover of Indian plastic industry to touch Rs 1,000 bln in 2012 (13-9-2011)
 
The Plastic industry in India symbolizes a promising industry and is creating new employment opportunities for the people of India. The per capita consumption of plastic products in India is growing and is moving towards 2.5 times GDP growth. This potentiality of the market will surely actuate the entrepreneurs to invest in this industry. The Government of India is trying to set up the economic reforms to elevate and boost the plastic industry by joint venturing, foreign investments and entrepreneurs are trying to provide high quality plastic products, so that it becomes a booming industry.
The overall turnover of the plastics processing industry that currently stands at Rs.85,000 crore is expected to touch Rs. 100,000 crore in the year 2012 on the basis of the expected growth of the demand potential to 12.50 mln tons from the current 9 mln tons. The number of processing units from the current 30,000 is expected to increased to 40,000, a 33% growth which will in-turn also increase the employment potential of the sector. Independent studies show that the industry that currently hires more than 3 mln people, directly and indirectly, is expected to employ close to 4 mln people in 2012 and 7 mln people by the year 2015.
Ashok Goel, President - Plastindia Foundation said, "The Indian plastic processing sector needs to consolidate, reap economies of scale and become competitive. The key to achieve this is modernising processing facilities, improving labour productivity and enhancing exports. On the other hand, the industry also needs to pull up its socks where recycling of plastics is concerned - quality standards need to be laid down for the recycling sector in India and compliance needs to be ensured.
The growth of the plastics industry has seen the number of processing units grow from 25,000 in the year to 2010 to 30,000 units in 2011. The exponential growth anticipated over the next three years will see this number go up to 40,000 units. As of today, just about 10-15% of these units can be classified as medium scale operations and the rest all operate on a small scale basis. Over 70% of the industry is in the unorganized sector.
The Plastic industry chain can be classified into two primary segments, viz., the Upstream which is the manufacturing of polymers and the Downstream which is the conversion of polymers into plastic articles. The upstream Polymer manufacturers have commissioned globally competitive size plants with imported state-of-art technology from the world leaders. The upstream petrochemicals industries have also witnessed consolidation to remain globally competitive.The downstream plastic processing industry is highly fragmented and consists of micro, small and medium units. Presently, 75% are in the small-scale sector. The small-scale sector, however, accounts for only about 25% of polymer consumption. The industry also consumes recycled plastic, which constitutes about 30% of total consumption.
Despite the industry's high growth spanning over a period of over 2 decades and crossing several milestones, Indian plastics industry is yet to realize its full potential. The per capita consumption of plastics in India, at 5 kgs, is the lowest in the world. The average global per capita consumption is 26 kgs. The low level of per capita plastics consumption in India is indicative of the massive growth potential of the plastic industry. India has the advantage of high population and is expected to maintain high economic growth. This should propel India's plastics consumption to new levels in coming years.
The next two decades are expected to offer unprecedented opportunities for the plastic industry in India. According to a CRISIL Report, the world trade in Plastics is expected to reach 140 mln tons in 2012 and provides a lucrative opportunity for India, but with just a 1.5% share in world export volumes, India is not in a position to capture this opportunity. The Indian Plastic Industry, going forward, needs to consolidate and enhance capacity, upgrade facilities and improve productivity and increase utilisation of critical plastic applications.
The one critical factor that plagues the Indian Plastic industry is the common perception that plastic is not environmentally friendly. This primarily is due to the low awareness about the energy saving property of plastics and the benefits to industries that utilise plastics. It is a little known fact that, while India has the lowest per capita consumption in the world, it is the highest recycler of plastics. In India, we recycle 60% from both industry and urban waste as compared to the world average of 20-25%.
Last but not the least, the various associations need to come together and put in a concerted effort to join hands to enhance the image and the growth of the Indian Plastic industry, create opportunities to demonstrate the industry's capabilities, educate all segments of the society about the benefits of plastics. The associations need to create a positive policy framework with all statutory entities and increase per capita consumption of plastics, encourage exports thereby significantly contributing to national growth.
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