Indian industry looks to double plastics use by 2020

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: January 23, 2014 1:18 pm ET
Updated: January 23, 2014 1:26 pm ET

Image By: Plastics News photo by Joe Wilssens Nanavaty

Related to this story

Topics Materials, Asia

In spite of some recent economic headwinds, India's plastics industry believes it's on track to more than double its polymer consumption by 2020, to 20 million metric tons.

At a gathering of more than 30 Indian plastics trade associations on the sidelines of the Plastivision trade show in Mumbai in December, industry leaders pushed the case that the fundamentals remain strong for the country's plastic sector, although growth has slipped.

"We truly believe the Indian growth drivers are in place," said Kamal Nanavaty, president of strategy development at Reliance Industries Ltd., in a speech. "OK, we've gone through a slowdown but it is just temporary."

India's economy has slowed the last two years, with GDP growth of 3.2 percent in 2012 and 4.4 percent last year, down from 9-10 percent in several of the previous years. But it's projected to quicken to 5.4 percent this year and 6.4 percent in 2015, according to the International Monetary Fund.

Some of the long-term drivers that Nanavaty mentioned include rural income that's expected to triple by 2020, to a total of $1.8 trillion, and annual car production projected to grow from 1.7 million vehicles last year to 9.3 million by 2020.

In addition, the Indian government plans to spend $1 trillion dollars on infrastructure by 2020, the market for electronics goods will grow by 700 percent and country's manufacturing sector will likely jump from the world's 12th largest now to number seven by 2025, said Nanavaty, who is also vice president of the Chemicals and Petrochemicals Manufacturers Association of India.

India's plastics sector has been hit by the country's general economic troubles in the last two years, including the weakening rupee, said Arvind Mehta, chairman of the governing council of the All India Plastic Manufacturers' Association.

But he also said underlying economic activity remains strong as use of plastic spreads to more sectors, opening new markets and replacing traditional materials.

"Previously in India plastics was limited only to household consumer durables and a little in packaging," he said in an interview with Plastics News. "But now it is accepted in infrastructure, in health care, in agriculture. Whatever sector you count, it is accepted."

Mehta, who is chairman of Welset Plast Extrusions Pvt. Ltd., and Nanavaty both said plastics growth has slowed, with Mehta estimating it's dropped from 14 percent to something closer to 10 percent.

"The economy is on the downturn just now," Mehta said. "No doubt in plastics there is some little slowdown like that, but fortunately for us, the plastics industry has become a little mature and the government has accepted by and large plastics as a material of choice."

Nanavaty said plastics consumption continues to grow about twice the rate of India's overall economy. Consumption of most polymers will grow at between 8-12 percent a year through 2020, he predicted.

That growth is coming off a very low base, however, with India using about 8 kilograms of plastic per capita, compared with more than 60 kg per person in developed economies like the United States.

At the conclave meeting, which Mehta said was the broadest gathering of industry associations to date, several participants talked about environmental challenges facing the industry.

A speaker from a PET association pointed to recent activity by non-governmental groups to try to ban PET in pharmaceutical packaging, as one example, and the joint secretary of the government's Department of Chemicals and Petrochemicals, Avinash Joshi, urged the industry to do much more to address its environmental and image problems.

But most of the attention was focused on economic problems and opportunities.

Nanavaty noted that India's industry still suffers competitively because it's much smaller than China's plastics sector. China has three to 20 times more production of most types of polymers than India, even though their populations are relatively equal, he said.

But Nanavaty suggested to the group the rising costs and economic challenges of China are an opportunity.

He said CPMA and AIMPA should commission a study, hiring a global consultancy, to identify what is needed to get labor intensive industries in China to move to India, and present that to the government.

"India should capitalize on this," he said.


Comments

Indian industry looks to double plastics use by 2020

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: January 23, 2014 1:18 pm ET
Updated: January 23, 2014 1:26 pm ET

Post Your Comments


Back to story


More stories

Image

EPA fines RI polymer company

August 29, 2014 1:20 pm ET

A Rhode Island polymer manufacturer has reached a $60,000 settlement with the U.S. Environmental Protection Agency (EPA) for violating federal clean...    More

Image

Haitian's standardization efforts paying off

August 29, 2014 9:53 am ET

Streamlined design efforts and robust export sales helped propel Ningbo, China-based injection molding machine manufacturer Haitian International...    More

Image

Chinese compounders seek market shares, often at the expense of margins

August 29, 2014 10:02 am ET

China's largest compounder, Kingfa Sci. & Tech. Co. Ltd., as well as its more automotive-focused counterparts Shanghai Pret Composites Co. Ltd. and...    More

Image

PP prices rise 5 cents

August 28, 2014 3:59 pm ET

After a one-month break, volatility has returned to the North American polypropylene resin market, with prices increasing by an average of 5 cents...    More

Image

DuPont fined for 2010 chemicals release

August 28, 2014 1:37 pm ET

DuPont Co. has been fined almost $1.3 million for the release of several chemicals — including plastics feedstock phosgene — at its plant ...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events