Indian industry looks to double plastics use by 2020

By Steve Toloken
News Editor / International

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

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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.


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Indian industry looks to double plastics use by 2020

By Steve Toloken
News Editor / International

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

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