Britain's plastics industry leaders have sealed a friendship deal with their counterparts in India that should lead to new trade, cooperation and possible joint ventures among member companies.
British Plastics Federation President Jim Jeffries joined Ashok Goel, president of the Organization of Plastics Processors of India, in signing a memorandum of understanding to build upon the groups' relationship and provide a platform for further collaboration.
For plastics processors and machinery suppliers in the United Kingdom, India's huge population and growing affluence present a major opportunity to take advantage of a still largely untapped market. India's plastics consumption remains very low at just 6.6 pounds per capita, compared with 172 pounds per capita in Britain.
``Indian consumer spending has been rising at an annual average of 15 percent for the past three years, spurred on by India's growing middle class of 250 million people, about a quarter of the population. There is no question that the Indian plastics industry, with its proximity to Middle East raw materials, will soon rival that of China,'' BPF director-general Peter Davis said during Interplas 2005, held Oct. 3-7 in Birmingham.
Davis pointed out that the United Kingdom market, although a fraction of its partner's market size, offers Indian companies many opportunities. Goel said India's advantages to British plastics firms as a potential low-cost manufacturing base and a massive untapped market. Longer term, Asia will provide an even more attractive location for manufacturing, he said.
``Right now, manufacturing is shifting to central and Eastern Europe, but in those regions, as I understand it, wages are lower than Britain but are rising at about 12 percent a year, rising especially after the expansion of the European Union.
``That advantage will soon disappear and so the [U.K.] industry could need an even longer-term base for manufacturing operations. So what comes to mind are India and China,'' said Goel, vice chairman and managing director of Mumbai, India-based Essel Propack Ltd., a major global producer of laminated plastics tubes.
India's large but fragmented processing sector offers opportunities for consolidation, as well as for greenfield development or cooperation between Indian and British players, Goel said.
``There are some good [Indian] companies who have already gone international or have a vision to go global. These people understand how to collaborate with multinationals,'' he said.
Jeffries highlighted the close ties between the two nations, which have created a disproportionate amount of trade between them in the plastics sector. The relationship between the British and Indian plastics industries grew from the participation of BPF and United Kingdom companies in India's sector exhibition, Plastindia.
The current bilateral deal should kick-start a new relationship from a few successful plastics industry developments, said Jeffries, managing director of Baerlocher UK Ltd. of Bury, England, the British offshoot of German plastics additives group Baerlocher GmbH.
``What we have to do with these associations is to reorientate our industries. ... Everyone is obsessed with the European Union [here], but we have got 1 billion friends [in India],'' Jeffries said.
India can offer plastics machinery suppliers ample skilled engineers for low-cost production of components or assembly, Goel said.
BPF plans to take a group of British firms to Plastindia 2006, scheduled to be held Feb. 9-14 in New Delhi.
BPF members include resin producers, distributors, additive suppliers, machinery manufacturers, plastics processors and recyclers.
