The India that Plastics News saw during the Plastindia 2006 trade show was a place of emerging change and great contradictions, socially and in the plastics industry.
Spending 10 days in New Delhi provided me with an eye-opening introduction to this nation of more than a billion people. The toughest impression I took away from the trip, my first to Asia, was that we in the United States have no idea how high our standard of living is. No idea whatsoever. What many of us envision as poverty is miles distant from certain living conditions we saw during our brief visit to one of India's most developed regions.
Yet at the same time, there were more than 1,000 exhibitors at the show — and more requests for exhibition space than space available, leading to some exhibitors being housed in large tents next to the halls.
Let's say that, essentially, it's going to be difficult not to make money in plastics in India for at least the next decade.
India's middle-class population today is between 300 million and 500 million people — compared with a total U.S. population of just under 300 million. And an estimated 300 million Indians today live in poverty — Indian poverty, not Western-world poverty. During the next 10 years, the Indian government hopes to move about 100 million of this group into the middle class. (Being middle class in India is defined as making more than 150 rupees, or about $4, a day.)
Think about what those numbers mean: possibly 100 million new customers, people who had been living meal-to-meal but now have a little money to spend. If just half of that goal is met … consider what any North American firm would do to gain 50 million new customers.
Take the case of Sunrise Containers Ltd., a Mumbai, India-based blow molder. The firm makes PET pharmaceutical containers and preforms. In the first six weeks of 2006, Sunrise doubled its number of production plants to six. If a population that cannot afford health care suddenly can afford health care, however minimal, how many pill bottles will be needed? Tens of millions? Hundreds of millions?
Add to that the fact that India's primary resin supplier, Reliance Industries Ltd. of Mumbai, is viewed by many as a great benefactor — one show-goer described it as the General Motors of the U.S. in the 1950s — and it makes the Indian plastics movement even more convincing. Basic conversions to plastic from glass, metal and wood are ongoing. The nation is a messy network of 15,000-20,000 mostly small processors, but Reliance somehow makes it all work.
Messy, unfortunately, is a word that applies to many aspects of Indian life, especially when observed from a Western perspective. Americans simply aren't used to seeing children forage through garbage or being approached by beggars holding infants, especially not while attending an international trade show. I have to believe — and hope — that conditions there are better now than they were 10 years ago, but it's still hard to comprehend.
There again lie more contradictions. Gleaming new hotels, office buildings and restaurants are being built. Most of the people are friendly. The food is tantalizing. The ease with which English speakers can communicate — a legacy of India's days as a British colony — is a big advantage.
Can the whole thing fall apart in spite of an economic growth rate of 8 percent? The odds seem to be against a meltdown.
The media spotlight has fallen on India in recent weeks: as the hot topic of the World Economic Forum in Davos, Switzerland; as a cover story in Newsweek; as visited by President Bush. And it's clear the country's population is getting a taste of modern living and wants more.
However, for international plastics and chemical firms, as well as the nation's own processors, doing business in India appears to be a matter of living with paradox.
Frank Esposito is an Akron-based staff reporter for Plastics News.