By the numbers, the growth in India's plastics industry is impressive doubling in per capita consumption in five years and rising steadily among the world's major plastics markets.
But look past the numbers, according to one prominent Indian executive, and there are major challenges like plastic waste in the environment, lack of innovation and companies too small to really compete in world markets.
India's industry needs to change to be more competitive globally, said Anil Jain, managing director of Jain Irrigation Systems Ltd., one of the country's largest and most prominent plastics processors, in a Jan. 22 keynote speech at a conference connected to the Plastivision 2011 show in Mumbai.
Jain said he was only speaking for himself and not any broader Indian trade group.
Jalgaon, India-based Jain Irrigation claims to be No. 2 in the world in its market of drip irrigation equipment, with annual sales of $602 million, 6,500 employees and 21 factories around the world, including the U.S.
The company also was selected by the Indian government to participate in a private exhibition for U.S. President Barack Obama when he came to India in November. Obama met briefly with Jain executives and discussed the potential of their technology in increasing food supplies, conserving water and raising rural incomes.
Jain's 30-minute speech at Plastivision was wide-ranging, and he noted the many opportunities in front of India's industry as the country seems solidly in a period of high economic growth.
But he said Indian firms need to upgrade and get larger to keep up with increasing global competition, particularly from China.
A factor, which I believe does not allow the Indian industry to be globalized on par with the global entities, is lack of scale, he said. There are only a few people you can talk about in this country who are processing at a certain size which will give them benefits of scale.
The majority of Indian firms focus on the benefits of being small benefits created by government policies, he said, such as tax breaks and cheaper electric power.
We are always trying to manage these government regulations and see what benefits we get by remaining small, but that is not how we can build globally and ... create value for ourselves and our companies and associates, he said.
India's plastics industry also does not have enough cooperation between different parts of the manufacturing chain, such as raw material suppliers and processors, he said.
In our country there is a huge discord between the way raw material manufacturers look at the processors there is no partnership, he said. The growth of our industry has been very lopsided. If you see the models in the U.S. and Europe and other places, the raw materials suppliers make money, processors make money, the customers get great value.
As a result of the imbalance, he said, there is in general a very limited focus on innovation by the Indian plastics industry.
Jain, he said, tries to innovate by focusing on customer needs, which in its case is the country's small farmers.
About 750 million of India's 1.2 billion people work in agriculture, with about half of them living near the poverty line.
Jain was the first in India, more than 20 years ago, to develop the market for drip irrigation technology, which makes heavy use of plastic tubing and components to bring water directly to plants. That cuts water use and boosts crop yields by at least 30 percent compared with traditional flood irrigation, its advocates say.
Jain told Plastivision attendees that one key to innovating and staying relevant is not to think of your company as a plastics firm.
It is not important that I make thousands of components; it is not important that I process X amount of plastics, Jain said. Instead, he said, companies must pay attention to their customers' markets.
We need to totally focus and try to change the way farming is done help the farmer reduce his input costs and help him improve productivity and then create value, he said.
Helping farmers can benefit society, he said. Improving their fortunes can improve India's food and water security, which in turn will help address the chronic rural underdevelopment that feeds the country's separatist movements, he said.
You will also address the national security ... in the country due to lack of development in rural areas, Jain said.
The biggest challenge the plastics industry in India faces, though, is not economic, Jain said.
Right now the biggest threat we face as far as perception is plastics in the environment, he said. Plastics are useful in life and plastics give more value. However, the question is the utilization of plastics, the utility of the plastics, whether the plastics create problems in society. It is true we are creating some problems for society.
He said he went on vacation last year to a jungle area and found plastics packaging littering the landscape: It breaks your heart when you look at it.
India's government is taking steps on those issues, with the Ministry of Environment and Forests adopting new rules in early February to ban plastic bags less than 40 microns thick and require better waste-collection systems.
Jain said the industry needs to work with governments to control plastic waste. He urged companies to accept responsibility when appropriate. He said Jain Irrigation is working on biodegradable plastic tubing that will not sit as potential waste in fields when its working life is over.
We are always saying we are not responsible, Jain said. As the gun makers say, 'I am not responsible for making the gun. It is the bullet that kills the man, not the gun which kills the man.' Or it is the man who is carrying the gun who kills the man, not the gun?
That argument can only take you so far and not beyond, he said.