DHARAVI, INDIA — Low oil prices are giving a nice boost to India's plastics industry, with one big exception — the country's plastics recyclers.
Judging from a recent visit to Dharavi, one of the centers of plastics recycling in the country, falling oil prices have sent the price of recycled plastic tumbling down 50 percent and shut down many local companies.
Dharavi is probably best known outside India as the setting for the 2008 movie “Slumdog Millionaire.” Located in Mumbai, it has several hundred thousand residents and is considered one of Asia's largest and most densely-populated slums.
It's also home to more than 1,000 small-scale plastics recycling companies that employ an estimated 10,000 people.
They're not recycling companies as you find them in North America, though — the work of sorting and cleaning waste plastic is all done manually, in difficult conditions, with workers earning $100 to $300 a month for more than 70 hours of work each week.
Dharavi has a world-wide reputation in recycling. A Google search of plastic and Dharavi turns up many references.
But its future as a major recycling hub could be in question, because of those low oil prices and more permanent challenges like high electricity costs and a shortage of space for factories, according to interviews Plastics News had during a mid-February visit.
Even before oil prices dropped, companies were struggling with high power prices and a lack of space to make their factories more viable, said Hariram Tanwar, general secretary of the All Plastic Recyclers Association in Dharavi, which formed 18 months ago to advocate for industry.
APRA President Ladulal Jain, for example, said power costs in Dharavi are four times higher than in Silvassa, an industrial area 120 miles north of Mumbai. That prompted his company to open a recycling factory there.
Electricity costs in Dharavi, which sits in central Mumbai, have been rising for the last five years, APRA said.
The low oil prices have meant the loss of thousands of jobs, at least temporarily, in Dharavi's recycling companies, Tanwar said.
At one point during the interview, Jain sounded pessimistic about the future of local recyclers.
“Because of all these facts, most probably it will finish it off, it will die,” said Jain, speaking through an interpreter in an interview at APRA's small office. “Because of less land and because of high power prices.”
But the association leaders said they have some hope — APRA recently submitted a detailed proposal to the local government asking it to create a recycling zone, including setting aside land for companies and providing tax breaks and cheaper electricity.
That kind of support is needed because the industry in effect performs a public service, helping to keep Mumbai cleaner and collecting what would otherwise be litter on the streets, Tanwar said.
“We want to get recognized as proper recyclers,” Tanwar said, speaking through an interpreter.
During a walking tour and interview conducted by APRA, association officials pointed out companies recycling all kinds of plastics, including bottles, food containers, computer parts and housings for big items like TVs and air conditioners.
Working conditions were tough. In one small factory, eight workers squatted around boxes, hand separating different kinds of waste plastics. They said they worked 12 hours a day, six days a week, plus a half day on the seventh day.
Hygiene is sometimes poor. In one small room with an open door facing the narrow street, a few workers sorted through plastic from food waste as flies buzzed around the piles of discarded plastic plates, cups and clamshell containers nearby.
Much of the work was done by hand. Employees dunk buckets of waste plastic in water bins to wash it and break down large pieces by hand, or in one case, hacking garbage bins with a machete.
Material testing often consists of burning the plastic to smell it and, workers said, letting trained noses identify the specific polymer.
“Conditions are poor, unhygienic, and people are working in unsafe conditions,” said Vinod Shetty, director of the Mumbai office of Acorn International, an NGO which has one project advocating for workers in India's recycling industry.
“Workers are handling contaminated materials, they are exposed to a lot of bacteria, a lot of diseases,” he said, in a telephone interview with Plastics News.