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Project Report 1 - Plastic Industry

The Indian plastics industry comprises 25,000 companies that employ 3 million people. It has an annual growth rate of 16% and plastic consumption is expected to reach 16kg per capita by 2015, up from the current rate of 8kg. The state of Gujarat has over 5,000 plastics manufacturers and is the leading processing hub. While the industry is growing, it faces challenges of labor shortages and power deficits. The demand for plastics like polypropylene and PVC is increasing at double-digit rates annually due to growth in construction and consumer goods, but domestic production only meets half of the PVC demand.

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4K views2 pages

Project Report 1 - Plastic Industry

The Indian plastics industry comprises 25,000 companies that employ 3 million people. It has an annual growth rate of 16% and plastic consumption is expected to reach 16kg per capita by 2015, up from the current rate of 8kg. The state of Gujarat has over 5,000 plastics manufacturers and is the leading processing hub. While the industry is growing, it faces challenges of labor shortages and power deficits. The demand for plastics like polypropylene and PVC is increasing at double-digit rates annually due to growth in construction and consumer goods, but domestic production only meets half of the PVC demand.

Uploaded by

Anu
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We take content rights seriously. If you suspect this is your content, claim it here.
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  • Plastic Industry in India
  • Raw Material Supply and Demand

PLASTIC INDUSTRY IN INDIA

The Indian plastics market is comprised of around 25,000 companies and employs 3
million people. The domestic capacity for polymer production was 5.72m tonnes in 2009. The
State of Gujarat in Western India is the leading plastics processing hub and accounts for the
largest number of plastics manufacturers, with over 5,000 plastics firms.

The growth rate of the Indian plastics industry is one of the highest in the world, with plastics
consumption growing at 16% per annum (compared to 10% p.a. in China and around 2.5% p.a.
in the UK). With a growing middle class (currently estimated at 50 million) and a low per capita
consumption of plastics, currently 8kg per head, this trend is likely to continue. The Plastindia
Foundation estimates that plastics consumption is likely to reach 16kg per head by 2015.

Despite India having a population of 1.15 billion and a work force of 467 million, plastics
companies have reported problems with labour shortages. This has led to increased investment
in technology such as automation and conveyor belt systems.

Apart from the shortage of a skilled labour, the plastics industry is also facing the problem of a
nationwide power deficit. The electricity demand deficit is 12-13 per cent. This provides
excellent opportunities for firms offering energy saving solutions, power saving machines and
ancillary equipment.

1
Raw Material Supply and Demand

Reliance Industries, India’s largest private sector conglomerate company, stated in January that
India’s polyolefin’s market is expected to grow 12 percent to about 7.5 million metric tons in
2011 with double-digit growth in consumption of both polypropylene and polyethylene.
Polypropelene will account for the largest growth at 18% (with consumption growing from 2.2
million metric tonnes to 2.6 million metric tonnes).

It is estimated that between 75-80% of Polypropylene demand in India is met by Reliance


Industries with around 20% coming from four Governments run companies Indian Oil
Corporation Ltd (IOCL), Haldia Petrochemicals, Bharat Petroleum Corporation LTD (BPCL)
and the Gas Authority of India Ltd (GAIL).

Partially due to the growth of the Indian construction industry (which is growing at approx. 20%
p.a.) the demand for PVC is exceptionally high with domestic production barely meeting 50% of
the demand. Again, of the domestic suppliers, Reliance is the largest followed by Chemplast and
Finoflex (with the latter two accounting for about 5% of demand).

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