Plastic manufacturers and processors urge Hon Prime Minister Narendra Modi to constitute regulatory authority to curb undue profiteering in petrochemicals industry. The industry associations have pleaded for urgent steps to save the industry on the verge of collapse
Heads of 10 leading plastics associations in the country urge Hon Prime Minister Narendra Modi for urgent help to save Plastics processing industry due to dramatic increase in Price of Raw Material (Resin) by the Raw Material Manufacturers in the country
In a letter to Honourable Prime Minister Narendra Modi, plastic manufacturers, processors represented by more than 10 associations across the country, have demanded constitution of a regulatory authority to curb the consortium, undue profiteering in the petrochemicals industry which has left the plastic manufacturing/processing industry in the lurch and is on the verge of complete collapse. The industry associations have also demanded to stop imposing anti-dumping duty, mandatory BIS standards, decrease import duty on raw material and ban/restrict export of raw material from the country to enable the plastic industry to survive and remain competitive with other countries like China.
The letter dated November 26, 2020, has been written by more than 10 associations representing the plastic manufacturing and processing industry. It has been signed by heads of the associations including Mr Chandrakant Turakhia, President, The All India Plastics Manufacturers Association; Mr. Mahendra Sanghvi,President, Organisation of Plastics Processors of India; Mr. Ramesh Kr. Rateria,President, Indian Plastics Federation, Kolkata;Mr. Shailesh Patel, President,Gujarat State Plastics Manufacturers Association; Mr. Vijay Kumar, President, Karnataka State Plastics Association;Mr. Ravi Jashnani, President, Maharashtra Plastics Manufacturers Association;Mr. Balakrishna BhatKakunje, President,Kerala Plastics Manufacturers Association; Mr. Vimalesh Gupta, President, Telangana and Andhra Plastics Manufacturers Association and Mr. B.A. Nazeer, President, Canara Plastic Manufacturers & Traders Association.
The plastics industry in India constitutes of 50,000+ plastics processing units of which 90% are MSME’s. The sector directly employs more than 50 Lakhs people and contributes more than Rs. 3 Lakhs crores to the country’s GDP.
In a letter written on November 26, 2020, Mr Chandrakant Turakhia, President, The All India Plastics Manufacturers Association has pleaded with the PM for help ‘to save the plastics processing industry which is on the verge of collapse due to the dramatic increase in price of raw material by raw material manufacturers in the country.’ To elaborate their grievances the associations have said in the letter that the prices of the raw materials like PVC, ABS, polypropylene, PC, PET have increased multifold ranging between 20 and 140% over the last five months. “The petrochemical companies are taking advantage of the surge in polymer prices by restricting the supplies to domestic processing units and releasing the material after increasing the prices on regular intervals. Unfortunately, PSUs have also joined hands with private players and are dancing to their tunes and are not serving the processing industries in a fair manner. Rationale of price increased by domestic industries are not justified as compared to international prices,” the letter has stated.
It has also mentioned that since the domestic petrochemical producers do not enter into forward contracts like overseas producers do, price play and manipulation by domestic companies become very easy. Domestic producers demand anti-dumping proceedings on select grades of polymers on which they are already charging premium due to constrained availability. Raw material manufacturers export the raw material in large quantities and create scarcity of the polymer raw materials. This has resulted in an exponential rise in price of raw material by petrochemicals companies in the last 5 months which is threatening the survival of thousands of plastics processing units in India, the letter has said.
As the result of the above-mentioned issues, the letter to the PM further states, “The industry which is already facing severe drop in the demand due to the pandemic, is further facing working capital and related financial issues owing to the exponential increase in cost of the raw material. The growing threat of increased imports of plastics intermediate and finished goods from countries like China would prove to be a disaster to your vision and plan to make India ‘Atmnirbhar’. As Indian plastics processing units have become highly uncompetitive in global market due to increase in raw material prices, export from India may take a severe hit. Indian plastic goods exporters are bound to become uncompetitive in the international market as polymer prices sare10-15% cheaper in the international market as compared to prices in India.” Said Mr. Arvind Mehta – Chairman Governing Council- The All India Plastics Manufacturers Association.
In the backdrop of the above scenario, the plastic manufacturers and processors have urged the PM to urgently constitute the Petrochemical Regulatory Authority; ensure that the PSUs like IOCL, GAIL, BPCL support the domestic processing units by serving them in a fair manner and fair pricing mechanism. The industry players have also demanded that the government should immediately stop imposing Non-tariff barriers on raw material such as anti dumping duty and mandatory BIS standards as India is import dependent and consumption of several polymers is much higher than domestic production. They have also demanded an immediate ban on export of raw material from India to ease out the supply in the country and to check the price rise. Reduce the import duty to zero on the raw material wherein India is import dependent, the letter has stated.
These 10 leading associations in the country represent more than 50,000 industries and employs 50 lakhs people. The sector directly contributes more than Rs. 3 Lakhs crore to the country’s GDP and is critical for sectors such as Agriculture, Healthcare, Food processing, Infrastructure, Electronics and Auto components
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Sr. No. Raw Material Percentage increase in last 5 months
1 PVC 64%
2 ABS 140%
3 PC 111%
4 HDPE 28%
5 LLDPE 29%
6 Polypropylene 34%
7 GPPS 43%
8 HIPS 48%
9 PPCP 34%
10 PET 22%
11 LDPE 43%
