Government of IndiaMinistry of MSMEIndustrial Climate of Plastic Sector2015-16Prepared byMSME-DEVELOPMENT INSTITUTEMinistry of MSME, Govt of IndiaNarsapur Cross Roads, Balanagar, Hyderabad-500 037Ph: 040-2307 8131, 132, 133, Telefax: 040-2307 8857Email: email@example.comWebsite: http://msmehyd.ap.nic.in
Industrial Climate on Plastic Industries in A.P. & Telangana StatesThe economic reforms initiated in 1991 brought major changes in the structure ofthe domestic petrochemical industry. De-licensing and deregulation allowed the marketforces to determine growth and investment. Liberalisation of trade policies and lowering oftariffs enabled the domestic industry to compete with the global petrochemicals industry.As a result, major international companies from various sectors such as automobiles,electronics, telecommunications, food processing, packing, healthcare etc. have set up largemanufacturing bases in India. Joint ventures, foreign investments, easier access totechnology from developed countries have opened up new vistas to further facilitate thegrowth of this industry.The Indian Plastic industry is about 0.5% of India's GDP. The export of plasticproducts also yields about 1% of the country's exports. The sector has a large presence ofsmall scale companies in the industry, which account for more than 50% turnover of theindustry and provides employment to an estimated 0.4 million people in the country.Approximately Rs.100 billion is invested in the form of fixed assets in the plastic processingindustry.As of now the Indian Plastic industry has enormous potential for growth as polymeruse in India is far below the world level. With increasing competition in the global marketand the constant drive to improve our living standards, the scope for use of plastics is boundto increase manifold and make the production double in the coming years.India’s plastics industry has tremendous potential to add muscle to the nation’seconomic development. A bird’s-eye view reveals some encouraging facts - India ispresently the third largest consumer of polymers in the world after the US and China, with a6 percent global share. The industry employs about 40 lakh people directly and indirectlyand has more than 30,000 processing entities.(Consumption of Plastics in Different Segments)
Consumer ProductsInfrastructureAutomobile IndustryAgricultureHealthcareTelecomNew & Renewable EnergyOther minor sectors including water management, electronics, defence andaerospace, computers and power transmissions.Various sectors such as agriculture, packaging, automobiles, electronics, telecom,healthcare, infrastructure, transportation and consumer durables, have been major driversof growth in plastic consumption.A large investment in telecom, ports, roads, power, and railways, has ensured thatthis sector continues to grow at more than 10% p.a., for several years to come. The focus onplastic-culture in the agricultural sector – envisaged coverage of 17 mn hectares undermicro-irrigation schemes, will further boost the prospects of the plastics industry. Theplastics processing industry is a source of great potential for global businesses. There istremendous scope for innovative technological upgradations and thus rapid growth of thesector.The plastic industry chain can be classified into two primary segments, viz., theupstream which is the manufacturing of polymers and the downstream which is theconversion of polymers into plastic articles. The upstream polymer manufacturers havecommissioned globally competitive size plants with imported state-of-art technology fromthe world leaders. The upstream petrochemicals industries have also witnessedconsolidation to remain globally competitive.The downstream plastic processing industry is highly fragmented and consists ofmicro, small and medium units. Presently, 75% are in the small-scale sector. The small-scalesector, however, accounts for only about 25% of polymer consumption. The industry alsoconsumes recycled plastic, which constitutes about 30% of total consumption.Plastic processed articles which were earlier exclusively reserved for small scalesector has now been de-reserved. The micro small and medium enterprise (MSME) act 2006increased the investment in plant and machinery to Rs 5 crore and the current exemptionon excise duty is Rs 1 crore. This initiative helped the industry to increase competitivenessand meet the global challenges.The domestic downstream industry comprises of three broad segments viz. injectionmoulding, blow moulding and extrusion and caters to the requirements of a wide array ofapplications like packaging, automobile, consumer durables, healthcare, etc
Classification of plastic products by type of process usedFilms and Sheets, Fibre and Filaments Pipes, Conduits and ProductsInjectionMouldingIndustrial Injection Moulding, Household Injection Moulding andThermo-ware/ MouldedluggageBlowMouldingBottles, containers, Toys and HousewaresRotomouldingLarge circular tanks such as water tanksPolymer Consumption in India according to various processesProcess(%) Share in Total consumptionin IndiaExtrusion60Injection Moulding25Blow Moulding / StretchMoulding6Rotomoulding1OtherProcesses8
No of Machines InstalledPOPipes1% PPTQPVC PipesFilm4%Others2%Raffia7%Multilayer ctionMoulding50%BlowMoulding6%Installed Capacity in KT InjectionPVC Pipes11%PO Pipes3%PPTQFilmRaffia1% 40%MultilayerFilmMonolayerBOPP2%Film1%3%STATE SCENARIO: Telangana & Andhra PradeshThe South India that too Hyderabad, identified has great growth potentiality forplastic industry. Presently, there are about 8,000 plastic units in Andhra Pradesh andTelangana states, of which over 6,000 located in and around Hyderabad city with a turnoverof Rs. 600 Crores. It is expected to have growth potentiality of about 20 per cent per year.South India's business potential is put at US 2.6 billion. The projected consumption ofplastic is put at 2.5 million per annum. The growth of polymer consumption is 18-20 percent in Telangana and Andhra Pradesh states alone. The present processing capacities is putat 1.2 million Tonnes per annum and there is a scope for additional processing capacity of1.3 million Tonnes per annum. That shows almost more than double of the present capacityThe positive market indicators of South India are it is growing faster than India. Allmajor automobile manufacturing companies are based here. Even their ancillary units –auto components manufacturers are also located here. Creation of a new industrial corridor– Chennai – Bangalore, abundant capacities of new Petrochemical and Polymer can befound in South India only.Discussion with different representatives of the plastic products manufactureassociation reveals that there is good growth of plastic industry in the State amidstchallenges faced by them. Details of the fact about plastic sector are given as under:
1.No. of existing units manufacturing Plasticproducts aboutMicro – 28%; Small-55%; Medium-15%; Large-2%2. Total production capacity about3. Film/sheets, Bags and thermo formed articles andother extruded items4. Bottloes, containers and other Blow mouldeditems5. Household/domestic injection moulded articles6. Pipes, profiles etc.7. Furniture, baskets, automobile industrial parts8. Electrical appliances, parts coated wires, cablesetc. & miscellaneous items9Sales –IndigenousExport10. Plastics goods are consumed by packagingindustry11. Average growth12. Sickness of plastic industry is:6000::9 lakh MTS per %5%About 45%::30 – 40% per annumAbout 2 to 5%Hundred percent growths of Plastic industries have been noted in the past 15 years,mostly because of growth of Packaging Industry.Challenges:1. Competition from China. China is providing power subsidy and good encouragementby the Government. Plastic articles are being imported at lower cost.2. Continuous supply of quality power to plastic industry is needed because power issecond raw material/consumable after plastic granules.3. There is lack of R&D in Plastic industry, modernisation/technology upgradation isneeded for plastic industry.4. Plastic parks may be established in the State.5. Favourable policy may be framed making better conducive environment for thegrowth of plastic industries in cluster.6. Acute shortage of availability of skilled personnel i n plastic industry.7. Encouragement for the export is needed by the GovernmentPlastic industries develop co-industries such as Printing units, Reprocessing industry,Manufacture of Master batches, Pigments, Repairs and maintenance industries, mould, jigs& fixture manufacturing industry and so on. Thus, the development of more number ofplastic industries develops ancillary industry also.Conclusion: Hence, favourable climate for growth of Plastic Industry in A.P. and Telanganain spite of challenges present.
Government of India Ministry of MSME Industrial Climate of Plastic Sector 2015-16 Prepared by MSME-DEVELOPMENT INSTITUTE Ministry of MSME, Govt of India
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