Trade body trumpets commercial opportunities in Indian plastic sector

Packaging accounts for almost a quarter of all plastic consumption in the sub-continent, said the trade association, as it laid out a raft of growth forecasts across the sector that it believes offers exciting potential business prospects for foreign players.

The Indian Government has highlighted the need for foreign investment to bring in new technology such as cold chain logistics systems, warehousing facilities and packaging technology.

“This will assist in in improving the rate at which food perishes before it reaches market – currently at around 40% per annum,”​ said the report. "This issues offer huge opportunities for plastics packaging manufacturers wishing to enter the market." ​

India has also hinted that the country was set to lift foreign direct investment (FDI) restrictions for supermarket giants such as Tesco and Walmart - which currently has just six stores in the country. Such a move would also provide a huge push towards supply and demand of processed foods, and its packaging.

Overview​

Indian plastic capacity currently stands at 5.72m tonnes, with 25,000 companies employing three million workers. The leading plastics processing hub, Gujurat in Western India, has over 5,000 plastics firms, said the research.

At 16 per cent per annum, plastic growth in India is outstripping China – at 10 per cent - and dwarf’s the UK’s 2.5 per cent.

India’s growing middle class and a current low consumption rate of 8kg per head means this trend is set to continue, said BPF, citing the Plastindia Foundation estimate that consumption is likely to reach 16kg per head by 2015.

Persistent staff shortage – despite India’s huge population – has seen a growing trend in investment in technology such as automation and conveyor belt systems as companies, said the UK trade body.

This, along with a long-standing power shortages, provides excellent opportunities for firms offering energy saving solutions, power saving machines and ancillary equipment, it added.

Plastic technologies in the country are dominated by injection moulding and extrusion which account for almost 90 per cent of the total.

India’s polyolefins market is expected to grow 12 per cent to about 7.5m metric tons in 2011 with double-digit growth in consumption of both polypropylene and polyethylene, said Reliance Industries, the country’s largest private sector conglomerate in India.

Polypropelene will account for the largest growth at 18% (with consumption growing from 2.2 million metric tonnes to 2.6 million metric tonnes).

BPF estimated that between 75-80 per cent of polypropylene demand in India is met by Reliance Industries with around 20 per cent coming from four Government run companies Indian Oil Corporation Ltd (IOCL), Haldia Petrochemicals, Bharat Petroleum Corporation LTD (BPCL) and the Gas Authority of India Ltd (GAIL).

The BPF is urging plastic companies to explore the Indian market through attendance at the trade show Plastindia 2012, which takes place in New Delhi from 1-6 February 2012.