Plastic Industry



With the plastics industry growing at a 10% of CAGR, the plastics industry is one of the intermediary sectors and is related to sectors like Automotive, construction, electronics, healthcare, textiles and FMCG etc. The consumption pattern of plastic products in India is focused on western India and northern India that account for 70% of the total demand. Due to the push by the government in domestic manufacturing, focus on the plastic industry has increased with more states like Rajasthan Punjab and Haryana realizing high growth rates in the plastic processing sector.

The per capita plastic products consumption of India (9.7kgs) is far lesser than other developed countries like USA and Europe. With a Polymer utilization rate of only 2% in the agriculture sector in comparison to the global average at 8%, the opportunities for growth in this particular sector are a lot. In the plastics industry, polymers are of various types that can be broadly categorized into the following categories:



Buy Industry Analysis


With an approximate 10 MnTPA (million tons per annum) production capacity in 2014-15, the plastics industry has grown at a sub 7% growth rate in past few years. Among the processes applied by the industry, Extrusion is used most commonly and accounts for more than 60% of the total consumption by downstream plastic companies. Injection moulding is also used which is popular and thus have a 26% market share.



The capacity of Indian companies of PE polymer is 3.4 MnTPA and looking into some of the environmental issues that the industry faces now, recycling is a good solution to ensure sustainability and bring in innovation into the industry. The number of organized recycling units in the industry is 3,000 and about 5,000 in the unorganized sector. The flowchart for such processing in the industry would be:



India has a significant production capacity in plastics with majors like ABS India, RIL, Haldia Petrochemicals and Indian Oil Corporation, with Polyethylene (PE) having the most amount of demand and market share. Even with a high total Production capacity, they are highly under-utilized with an efficiency of only 60-80%. This also leads to an unmet domestic demand that is then catered to by imports, resultant to which India has an overall deficit in imp-ex of Plastics. The impetus and increased demand of feedstock availability in the northern parts of India, companies have stepped up their investment in downstream plastic processing. The increase in the per capita income will induce higher consumption that will boost demand for plastic in the coming years thus making the industry capacity to 15MnTPA by 2020.

States in the northern India and states such as Bihar and Jharkhand are places where there is a huge potential for growth because of lack of plastic processing industries. The players in this industry are varied in their market capitalization and focus mainly on a certain type of polymer to introduce cost effectiveness and economies of scale.


Future Potential

Taking into consideration the high demand, low production efficiency, and high number of opportunities available in the Indian market, it is certainly an avenue for companies to invest and gain returns. Some of the concerns regarding the environmental hazards need to be catered to and companies should focus on the introduction of better technology to increases cost efficiency specifically in the field of automatic blow moulding machines, multilayer blow moulding, and stretch/blow moulding machines for projects involving high CAPEX like PVC calendaring, multilayer film plants for barrier films, etc. In the “Gujarat’s Industrial Policy 2015”, the state government has stated the plastics industry to be one of its focus sector and announced a seven per cent assistance of up to INR 1 Crore, on the loan interest for five years. The government also looks to refund 70 per cent of the net tax paid by these units for five years.


What this report contains:

  • A detailed overview of the industry

  • Structure of the industry from both, domestic and international perspectives

  • Related industries that this industry has inter-dependencies with and their understanding

  • Detailed analysis of industry segments in terms of the value and depth of corresponding market

  • Analysis & insights about the elements and critical success factors of this industry using strategic models

  • A forecast on the state of this industry in 2020, predicting the growth and movement patterns for 2016 - 2020

  • Our professional analysis on the future of the industry based on strategic actions adopted by major industry participants

  • Quantitative estimates and forecasts of the growth prospects of the industry using revenue and financial forecasting models

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