Recently, Bipin Shah, vice president of Plastics India, said that by 2012, the country's polymer consumption will reach 10 million tons, equivalent to 20 Kg per capita consumption. At present, India's per capita polymer consumption is only 7.2Kg.
India's national economy is growing at a rate of about 9% per annum. India's plastics industry's compound annual growth rate (CAGR) has reached 15%, and the growth rate is very impressive. Luo Baihui, head of the International Mould and Hardware & Plastic Industry Suppliers Association, believes that if this growth rate of the plastics industry continues, India will become the third largest consumer of polymers in the world after the United States and China in 2012.
Take measures to promote the continuous growth of the plastics industry
The government will introduce a series of reform measures to promote the growth of the plastics industry, such as the establishment of special plastics production and processing industry clusters throughout the country, through the establishment of special economic zones (SEZs) to overcome bottlenecks in infrastructure, and create a business environment conducive to business. In addition, India also plans to invest US$36 million in the domestic construction of polymer upstream industries to cater to the growing demand of India's plastics processing industry. Driven by huge capital and infrastructure investment, transportation and agricultural demand, the Indian plastics industry will continue to maintain a growth rate of over 10% in the coming years.
In agriculture, India’s demand for plastics is expected to exceed 25 million tons in 2013. Another area that is full of vitality is the packaging industry. The current proportion of packaging applications is 35 million tons. By 2020, this figure will increase to 90 million tons. In addition, the automotive industry is also a major driving force for plastic growth. Currently, it is growing at an annual rate of over 18%. Industry insiders estimate that the market value is worth 8 billion U.S. dollars. The world's major automakers are already in action.
To cater to this growing demand, Plastics India plans to establish a disciplinary center in both Dungara and Gujarat, provide specialized education and training for practitioners, and develop plastics R&D centers.
Plastic Enterprises Upgrading to Meet Global Competition
India's small and medium-sized plastic manufacturers are upgrading and strive to gain global competitiveness in the next two to three years, and strive to keep pace with large international plastics companies.
Under the protection of strong domestic demand, the Indian plastics industry has weathered the global economic crisis. Even so, changes have taken place within the industry as a whole, which will help Indian plastics suppliers become fully capable transnational corporations, especially in the extremely flexible trading environment brought about by bilateral and multilateral free trade agreements.
The Indian government intervened promptly last year to provide credit support for various industries during the global financial crisis. This move has effectively mitigated the adverse effects of the global credit crisis. The Indian plastics industry has also taken steps to optimize industry resources, increase productivity and improve supply chain management to better confront the challenges posed by the recession.
Family-owned Indian small-scale processing companies have begun to integrate operations. They know that if they do not do so, globalization and the tide of competition without borders will make them be eliminated in international trade. In the context of globalization, the business environment is changing rapidly. This forced the Indian plastics industry to shake off its traditional SME operations and gain global competitiveness through the development of economies of scale. To achieve this goal, we must establish a sound system, adapt to international practices, attract talents, and establish the competitiveness of the entire industry.
Sitting on a huge domestic market is undoubtedly an advantage, but it is not enough to be confined to the domestic market. Indian companies must take a long-term view and aim at a more promising international market.
All types of free trade agreements have benefited India's many industry sectors, and the plastics industry is no exception.
In terms of technical capabilities, Indian plastics companies are ready to meet global competition. They are catching up on technology and are almost equal to Western counterparts, mainly in the field of machine manufacturing.
Indian machinery manufacturers have the ability to work with multinational suppliers to provide lower-cost machine production to help meet domestic demand. Such cooperation is beneficial to Indian and Western plastics machinery manufacturers. However, the Indian plastics industry lacks the first-class quality production process. It is necessary for local companies to set benchmarks against the best companies in the industry in order to calmly deal with future challenges.