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To be the thought leader for industry, its voice for policy change and its
guardian for effective implementation.
About FICCI
Our Mission
Established in 1927, FICCI is one of the largest and oldest apex business
organizations in India. FICCI's history is closely interwoven with India's
struggle for independence, industrialization and emergence as one of the
most rapidly growing global economies. FICCI has contributed to this
historical process by encouraging debate, articulating the private sector's
views and influencing policy.
FICCI draws its membership from the corporate sector, both private and
public, including MNCs; FICCI enjoys direct and indirect membership of over
2,50,000 companies from various regional chambers of commerce and
through its 70 industry association.
Federation of
Indian Chambers
of Commerce and Industry
E [email protected] [email protected]
www.ficci.com
Sidharth Birla
President
A report on
Plastics Industry
Federation of
Indian Chambers
of Commerce and Industry
E [email protected] [email protected]
www.ficci.com
Sidharth Birla
President
A report on
Plastics Industry
CONTENT
I.
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 03
II.
Intr
odu
ctio
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V.
Plastics applications in Food
Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2. Technology needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
3. Price pressure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
IX.
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 29
X.
Refe
renc
es .
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XI.
Abo
ut
Tata
Stra
tegi
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About
FICCI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
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CONTENT
I.
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 03
II.
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 05
III.
Plas
tic
indu
stry
in
Indi
a..
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. 07
V.
Plastics applications in Food
Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2. Technology needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
3. Price pressure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
IX.
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 29
X.
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 31
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Tata
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tact
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Abo
ut
FICCI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
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Table of
Figures
application, FY13 . . . . . . . .
..................6
Figure 3 : Demand growth
of plastics ('000 TPA),
CAGR, FY0813 . . . . . . . . . . . . . 8
Figure 4 : Demand breakup
of plastics by types,
FY13 . . . . . . . . . . . . . . . . .
. . . . . . 8 Figure 5 : India Region wise plastic
consumption,
2013 . . . . . . . . . . . . . . . . .
. . . 10 Figure 6 : Indicative
list of some end use
industries in Northern India
. . . . . . . . . 10 Figure 7 :
Production Capacity and
Operating efficiency of
plastics, FY13 . . . . . . . 11
Figure 8 : Plastic
production capacities in
Northern India . . . . . . . . . .
. . . . . . . . . 13 Figure 9 :
Demand-supply scenario of
plastics, FY13. . . . . . . . . . .
. . . . . . . . . . . . . 14 Figure
10 : Import-export scenario
of plastics (in KT),
Fy13 . . . . . . . . . . . . . . . . . .
. 15 Figure 11 : Exports of
value added plastic
products (Bn
USD). . . . . . . . . . . . . . .
. . 15 Figure 12 :
Product wise breakup
of plastic product
exports in 201213 . . . . . . . . . 16
Figure 13 : Potential
growth in AgricultureGDP (in Rs. Cr.) through
. . . . . . . . . . . 20
Plasticulture, FY13
Figure 14 : Food
processing segments
(%
share). . . . . . . . . . . . . .
. . . . . . . . . . . . . . 21
Figure 15 : Growth
projections for food
processing sector (USD
billion) . . . . . . . . 21
Figure 16 : Plastics in
flexible packaging (%
share) . . . . . . . . . . . . .
. . . . . . . . . . . . . 22
Figure 17 : Indian
packaging industry
growth projection (USD
billion). . . . . . . . . . 22
Figure 18 : Plastic
recycling flow
diagram . . . . . . . . . . . .
...................
. . 27
players, FY13 . . . . . . . . . . .
. . . 12 Table 3 : Major
Plasticulture
Applications . . . . . . . . . . . .
....................
17 Table 4 : Polymers used
in Plasticulture applications
......................
. 18 Table 5 : Region
specific agriculture issues .
......................
. . . . . . . . 19 Table 6 :
Potential benefits from
Plasticulture applications . .
. . . . . . . . . . . . . . . . 19
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Preface
Manish Panchal
Charu Kapoor
P S Singh
Practice Head - Chemical & Energy
Principal - Chemicals
Head- Chemicals & Petrochemicals
Table 1 : Classification
of plastic products by
type of process. . . . . . .
. . . . . . . . . . 9 Table 2 :
Production Capacity of
plastics by major
[email protected]
[email protected]
Federation of Indian
Chambers of Commerce &
Industry (FICCI) & TATA
Strategic Management
Group (TSMG) have been
regularly tracking the
petrochemicals industry
and supporting companies,
both big and small, across
various chains to achieve
business excellence. The
same knowledge and
experience gives us an
additional advantage to
realize this report.
Accelerated globalization,
rapid change in
technology and growing
consumerism have
brought with it sweeping
changes and abundant
opportunities for
petrochemical companies
to grow locally and
globally. Significant
investments are coming
up in India in this sector
in the next few years. For
example, Reliance is
planning to invest USD 8
billion over next four
years in petrochemical
projects. Indian Oil is
investing USD 1.3 billion
in setting up
petrochemical complex at
Paradip refinery. Besides
these, four PCPIR's are
under various stages of
development which will
further improve the
petrochemical landscape
in India. In addition, low
plastics consumption (per
capita basis) in India
compared to many
01
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Preface
Manish Panchal
Charu Kapoor
P S Singh
Practice Head - Chemical & Energy
Principal - Chemicals
Head- Chemicals & Petrochemicals
Tata Strategic Management Group
Tata Strategic Management Group
FICCI
[email protected]
[email protected]
[email protected]
Federation of Indian Chambers of Commerce & Industry (FICCI) & TATA Strategic Management
Group (TSMG) have been regularly tracking the petrochemicals industry and supporting
companies, both big and small, across various chains to achieve business excellence. The same
knowledge and experience gives us an additional advantage to realize this report.
Historically, major percentage of the population in northern India has been engaged in
agriculture. Though the land is very fertile and supplied with abundant water, the farmers
are still affected with the problems of low productivity and low return on investment
primarily due to heavy dependence on monsoons. Going forward, plasticulture applications
has the potential to offer them the much needed solutions to improve productivity and
reduce dependence on monsoons and therefore will drive demand for plastics.
As per industry estimates, 35-40% of the food products produced in India are wasted due to
deficient infrastructure and lack of food processing capabilities. Plastics find applications in
packaging which protects the longevity and quality of food. This sector in India also offers
significant potential for growth leading to increase in demand for plastics.
We sincerely thank all industry leaders whose valuable inputs have helped in developing this
report. As always it was an insightful experience for the team to materialize this report. We
hope it acts as a guiding light both for the players and the consumers of plastics.
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01
1
Executive Summary
Pand growth of various key sectors in the country such as: Automotive, Construction,
Electronics, Healthcare, Textiles, and FMCG etc. Its demand has been growing rapidly at
~10% CAGR to reach 10 MnTPA by FY13. India is currently net
Northern India is said to have an inherent disadvantage of being away from ports
hence a difficult target for low cost supply of plastics through import. However this
same situation makes the domestic plastic processing more competitive and
provides significant opportunity. Current low levels of per capita consumption (9.7
Kgs) along with increased growth in end use industries could propel the growth of
plastics in North India further. Plastics application in agriculture can also lead to huge
monetary benefits as well as improve the overall productivity. Besides Plasticulture
can also be a good answer to the falling water table in North India. Additionally, full
potential of plastics in food processing is yet to be tapped and that can help in
meeting the food and nutrition security of the nation.
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03
1
Executive Summary
Pand growth of various key sectors in the country such as: Automotive, Construction,
Electronics, Healthcare, Textiles, and FMCG etc. Its demand has been growing rapidly at
~10% CAGR to reach 10 MnTPA by FY13. India is currently net
Northern India is said to have an inherent disadvantage of being away from ports
hence a difficult target for low cost supply of plastics through import. However this
same situation makes the domestic plastic processing more competitive and
provides significant opportunity. Current low levels of per capita consumption (9.7
Kgs) along with increased growth in end use industries could propel the growth of
plastics in North India further. Plastics application in agriculture can also lead to huge
monetary benefits as well as improve the overall productivity. Besides Plasticulture
can also be a good answer to the falling water table in North India. Additionally, full
potential of plastics in food processing is yet to be tapped and that can help in
meeting the food and nutrition security of the nation.
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2
Introducti
on
he chemical industry is
critical for the economic
development of any
country.
petrochemicals. Current
low per capita
consumption level of
plastic products as
compared to developed
countries per capita
consumption suggests
that India offers a huge
opportunity over long
term (Refer Figure 1).
109
65
45
Petrochemical products
permeate the entire
spectrum of daily use
items and cover almost
every sphere of life like
clothing, housing,
construction, furniture,
automobiles, household
items, agriculture,
horticulture, irrigation,
packaging, medical
appliances, electronics
and electrical etc. These
industries hence drive the
demand growth of
32
9.7
USA
Europe
China
India
Brazil
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2
Introduction
TIndian chemical sector accounts for ~13% of the gross value added by the industries
segment. With Asia's increasing contribution to the global chemical industry, India emerges
as one of the focus destinations for chemical companies worldwide. Chemical industry is
critical for the economic development of any country
The chemical industry in India currently stands at ~USD 115 Bn in FY13 and is
expected to grow at ~8% p.a. over the next 5 years. Indian petrochemical industry
which includes the end products like polymers, synthetic fibers, surfactants etc.
constitute ~20% i.e. ~USD 23 Bn market.
Petrochemical products permeate the entire spectrum of daily use items and cover
almost every sphere of life like clothing, housing, construction, furniture,
automobiles, household items, agriculture, horticulture, irrigation, packaging,
medical appliances, electronics and electrical etc. These industries hence drive the
demand growth of petrochemicals. Current low per capita consumption level of
plastic products as compared to developed countries per capita consumption
suggests that India offers a huge opportunity over long term (Refer Figure 1).
109
65
45
32
9.7
USA
Europe
China
India
Brazil
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compared to global
standards. However,
agriculture sector still
hasn't explored the
benefits of plastics to a
large extent. Global
average for plastics
demand in agriculture is
~8% while India is
substantially lower at
only 2%.
Figure 2: Polymer
utilization by
application, Fy13
consumption in India
43%
Global average
India
Substantially lower
35%
25%
21%
17%
16%
18%
15%
8%
2%
Packaging
Infrastructure
Auto
Others
Agriculture
3
Plastic
industry
in India
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broadly categorized as
commodity, engineering
and specialty plastics.
1) Demand overview
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3
Plastic industry
in India
wide variety of plastics raw materials are produced to meet the material
Aneeds of different sectors of the economy. These polymeric materials are broadly
categorized as commodity, engineering and specialty plastics.
Commodity plastics are the major products that account for bulk of the plastics and in
turn for petrochemical industry. Commodity plastics comprise of Polyethylene (PE),
Polypropylene (PP), Polyvinyl Chloride (PVC) and Polystyrene. While engineering and
specialty plastics are plastics that exhibit superior mechanical and thermal properties
in a wide range of conditions over and above more commonly used commodity plastics
and are used for specific purpose. These include styrene derivatives (PS/EPS &
SAN/ABS), polycarbonate, poly methyl methacrylate, polycarbonates, poly oxy
methylene (POM) plastics etc.
There are three broad types of PE, viz: Low-density Polyethylene (LDPE), High-density
Polyethylene (HDPE) and Linear Low-density Polyethylene (LLDPE). Major plastic
materials like PE and PP are derived from Ethylene and Propylene respectively, while
other plastics such as PVC, PS & ABS and PC are produced from benzene, butadiene
and other feedstock.
1) Demand overview
Plastics industry is one of the fastest growing industries in India. It has expanded at
~8% CAGR over the last five years to reach ~8.5 MnTPA (million tonnes per annum) in
FY13 from ~6 MnTPA in FY08. (Refer Figure 3).
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9000
7%
8,456
3%
5,824
7500
6000
8%
2%
1500
10%
4500
3000
FY13
PVC
Polypropylene
HDPE
Polyestyrene
Figure 4: Demand
breakup of plastics by
types, Fy13
Others
LDPE PS 3%
Others
Source: Chemicals & Petrochemical Statistics, Analysis by Tata
Strategic
2%
5%
PVC 28%
LLDPE 18%
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To manufacture finished
products, polymers are
processed through various
types of techniques
namely extrusion, injection
moulding, blow moulding
and roto moulding. Various
products manufactured
through these processes
are highlighted in the
following table (Refer Table
1)
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Table 1: Classification
of plastic products by
type of process
Plastics Industry
Extrusion
Films and Sheets, Fibre and Filaments
Pipes, Conduits and profiles,
Miscellaneous applications
Injection moulding
Industrial Injection Moulding, Household
Injection Moulding and Thermo-
Plastic
Roto moulding
ware/ Moulded luggage
products
Source: CIPET
Blow moulding
Bottles, containers, Toys and Housewares
1.1 Scenario in
Northern India
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Polyethylene (PE), which includes HDPE, LLDPE and LDPE (High Density PE, Low
Density PE and Linear Low density PE), accounts for the largest share i.e., 43% of
total consumption, while PP accounts for 24% of total consumption. Within PE, HDPE
is observing a moderate growth and has a consumption share of 20%. LLDPE is
expected to grow at higher pace due to its increased penetration in LLDPE
applications. Others include PS/EPS, ABS and engineering plastics.
Extrusion
Films and Sheets, Fibre and Filaments Pipes, Conduits and profiles,
Miscellaneous applications
Injection moulding
Industrial Injection Moulding, Household Injection Moulding and Thermo-
Plastic
products
Blow moulding
Bottles, containers, Toys and Housewares
Roto moulding
Large circular tanks such as water tanks
Source: CIPET
Extrusion process is the most commonly used process in India and accounts for
~60% of total consumption by downstream plastic processing industries. Injection
moulding is the other popular process accounting for ~25% of the consumption.
Blow moulding is used for ~ 5% while Rotomoulding 1% while the rest of the plastic
is processed through other processes.
Western India has traditionally been the largest consumer of plastics accounting for
almost 47% of the total consumption. The region wise distribution of consumption is
given in Figure 5.
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Eastern region, 9%
region, 23%
downstream plastic
processing units.
Figure 6: Indicative
list of some end use
industries in
Northern India
The upcoming
petrochemical complex at
Barmer can also spurt the
sector in the
region.
The consumption in
Northern India is low in
comparison to Western
India (Refer Figure
6) primarily because of
lack of availability of raw
material. Reliance the
largest
petrochemical player in
India had all its cracking
units in West and this
facilitated the
growth of downstream
plastic processing
industry in Western
region. However with
expected to be a constraint
and hence facilitate
2) Capacity overview
Figure 7: Production
Capacity and
Operating efficiency
of plastics, Fy13
3,600
125%
50%
3,000
100%
600
25%
2,400
75%
0%
1,800
PE
PP
PVC
PS
1,200
Passe
nger
cars
N
C
Hond
a
Tata
Motor
s
Auto
comp
onent
(exclu
ding
Tyre)
North
ern
India
36%
of
dome
sticou
tput
ing Efficiency
N
(
C
O
Luma
x
Bony
polym
ers
Asahi
Amtek
Packa
ging
Uttara
khan
d(Hari
dwar,
Rudra
pur,
Pant
Nagar
)
(13%
of
organ
ized
flexibl
e
packa
ging)
Essel
Propa
ck
Paper
Produ
cts
(Rudr
apur)
Radh
aMad
hu
Group
(Rudr
apur)
TCPL
(Harid
war)
Electr
onics
Source: Industry
reports, Analysis by
Tata Strategic
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India has a
~400,000 TPA
production capacity
of PS and EPS.
However, all these
facilities are based
on imported styrene
since there is no
local production of
Styrene. In case of
Engineering Plastics,
there is a significant
opportunity in India.
Currently for
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petrochemical player in India had all its cracking units in West and this facilitated the
IOCL Panipat cracker and HMEL Bhatinda PP plant the availability of PE/ PP is not
The upcoming petrochemical complex at Barmer can also spurt the sector in the
region.
2) Capacity overview
3,600
125%
3,000
100%
2,400
75%
1,800
1,200
50%
600
25%
0%
PE
PP
PVC
PS
Capacity
Operating Efficiency
India has a ~2.9 MnTPA of PE production capacity out of which 1.6 MnTPA is HDPE
capacity, 1 MnTPA is LLDPE and rest is LDPE capacity. PP and PVC also have the
large production capacities, i.e., 3.7 MnTPA and 1.3 MnTPA respectively. PVC is one
of the major products where capacity growth in past had been significantly lagging
demand growth.
India has a ~400,000 TPA production capacity of PS and EPS. However, all these
facilities are based on imported styrene since there is no local production of Styrene. In
case of Engineering Plastics, there is a significant opportunity in India. Currently for
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Table 2: Production
Capacity of plastics
by major players,
FY13
Producer
PE
PP
PVC
Others
RIL
1,165,000
2,700,000
650,000
IOCL
650,000
600,000
-
GAIL
505,000
HPL
710,000
390,000
Chemplast Sanmar
250,000
Finolex
270,000
In downstream plastic
processing, India has over
23,000 processing units.
Total Machines installed
for plastic processing
were 98,000 in FY13. The
total processing capacity
has increased to 30 .0
MnTPA in 2013 from 11.7
MnTPA in 2006.
Supreme
-
272,000
Ineos ABS
60,000
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Figure 8: Plastic
production capacities
in Northern India
13
In downstream plastic processing, India has over 23,000 processing units. Total
Machines installed for plastic processing were 98,000 in FY13. The total processing
capacity has increased to 30 .0 MnTPA in 2013 from 11.7 MnTPA in 2006.
In Northern India, IOCL and GAIL are the two plastic producers with plastic
production capacity of 1.25 MnTPA and 0.5MnTPA. Indian Oil Corporation Limited
(IOCL) is the largest oil company in India in terms of revenues. It is promoted by the
Government of India with Government holding 79% shares. IOCL commissioned its
Panipat cracker in February 2011. The Group owns and operates 10 of India's 20
refineries with a combined refining capacity of 65.7 MnTPA.
Govt. of India has 57% stake in GAIL. It is a dominant player in natural gas trading
business and uses natural gas as the feedstock for production of ethylene and in
turn produces Polyethylene. GAIL has plans to double its plastic production capacity
by 2014. HMEL's Bhatinda Polypropylene plant (0.44MnTPA) was commissioned in
2012. All put together the plastic production capacity is expected to go up to
2.5MnTPA by 2014-15. The figure below maps the plastic production facilities along
with their capacities.
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3)Import-export scenario
SLIDE TITLE
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
PE
PP
Consumption
PVC
PS + EPS
Production
India is deficit in PE is
dependent on imports for
fulfilling demand. In FY13,
1.2 MnT of PE was
imported. PP production
exceeds the domestic
consumption and hence
caters to international
markets as well. India
exported ~800,000
tonnes and imported
~450,000 tonnes of PP in
FY13 (Refer Figure 10).
SLIDE TITLE
1600.0
1400.0
1200.0
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1000.0
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800.0
600.0
Plastics Industry
400.0
200.0
Domestic production of
PVC is not enough to
cater the demand and
hence 30% of demand is
met through imports.
1000,000 tonnes of PVC
was imported in FY13.
India is a net exporter of
PS, while most of the
engineering plastics are
being imported.
0.0
PE
PP
PVC PS + EPS Others
Import
Export
17.6%
2.3
Source: Intracen, Secondary research
2.7
2.0
2.1
1.8
FY07
FY08
FY09
FY10
FY11
FY12
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Domestic production of PVC is not enough to cater the demand and hence 30% of
demand is met through imports. 1000,000 tonnes of PVC was imported in FY13. India
is a net exporter of PS, while most of the engineering plastics are being imported.
SLIDE TITLE
1600.0
1400.0
1200.0
1000.0
800.0
600.0
400.0
200.0
0.0
PE
PP
PVC PS + EPS Others
Import
Export
Exports of plastic finished goods have more than doubled in the last 5 years from
~$1.2 Bn in 2007 to $2.7 Bn in 2012. But fierce competition from countries such as
China, Indonesia, Taiwan and other South Asian countries are restricting growth. The
exports of these value added plastic products could be a huge growth opportunity if
Indian manufacturers can increase/ maintain their manufacturing competitiveness
while ensuring high quality. (Ref: Fig 11 & Fig 12)
17.6%
2.3
2.7
2.0
2.1
1.8
1.2
FY07
FY08
FY09
FY10
FY11
FY12
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Others, 17%
fittings, 4%
Housewares,
6%
Writing
Other moulded
Optical
instruments,6%
4
Plastics
applications
& extruded
items, 12%
items, 8%
in
Agriculture
Woven
Packaging
sacks, 8%
items, 10%
970s
resources
1)Plasticulture Applications
Linings
Plastic Mulching
Greenhouse
Plastic Tunnel
T
C
1
A
4
Plastics applications
in Agriculture
970s witnessed the first Green Revolution in India. With the adoption of high - yielding
variety of seeds along with better farming techniques like better use of fertilizers, insecticides
and pesticides, made it possible for India to turn to a self-reliant agricultural nation. India
currently supports nearly 16% of worlds' population with 2.4% land resources and 4% water
resources. Nearly 65% of population directly or indirectly depends on agriculture and it
provides employment to 58.2% of population. Also, it contributes nearly 17% of India's GDP
consuming 80% of available water
resources
1)Plasticulture Applications
Application
Comments
Drip Irrigation
Precise application of irrigation water and plant nutrients at low pressure and frequent intervals through drippers/emitters directly
into the root zone of plant
System
Appication
of water under high pressure with the help of a pump.Water is released through a small diameter nozzle
placed in the pipes
Sprinkle Irrigation
Pastics
System
Linings
Plastic Mulching
film lining to prevent against seepage in canals, ponds and reservoirsAsoavoids depletion of stored water used
for drinking & irrigation purpose
Muching
is covering the soil around the plant with plastics film, straw, grass, hay, dry leaves, stones etc.
Prevents
loss of moisture and acts as a barrier between the soil and atmosphere
Greenhouse
Actsas
selective radiation filter, in which plants are grown under the controlled environment
Greenhouse
Pastics
tunnel facilitates the entrapment of carbon dioxide, thereby enhancing thephotosynthetic activities of the plant that
help to increase yield
Plastic Tunnel
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pipes
Control
Micro tubes
Disc filter
fittings
Table 4: Polymers
used in Plasticulture
applications
valves
S.no
Applications
PVC
LDPE
LLDPE
Sprinkler
HDPE
Main/sub
PP
Connecting line
Drip Irrigation
Main/sub main
Main/sub
fittings
Laterals/emitting
irrigation
Screen filter
main lines
Drippers/emitters
lines
main lines
Hoops
Control
Nozzles
Nozzles
Ropes
5
Mulching
UV films
Non Woven
valves
2) Plasticulture Potential
3
Greenhouse
Main/sub
UV films
UV films
Main.sub main
Ropes
main lines
lines
4
Low Tunnel
UV films
infrastructure
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Aluminum toxicity and soil acidity, soil
erosion and floods, shifting
Table 5: Region
specific agriculture
issues
agriculture
States/Parts of States
Region Specific Constraints
Efficiency (%)
infrastructure.
Efficiency (%)
Drip Irrigation
40-70
The application of
Plasticulture can
substantially decrease the
costs and therefore can
lead to high productivity
with a better quality of
crops. Table 5 shows the
potential benefits from
Plasticulture applications in
terms water saving, water
use efficiency and fertilizer
use efficiency. Each
application can drastically
save water by about 30 to
100%. In case of farm pond
lined with Plastic film the
total loss by seepage of
water can be minimized to
zero which is highly
beneficial. Also efficient
use of fertilizers can bring
the costs down which
again is beneficial for the
famers.
30-70
4020-
Sprinkler Irrigation
30-50
35-60
4030-
Plastic Mulching
40-60
15-20
25-0
Greenhouse
60-85
20-25
35-0
Shade Nets
30-40
30-50
Not Available
Table 6: Potential
benefits from
Plasticulture
applications
Tunnel
40-50
20-30
Not Available
Farm Pond Lined
Plasticulture
Water
Water Use
Fertilizer Use
Application
Saving (%)
100
40-60
Not Applicable
with Plastic Film
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States/Parts of States
Region Specific Constraints
infrastructure
productivity
Aluminum toxicity and soil acidity, soil erosion and floods, shifting
agriculture
infrastructure.
The application of Plasticulture can substantially decrease the costs and therefore
can lead to high productivity with a better quality of crops. Table 5 shows the
potential benefits from Plasticulture applications in terms water saving, water use
efficiency and fertilizer use efficiency. Each application can drastically save water by
about 30 to 100%. In case of farm pond lined with Plastic film the total loss by
seepage of water can be minimized to zero which is highly beneficial. Also efficient
use of fertilizers can bring the costs down which again is beneficial for the famers.
Plasticulture
Water
Water Use
Fertilizer Use
Application
Saving (%)
Efficiency (%)
Efficiency (%)
Drip Irrigation
40-70
30-70
4020-
Sprinkler Irrigation
30-50
35-60
4030-
Plastic Mulching
40-60
15-20
25-0
Greenhouse
60-85
20-25
35-0
Shade Nets
30-40
30-50
Not Available
Tunnel
40-50
20-30
Not Available
Farm Pond Lined
100
40-60
Not Applicable
with Plastic Film
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Reduction
in post-harvest
losses
Conversion
- cold
desert/wasteland for
productive use
3) Opportunity with
Plasticulture
improvement
upto
50-60%
Water
70%
Prevention
of weeds
growth
conservation
Protection
against
adverse climatic conditions
savings
upto 30-40%
Regular agri
Post harvest
Plasticulture
Total
Plasticulture, FY13
practices
management
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A report on
68,000
150,000
Plastics Industry
76,000
6,000
Plastics
application
s
in Food
Processing
Currently, in India,
processed food spends as
a percentage of per capita
GDP is very low compared
to other developed nations.
Therefore, the industry is
likely to witness a strong
growth in the future due to
changing lifestyles of
people. It has the potential
to grow at ~8% p.a. over
the next 5 years & is
expected to be a $100
billion industry by 2018.
Currently, Gujarat,
Maharashtra & Andhra
Pradesh are the major food
processing clusters in
India. (Ref: Fig 15)
8%
FY 15
175
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140
21
FY 18
5
Plastics applications
in Food Processing
ood processing industry is highly fragmented. Around 42% of the industry is in the
Funorganized sector. Meat, fish vegetables, fruits and oil account for 40% of total food processing
in India. Food processing account for ~9% of the total Indian manufacturing industry. Though it is a
small sector, it is experiencing above average
Currently, in India, processed food spends as a percentage of per capita GDP is very
low compared to other developed nations. Therefore, the industry is likely to witness a
strong growth in the future due to changing lifestyles of people. It has the potential to
grow at ~8% p.a. over the next 5 years & is expected to be a $100 billion industry by
2018. Currently, Gujarat, Maharashtra & Andhra Pradesh are the major food processing
clusters in India. (Ref: Fig 15)
Figure 15: Growth projections for food processing sector (USD billion)
8%
175
140
FY 15
FY 18
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Polypropylene
Plastic applications in
Food processing:
Major application of
plastics in food processing
is in packaging. Plastics are
preferred for its
characteristics and
versatility of applications. It
is light weight, corrosion
resistance, moisture proof,
highly versatile and can be
moulded into attractive
shapes. Additionally,
packaging standards have
become more stringent
with introduction of new
Indian norm closer to
global standards which are
also driving the use
plastics in packaging.
PVC 7%
Others
14%
Polyethylene 33%
PET 17%
29%
~14%
Strategy Partner
13.3
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7.1
45.1
26.7
FY 14
FY 18
Rigid
Flexible
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Turnover of food processing industry in North India was Rs.60 billion (2010) and the
major players being Britannia, Nestle & Pepsi. Uttarakhand (Haridwar, Rudrapur &
Pant nagar) is one of the key packaging clusters in India. 13% of the total organized
flexible packaging is from this region. The major players who are present here are:
Essel Propack, Paper Products, Radha Madhu Group & TCPL.
With rising personal income, consumer preference for packaged products and
changing food habits the food processing industry and the use of plastics in it is
expected to grow at a high rate in this region as well.
Knowledge &
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6
Factors
promoting
opportunit
y in
Northern
India
plastic processing.
The macroeconomic
trends for increase in
demand of end use
industry are more likely to
impact regions of Northern
India and Eastern India
than rest of India. These
two regions are in a
growing phase and are
facing significant change
in lifestyle and in turn
growth of domestic end
use industries.
provide boost to
downstream plastic
processing industries in
Northern India too.
Increasing urbanization,
changing lifestyle and
demographic dividend
are other factors
promoting the
opportunity of
downstream plastics.
Especially in Northern
Indian states and near-by
states of Bihar and
Jharkhand, the lack of
plastic processing
industries presents a
huge unmet opportunity
potential.
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A report on
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7
Challenges
for
plastics
industry
in
Northern
India
1. Addressing
environmental
myths
While the usage and
benefits of plastics are
manifold, it invariably
gets branded as a
polluting material. The
myth regarding the
polluting characteristic of
plastics needs to be
addressed. Plastics are
chemically inert
substances and they do
not cause either
environmental or health
hazards. If plastics can be
collected and disposed of
2.Technology
needs
Technology needs are not
particularly pertinent only
to Northern India; they are
the common need across
India. The Indian Plastic
processing industry has
seen a shift from low
output/low technology
machines to high output,
high technology machines.
There has been some
major technological
advancement of global
standards leading to
achievements like;
World's largest
integrated Clean Room
FIBC manufacturing facility
However, India's
technology needs are
Knowledge &
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25
7
Challenges for plastics
2.Technology needs
Technology needs are not particularly pertinent only to Northern India; they are the
common need across India. The Indian Plastic processing industry has seen a shift from
low output/low technology machines to high output, high technology machines. There
has been some major technological advancement of global standards leading to
achievements like;
World's largest water tank manufacturer in India. The Indian market is world largest
market for rotomolded water tanks.
However, India's technology needs are critical in areas like high production and
automatic blow molding machines, multilayer blow molding, Stretch/ Blow Moulding
Machines, specific projects involving high CAPEX like PVC calendaring, multilayer film
plants for barrier films, multilayer Cast lines, BOPP and Nonwoven depend solely on
imported technology/machinery. Other technological needs are:
Knowledge &
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3. Price
pressure
Managemen
t of plastics
8
Recycling
& Waste
recyclers. In India,
recycling of plastics is
currently 3.6MnTPA and
it provides employment
to almost 1.6 Million
people (0.6 million
directly, 1 million
indirectly). The following
figure shows the typical
plastic recycling
method. (Refer Figure
18)
Plastic waste
Material recovery
Energy recovery
recycling
recycling
generation
T
h
e
c
o
ll
e
c
t
i
o
n
&
K
S
2
A
Conversio
n to
monomer
P
Conversio
n to fuel
M
F
B
C
H
r
Reducing
agent in
furnace
Gasificatio
n
s
e
g
r
e
g
a
t
i
o
n
o
f
r
e
c
y
rther.
Many
a
times
,
hous
ehold
s and
estab
lishm
ents
throw
the
waste
on
the
street
or
dump
it in
open
witho
ut
segre
gatin
g the
waste
which
reduc
es
the
qualit
y and
at
times
could
make
it
hazar
dous.
It is
essen
tial to
save
the
recycl
able
waste
mate
rial
f
r
o
m
g
o
i
n
g
t
o
t
h
e
w
a
s
t
e
p
r
o
c
e
s
s
i
n
g
a
n
d
d
i
s
p
o
s
a
l
s
i
t
8
Recycling & Waste
Management of plastics
Rsustainability in this industry. Currently in India, number of organized recycling units for
plastics is ~3,500 along with additional ~4,000 unorganized recycling units. Most of the
plastics (PE, PP, PVC, PET, PS,) etc. could be recycled via mechanical
route. Whereas, engineering plastics like PBT, SAN and Nylon etc. are recycled by selected
recyclers. In India, recycling of plastics is currently 3.6MnTPA and it provides employment
to almost 1.6 Million people (0.6 million directly, 1 million indirectly). The following figure
shows the typical plastic recycling method. (Refer Figure 18)
Plastic waste
Material recovery
Energy recovery
Mechanical
Feedstock
Biological
Cement kiln
Heat & Power
recycling
recycling
recycling
generation
Conversion to monomer
Conversion to fuel
Reducing agent in furnace
Gasification
The collection & segregation of recyclable waste is one of the key steps in taking this
further. Many a times, households and establishments throw the waste on the street or
dump it in open without segregating the waste which reduces the quality and at times
could make it hazardous. It is essential to save the recyclable waste material from going to
the waste processing and disposal sites and using up landfill space. Salvaging it at source
for recycling could make profitable use of such material. This will save national resource
and also save the cost and efforts to dispose of such waste. An optimum way
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27
in a separate bag
or bin at the
source of waste
generation, by
having a two-bin
system for
storage of waste
at homes, shops
plastics create
lesser foot print
on earth.
9
Conclu
sion
pickers due to
economic reason. To
avoid this problem,
MoEF, Government of
India had come up with
rules in September
1999, restricting the
thickness and size of
plastic carry bags.
These Rules have
undergone
modifications in June
2003 and later in 4th
February, 2011
amended 2nd July,
2011. In the recent
rules manufacturers
and brand owners who
use such bags have
been made responsible
for the waste
management activity
along with the
Municipality / Local
Bodies. Some state
governments have also
completely banned the
u
s
e
o
f
p
l
a
s
t
i
c
c
a
r
r
y
b
a
g
s
w
h
i
c
to increase the
recycling of plastics
and increase the
magnitude of plastic
waste management.
Knowledge &
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28
A report on
Plastics Industry
o
m
m
o
d
it
y
p
l
a
s
ti
c
s
c
o
m
p
r
i
s
i
n
g
o
f
P
o
l
y
Plasticulture, which is
in its infancy in India,
can significantly
benefit agriculture by
its wide applications in
all the areas of
farming. It can be used
to tackle the specific
problems faced by
North Indian regions.
T
h
e
r
e
e
x
i
s
t
s
a
n
o
p
p
o
r
t
u
n
i
t
y
i
n
t
h
e
s
a
m
e
f
i
e
l
d
a
s
t
he demand of Plasticulture
will rise in order to ensure
efficiency and
sustainability of agriculture
practices.
A report on
Plastics Industry
Kn
owl
ed
ge
&
Stra
teg
y
Part
ner
2
9
9
Conclusion
CPolyvinyl Chloride (PVC) and Polystyrene account for bulk of the plastic consumption in
India. India has ramped up its production capacity for plastic to reach 2.9 MnTPA for PE, 3.7
MnTPA for PP and 1.3MnTPA for PVC. IOCL Panipat refinery
has been a game changer for North India and along with commissioned HMEL Bhatinda
plant and upcoming GAIL capacity expansion at Auriya it will increase the supply of
plastics in Northern India. With increased supply of plastics, the focus should now be on
the downstream plastic processing industries and how do they grow profitably.
There are several factors like low per-capita consumption, manufacturing focus, end
use industry growth, availability of feedstock, increasing urbanization, changing
lifestyle, demographic dividend etc. promoting growth of plastic across India.
However specific to Northern India we observe a lack of planned downstream plastic
processing plants within the region and near-by regions of Eastern India to make use
of these factors. Spill off benefit of promoting plastic processing is the huge inherent
employment potential.
Many application areas of plastics also have overlaps that make market driven
material substitution a good possibility. There are strategic objectives driven by part
consolidation and sustainability compulsions by the user industry that have made
Plasticulture, which is in its infancy in India, can significantly benefit agriculture by its
wide applications in all the areas of farming. It can be used to tackle the specific
problems faced by North Indian regions. There exists an opportunity in the same field as
the demand of Plasticulture will rise in order to ensure efficiency and sustainability of
agriculture practices.
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References
India Petrochemicals
Industry Outlook to 2015
Handbook on Indian
Chemical Industry,
IndiaChem2019 and 2012
www.cipet.gov.in
Crisil Research
Chemicals &
Petrochemicals statistics
at a glance : 2013, GoI
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References
Report of the Sub-group on Petrochemicals for the 12th Five Year Plan
www.cipet.gov.in
Crisil Research
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1
1
About
Tata
Strateg
ic
ounded in 1991 as
a division of Tata
Industries Ltd, Tata
Strategic
Management
FGroup is the
largest Indian own
management
consulting firm. It
has a 50 member
and sectors.
Strategy
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Our Offerings
India
Entry
Set Direction
Market
insights
Alliance
& Acquisition
Planning
Organization Effectiveness
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Marketing & Sales
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due diligence
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Principal Chemicals
Corrections
Tata
Strategic
Contacts
Manish
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E-mail:
manish.panchal@t
smg.com
Phone: +91 22
6637 6713
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Our Offerings
Strategy
Vision
India
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Set Direction
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insights
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Growth
Strategy/Business Plans
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due diligence
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Strategy
Scenario
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Planning
Strategy
Manufacturing
Strategy
Organization Effectiveness
Operations
Organization
Revenue
Structure
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Chain
Corporate
Product
Optimization
Center Design
Innovation
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Drive Strategic
R
Market
Share
Superior
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Performance
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Rura/Urban
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Excellence
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This report has been authored by: Manish Panchal ([email protected]), Charu Kapoor
([email protected])
and Pulkit Agarwal ([email protected])
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About FICCI
Established in 1927, FICCI is one of the largest and oldest apex business
organizations in India. FICCI's history is closely interwoven with India's struggle for
independence, industrialization and emergence as one of the most rapidly growing
global economies. FICCI has contributed to this historical process by encouraging
debate, articulating the private sector's views and influencing policy.
FICCI draws its membership from the corporate sector, both private and public,
including MNCs; FICCI enjoys direct and indirect membership of over 2,50,000
companies from various regional chambers of commerce and through its 70 industry
association.
FICCI provides a platform for sector specific consensus building and networking and
is the first port of call for Indian industry and the international business community.
Our Vision
To be the thought leader for industry, its voice for policy change and its guardian for
effective implementation.
Our Mission
To carry forward our initiatives in support of rapid, inclusive and sustainable growth
that encompasses health, education, livelihood, governance and skill development.
To enhance the efficiency and global competitiveness of the Indian industry and to
expand business opportunities both in domestic and foreign markets through a
range of specialized services and global linkages.
Mr P. S. Singh
Ms Charu Smita
Head
Assistant Director
Chemicals & Petrochemicals Division
Chemicals & Petrochemicals Division
FICCI
FICCI
Federation House, 1 Tansen Marg,
Federation House, 1 Tansen Marg,
New Delhi-110001
New Delhi-110001
Tel: +91-11-23487473 (Dir)
Tel: +91-1123357350 (Dir)
Email: [email protected]
Email: [email protected]
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About FICCI
Our Vision
A not-for-profit organization,
FICCI is the voice of India's
business and industry.
Our Mission
POTENTIAL OF
PLASTICS
INDUSTRY IN
NORTHERN INDIA
WITH SPECIAL
FOCUS ON
PLASTICULTURE
AND FOOD
PROCESSING -2014
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industry