On the Upsurge

On the Upsurge

Even though plastics consumption in India lags behind that in developed nations, vendors are eyeing exponential growth by embracing the latest innovations and applications.

Plastics has come to become such a commonly used item in our daily lives that one tends to not appreciate the different applications of plastics, unless our attention is brought to them. Whether it is utilised within manufacturing and packaging industries or for telecom and agricultural applications, the merits of this versatile material are endless. Of course, there is no doubt that we, in India, have not exploited plastics to their optimal potential yet. The Indian plastics industry is still in an embryonic stage, especially when compared to its counterparts in developed countries. However, that story is now about to change.
Given the host of new initiatives that the Indian Government has introduced, including Make in India, Smart Cities, Digital India, and the Swacch Bharat Abhiyan, the plastics industry is bound to get a boost. And that’s bodes well for the economy, as a whole.

POTENTIAL TO EXPAND
As a matter of fact, the processing and consumption of plastics is seen as a barometer of economic growth in advancing economies and plastics-related statistics therefore suggest how these economies are doing. With plastics consumption said to be around 10-11kgs per capita in India, as opposed to the world average of 28kgs, it is safe to assume that we have a long way to go. In stark contrast, advanced economies like the USA boast a figure as high as 100kgs.

Not only does this demonstrate the fact that there is tremendous scope for growth of plastics in the coming years, it also suggests that the demand and consumption of these plastics will be internal, that is from within India. This provides ample support to the need for continuing and pumping in fresh investments in cracking, polymerisation and downstream capacities over the near future. Besides, it will also pave the way for increasing the adaptation of innovative processes and applications for the benefit of the industry’s varied customers. Getting this additional demand to spur growth and investment in the industry is a definite positive for India, more so in relation to advanced economies.

As mentioned earlier, newly initiated programmes would further drive this progress. Digital India will increase the production of telecom, electronics and related products, requiring gadgets made out of plastics. With Make in India, demand for more of these products is expected to come India’s way as the country becomes a major sourcing hub. Smart Cities will provide a fillip to plastics used in infrastructure. Plasticulture, which refers to the use of plastic pipes and accessories in agriculture etc., is supporting another revolution in Indian agriculture, where land and water can be judiciously used for enhancing output from a given land mass. It is thus obvious that plastics covers all kinds of industries with its range of applications. The utility extends to automobiles, electronics, construction, agriculture, horticulture, healthcare, textiles, FMCG, food processing, etc. And, as a result, India has every chance to become the most sought-after destination for plastics, going forward.

Industry leaders share this optimism. Ajay Durrani, MD, Covestro India, states, “Covestro is one of the global manufacturers of polyurethane and polycarbonate, which were invented by this company, and today we are global leaders in this particular hi-tech polymer that we manufacture. I think with this, we have a lot of opportunity to showcase our presence in various sectors, whether it is automotive, construction, electronics, medical devices, footwear, furniture, etc. There are abundant opportunities because of the diversity of usage of polymer-based products, which we collectively refer to as ‘talented materials’”. He adds, “When we started in the 1960s, the growth in the industry was gradual. In my view, for the last five years, the growth has been phenomenal. However, I still feel that there is substantial opportunity to advance.”
Nitin Kulkarni, president, sales and marketing, Finolex Industries, supports this view. He explains, “PVC is the third largest plastic in production and consumption, globally. In India, the PVC market is expected to witness a double-digit growth rate in the coming years. Some of the major drivers contributing to this growth include demand from the agriculture sector; infrastructure, building and construction sector; automobile industry; and medical devices. With expected increase in demand and the Government’s thrust in promoting the housing sector, we remain on track with plans to increase capacity for pipes and fittings, further.”

The future certainly looks promising. “By 2020, India’s plastics consumption is set to increase from the current 12 million metric tonnes per annum to 20 million metric tonnes per annum. Every manufacturer will now need to rethink regarding making their production operations smarter, in terms of adopting new technologies and moving towards automation, while turning more efficient and effective, yet staying economical,” confesses Atul Jain, joint MD, Jain Irrigation Systems. “The last five years have provided us with a consistent level of profitability and sales growth, but we are really hoping for a good growth burst in the next five years,” supplies Jain.

BREAK THE MOULD
Like others, the Indian plastics industry too is keen to sustain this growth through fresh investments and the creation of new capacities. It is important, therefore, to recover such investments in a timely manner, by inventing novel applications through innovation. One cannot, as industry players realise, only count on quantitative growth. Growth can sustain itself only if the customer sees added value in the products.

Durrani puts forth the example of polyurethane foam mattresses. He explains how this product has brought about a significant change in our day-to-day lives, wherein everyone today prefers lightweight mattress that would essentially provide a better sleeping experience after a hard day on the job. Durrani professes, “The requirement for comfort has gone up so much, whether it is inside the home or in the car; polyurethane foam thus becomes an essential part of our lives.”

He goes on to add that the use of similar innovative properties of plastic materials have made them a good insulation medium, which are being used in today’s essentials like refrigerators or building encapsulation. He claims, “Developed economies have been using this insulating material to save on a substantial amount of energy consumption. These are the technologies that we can easily adapt and use, instead of producing and burning coal.”

Finolex has similar innovative interventions in their product range. Kulkarni proudly says, “Finolex Pipes were the pioneers in agricultural piping, specifically selfit pipes. With our recently inked partnership with Lubrizol Corp, we will be processing Finolex FlowGuard CPVC pipes and fittings. Several new products will be added to our real estate, infrastructure and construction portfolio too, in the coming days.”

Jain points out: “We have pioneered the application of 1.6m diameter Polyethylene (HDPE) pipes in the sub-sea application for sea water desalination in Chennai, followed by another sub-sea application using 2m diameter pipes in Gujarat. While we will look for newer areas, biotechnology, tissue culture, integration into irrigation solutions and controlled irrigation would continue to be our main focus areas.”

DELIVER VALUE
It is not enough for any manufacturer to bring in new products, they also need the customer to realise its value and appreciate the same. Durrani talks about an innovation that his company has brought to the market which also has a favourable influence on environmental protection. Expounding on this, he says, “This is a unique process through which carbon dioxide can be included as a raw material for certain products. This is a real breakthrough innovation, using 20% carbon dioxide as the input in one of the polyurethane foam mattresses. This means removing that much carbon dioxide from the environment, thereby helping to reduce the carbon footprint.”

Explaining Finolex’s contribution in this area, Kulkarni states, “In the agricultural segment, we have recently included bell-end column pipes, which is a cost-effective alternative to regular column pipes. This indigenous product solution reduces the cost burden for the end consumer. In the construction and real estate segment, just last year, we have introduced SWR integrated rubber ring pipes and fittings. The rubber ring system makes the lives of the applicators (plumbers) much easier in terms of jointing operations.”

POLICY SUPPORT, SUPPLE GROWTH

One expectation to support the industry growth plans that everyone is in consensus with is the continued policy support from the Government. Kulkarni suggests, “Against the backdrop of robust Government initiatives, the vision of extending the coverage of irrigation and improving water use efficiency in a focused manner has created immense demand for agro-based products. On the other hand, the focus on Smart Cities and real estate growth has further fuelled growth for plumbing solutions in the non-agro sector. Such initiatives by the Government will only create further demand for pipes and fittings, which will benefit us and the industry at large.”

Acknowledging the current policy support, Durrani says, “The government has already started a wonderful initiative with GST, and I think that will also create a level playing field for the organised sector. One of the areas that the Government can really inspect is creating a level playing field for high-technology products, because in order to be successful in the global market, you need to bring up hi-tech polymers within your country. If you create barriers, the level of competence goes down and Indian manufacturers will not be able to compete with global players.”

After all, execution is key, whether at a pan-India level or in the case of state-specific measures. “I hope policy reforms and new schemes will be implemented effectively. For instance, the Maharashtra state government has now made it mandatory to have all irrigation facilities piped. The guidelines will push drip irrigation. This would reduce the waste of water, bring down consumption of electricity and improve the quality of produce,” says Jain.

It is easy to sense that the Indian plastics industry will soon experience accelerated growth, and is, in fact, already on its way there. If India is destined to be another power in the manufacture of plastics, it is not going to be only because of the growing domestic demand. With initiatives like Make in India, the industry is surely banking on building its export potential to cater to the needs of those countries, who wish to develop their industries, but are not able to garner investments in creating capacities for the downward processing of plastics. Coupled with the growing discovery of new materials and innovations, this will be a great way forward for the industry. After a patient wait, the time for supple growth is finally here!

Categories: Features