KOCHI: The scarcity of raw materials in Indian market coupled with the steep rise in prices have landed the plastic industry in a deep crisis. If the government fails to intervene, many plastic processing units in the micro, small and medium enterprises (MSME) sector will be forced to shut down, said Kerala Plastic Manufacturers’ Association (KPMA) president Balakrishna Bhat Kakkunje. The All India Plastic Manufacturers’ Association has urged the Union government to allow duty-free import of raw materials and ban their export for one year.
There are 1,340 plastic processing units in Kerala which provide direct and indirect employment to around 1 lakh people, said KPMA former president P J Mathew. The prices of raw materials, including polymers, have gone up by 50 to 155 per cent in the past six months. According to him, petrochemical companies like Reliance, Indian Oil Corporation, Gas Authority of India Ltd (GAIL), ONGC Petro Addtitions Ltd (OPAL) and Mangalore Refinery and Petrochemicals Limited (MRPL) have reduced supply of raw materials to Indian companies in view of the growing demand globally.
“In the post-Covid scenario, many leading petrochemical firms have shut down their plants for maintenance and there is high demand for raw materials in the international market. Indian companies are cashing in on the situation and hiking the prices of raw materials in the local market every week. We have urged the Union government to ask the public sector units to cater to local processing units,” said Mathew.
The plastic processing units in the state manufacture packaging boxes, containers, household items like buckets and furniture. There are around 20 recycling units also. Most of the units are based in Ernakulam, Thrissur and Kozhikode.
“The scarcity of raw materials has forced the processing units to scale down production and most of the units are working at 50 per cent of their production capacity,” said KPMA general secretary M S George. The manufacturers are not able to deliver global orders on time due to the scarcity of raw materials. The rise in prices and shortage of raw materials will also affect the prices of plastic pipes, drip irrigation systems, water tanks and woven sacks. Toy makers are also in crisis, he said.