Pakistan ban on plastic bags dents HDPE demand

30 March 2007 07:36  [Source: ICIS news]

SINGAPORE (ICIS news)--A recent crackdown on thin polyethylene (PE) shopping bags by the provincial government of Sindh in Pakistan has dented demand for high density PE (HDPE), traders in Karachi said on Friday.

The decline, however, was a temporary phenomenon and demand was expected to rebound in the coming months, they added.

"The new government standard for the bags, which has set the minimum thickness of the bags at 15 microns, will increase consumption of HDPE," said a trader.

But some traders were more pessimistic in their prognosis and said the government's directive would result in the closure of several downstream plants.

"Many of the smaller bag makers will not be able to pass on the additional HDPE costs to their own customers," said a second trader.

The Sindh government has banned the production, sale and use of thin plastic bags on environmental grounds, the traders said.

It has unleashed a media campaign promoting the use of thicker bags on the grounds that thin bags block sewerage lines and pose an environmental hazard, they said.

Pakistan’s PE bag making industry caters mainly to the domestic demand. Karachi is home to 20% of Pakistan's 10,000 PE bag makers, traders said.

"So far PE bag makers in Pakistan have been maintaining a thickness of only 8-10 microns. But now they can no longer do that," said the first trader.

Several PE bag makers in Karachi had pulled down their shutters two weeks ago to protest against the government's directive.

They resumed production only this week, when the Sindh Home Department, with the approval of the local High Court, allowed officials to raid, arrest and fine violators of the ban.

Violators can be jailed for three to six months and fined Pakistan rupees (PRs) 60,000 ($989) for violating the ban.

Pakistan consumed 50,000 tonnes/year of HDPE, the main ingredient in the bags, in 2006.

($1=PRs60.65)

By: Prema Viswanathan
+65 6780 4359

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