06 February 2012 13:23 [Source: ICIS news]
By Prema Viswanathan
NEW DELHI (ICIS news)--India's plastics processors need to step up their exports in the coming years to help mitigate the country's unemployment problem, a senior industry official said over the weekend.
“Exports of plastics products in India rose by only 11% year on year in the fiscal year 2010-2011, whereas imports of these products jumped by 29%." said M P Taparia, managing director of Supreme Industries, a leading plastics processor in India and chairman of polystyrene (PS) producer Supreme Petrochem.
Exports and imports of plastics goods in fiscal 2010-2011 totaled 800,000 tonnes each, he said on the sidelines of the 8th PlastIndia Exhibition in New Delhi which runs from 1-6 February. “We need to see plastics exports overtaking imports in the next few years.”
With labour costs in China rising rapidly, India has the potential to step in and take away some export market share from the world’s largest plastics processing centre, Taparia said. “Our labour costs are lower than China’s. We also have a larger pool of skilled manpower compared to the Middle East, which has access to low cost feedstocks, but faces a labour shortage.”
For a country such as India, which is burdened by a huge unemployment problem, developing the plastics processing industry should be a priority, Taparia added.
One deterrent against the growth of the processing industry in India is the rigid labour policy adopted by the government.
“The government should grant plastics manufacturers the flexibility to shut down unprofitable units within a short time span instead of making them go through a painful waiting period as happens now,” he said.
Other factors that have restricted the growth of the plastics industry in India include the cost and quality of power, cost of borrowing and weak infrastructure.
Demand for plastics products and raw materials was sluggish from July-December 2011, as the European debt crisis coupled with the slow recovery in the US cast a pall over the Indian market.
“But I am quite optimistic about demand picking up in 2012,”Taparia said.
Additional reporting by Malini Hariharan and Ong Sheau Ling
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