Sharp rise in polymer raw material prices hits manufacturing firms, MSMEs: Associations

The plastics processing sector, producing plastics goods for food processing, agriculture, toys, healthcare, pharma, automotive, infrastructure and consumer segments and belonging to micro small and medium enterprises sector, is facing acute raw material shortage that may lead to the closure of several thousand units across the country.

Around 50,000 units in the plastics processing sector that offer employment to about 50 lakh workers in the country are already operating below 50 per cent of their rated capacity, and if the crisis prolongs, thousands of MSMEs will have to close down, said the heads of industry bodies like the All India Plastics Manufacturers Association (AIPMA).

Industry bodies have slammed large petrochemical companies, including PSUs, for exponentially increasing their prices without any commensurate in prices of feedstock pointing out that the prices have soared by 40-155 per cent in the last 8-10 months. They have also accused large petrochemical companies of creating an acute shortage of raw material in the market thus encouraging premium and black-marketing.

The plastics processing sector has sought immediate government intervention to ensure raw material supply by Indian petrochemical companies and free imports of raw material that is not produced in the country.

"The industry is facing acute shortage of polymers, the main raw material for plastics goods production which has varied application in nation-building including Agriculture, Healthcare, Food sector and Toy sector,” said Chandrakant Turakhia, President, AIPMA.

Organization of Plastics Processors of India, Plastic Export Promotion Council, Gujarat State Plastics Manufacturers Association, Indian Plastics Federation-Kolkata, Karnataka State Plastics Association, Maharashtra Plastics Manufacturers Association, Kerala Plastics Manufacturers Association, Telangana and Andhra Plastics Manufacturers Association, and Canara Plastic Manufacturers & Traders Association have pleaded the government for remedial measures.