Strength in flexibility

The plastic industry is continue to grow at 12-16 per cent ever year and has strong future with the growing usage in different segments. However, the industry is facing many challenges in the process to grow at its full potential, said V Anil Reddy, president, AP Plastics Manufacturers’ Association.

Talking about issues that are impeding the growth of the industry, he said the plastic industry all over the country is facing tough times with power supply shortage, except in Gujarat. The recent power crisis in the state with three power holidays and unofficial cuts counting to four hours every day is hampering the smooth flow of production.

For instance, the machine has to have certain temperature to melt the granules. If there is a power cut for 10 minutes, the machine requires another 40 minutes to level up the temperature and to start the production. Even the employees have to be paid irrespective of the production. There is a constant pressure for businesses to pay instalments. They have to be paid promptly and the credit rating goes down if there are frequent defaults leading eventually the company to become an NPA over the time. The rising levels of NPAs show the state of the industry in the country.

The frequent polymer (raw material for plastic) price fluctuation is creating huge trouble in the process of selling finished goods. The supply chain of plastic requires some time, from procurement of raw material to selling out finished product in the market. The price fluctuation may lead the manufacturer to end up in huge losses at times. The industry needs a constant price for a month which will enable the manufacturer to sell out the product in the market by having margins on the price he procured the raw material. There should also be government regulation to monitor the prices, he said,

There is also huge shortage of labour in the industry. The government has indirectly pushed the wages of labour with its employment guarantee scheme. The low-level employees have to be paid `200 and the pay has to be increased subsequently for all the employees in upper levels increasing overall costs of companies.

“We said at many forums the scheme can be used for the benefit of the industry. We asked the government to give `100 and the other `100 will be paid by the businesses to employee those labour in the industry. This will make the employees skilful and also get a permanent job, which will also decrease the costs of the industry and the government. The reduction of these overheads will be passed to the customer by offering a product at cheaper price. This will enable all the stake holders to be profitable and creates a win-win situation,” he said.

The industry continued to grow at 12-16 per cent even during recession. As plastics are used across segments, the fall of production in one segment is nullified by the growth of usage in other segments. Plastics are being increasingly used in packaging and global companies entering in to Indian markets will also bring new opportunities to the industry, Anil Reddy added.

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Category: Business, Business News