Expansion of refineries may boost plastic processing units

With major refineries in Northern India expanding their raw plastic producing capacity, the plastic processing units in states like Rajasthan, Punjab, Haryana, Uttarakhand, Jammu & Kashmir and Himachal Pradesh are expected to grow based on increased availability of feedstock and higher focus on manufacturing sectors.

The total plastic production capacity is expected to go up to 2.5 million tonnes per annum by 2014-15 in the region, according to a Knowledge and Strategy Paper prepared by FICCI with the help of Tata Strategic Management.

In Northern India, Indian Oil Corporation Ltd(IOCL) and Gas Authority India Ltd(GAIL) are the two plastic producers with plastic production capacity of 1.25 million tonnes per annum and 0.5 million tonnes per annum respectively . IOCL commissioned its Panipat in Haryana cracker in February 2011. While GAIL has plans to double its plastic production capacity by 2014. Also, Mittal- Hindustan Petroleum ( HMEL)'s Bathinda Polypropylene plant having capacity 0.44 million metric tonnes per annum was commissioned in 2012. In addition to this, the upcoming petrochemical complex at Barmer in Rajasthan can also spurt the sector in the region.

The availability of 2.5 million tonnes per annum of plastics in Northern region may result in spur of investments in downstream plastic processing. Moreover, since the Northern region does not have access to ports, hence the import/export potential is restricted because of additional cost of transportation. This could result in ensuring a self sufficient demand supply scenario for the north as the optimal solution, according to the study. It is worth mentioning that the total consumption of plastics in India was 10 million tonnes per annum. Western India has traditionally been the largest consumer of plastic accounting for almost 47 per cent of the total consumption.

Out of the total, Northern India accounted for 23 per cent. Bulk of the consumption in Northern India is from end use industries of Auto, packaging(including bulk packaging),plasticulture applications, electronic applications etc.

According to the study, the consumption in Northern India is low in comparison to Western India primarily because of lack of availability of raw material. Reliance Industries, the largest petrochemical player in India had all its cracking units in West and this facilitated the growth of downstream plastic processing Industry in Western region. However with IOCL Panipat and HMEL Bathinda polypropylene plant the availability of plastic is not expected to be constraint and hence facilitate downstream plastic processing units. Experts believe so there are immense opportunities in the sector for the prospective entrepreneurs.