Ruined lives, shuttered factories: Anti-plastic campaign brings down a city

Halol is India's hub of plastic bag and granule manufacturers. As public opinion turns against using plastics, small businesses and ordinary people are struggling to cope up

Early morning on September 16 this year, Rajendrasinh Khushwah’s wife found him hanging from a ceiling hook in their living room in Gujarat’s Halol, a city that’s the hub of plastic bag and granule manufacturers. Khushwah, 60, a small plastic bag manufacturer, had to sell his machinery and rent out his premises when Prime Minister Narendra Modi’s demonetisation decision in November 2016 dried up payments for his goods. The second blow to Khushwah’s business came when Modi, in his Independence Day speech this year, spoke against single-use plastics. The people who had rented Khushwah’s premises shut shop in August, leaving him with little income and a home loan. He was emotionally and financially destroyed, says his family.

“He was constantly worried and barely ate a meal a day for weeks before his suicide. We used to get Rs 30,000 a month as rent from the factory. Since August we haven’t received that rent after the unit shut down,” said Khushwah’s wife Indiradevi at their home in Halol. The couple’s elder son Dheerajsinh said, “Hundreds of small plastic makers shut operations because of widespread fear. People have this impression that Modi and (Home Minister) Amit Shah always do what they say. On August 15, when Modi called for a ban on single-use plastic, people here started believing that he would ban plastic bags. For them (bag manufacturers) it was the end of the world.”

It is estimated that more than 500 of the 700-odd factories registered with the Gujarat Industrial Development Corporation (GIDC) in Halol are small manufacturers of plastic bags, wires and granules. Manufacturers in Halol alleged the unleashing of “white-collar terror” after Modi’s August 15 speech, referring to the pollution control board repeatedly raiding their businesses despite there being no official ban on manufacturing plastic bags above 50 microns. Factories had their electricity supply cut off for violating pollution rules, adding to the uncertainty about the future of plastic bags. Demand fell and factories were left with tonnes of polypropylene, the raw material for various kinds of plastic products.

The wife and son of Rajendrasinh Khushwah, a plastic bag maker in Halol. Khushwah (inset) committed suicide after PM Modi's call to ban single-use plastic left him in financial doldrums. Photo: Sai Manish

Halol goes bust

Hundreds of small plastic bag factories are locked up in Halol. Factories still open are dotted with idle machines and idle workers doubling up as security guards. Sacks upon sacks of Repol and Oplene, polypropylene brands manufactured by Reliance Industries Ltd. (RIL) and Oil and Natural Gas Corporation of India (ONGC), lay piled up. The GIDC enclave—once abuzz with transporters and loaders ferrying recyclable plastic and polypropylene to granule makers and granules to plastic bag makers and plastic bags to the markets--have all but collapsed.

Hundreds of workers, mostly from Bihar and Odisha, have returned home. The few Gujarati labourers who stayed back for contractual work are running out of options. Mahesh, 28, worked at a plastic bag manufacturer along with 14 others. His factory shut down in August and he hasn’t found a job since. Mahesh, who uses just one name, is preparing to return to his village in Banaskantha district and take a farm on lease to make ends meet. “I used to make Rs 10,000 a month. For over a month, I haven’t been paid after the factory shut down. I have been working in a plastics factory since I was 14 years old. Factories here do not need uneducated people like me. There are no jobs for manual labour here anymore,” he said.

On October 2, Modi was expected to announce a ban on single-use plastic but he didn’t. The government instead announced it would "discourage" single-use plastics without clearly defining what that means. From August 15 to October 2, most of India’s estimated 30,000 small plastic processors and 4,000 plastic recyclers were left in the limbo. The Federation of Indian Chambers of Commerce and Industry (Ficci) estimates India’s plastic processing industry was worth more than Rs 1 trillion in 2015 and employed over 1.1 million people. It estimated small manufacturers to grow at a compounded annual growth rate of over 10 per cent until 2020, helped by the fact that demand would improve as India has one of the lowest per capita plastic consumption (11 kg) in the world. But with the government now discouraging single-use plastics and asking states to enforce bans, such optimistic forecasts could well turn out to be a nightmare for small plastic processors.

Akshay Sureshbhai Shah ran a small factory manufacturing plastic granules from recycled plastic in Halol, employing 11 people. He shut down his unit in August after Modi’s August 15 speech. As plastic bag factories shut down, demand for the granules he manufactured collapsed. “I still have 85 tonnes of granules stocked with me. There is no demand for granules. The few buyers left in the market are quoting unrealistically low prices at which I won’t sell without running huge losses. My machinery, which I purchased with an investment of Rs 7.5 lakh in 2008, will become useless. I used to send granules to Maharashtra, Karnataka and Punjab. These states are also banning plastic bags and there is virtually no demand from here. I will definitely have to think of an alternative business. Ban or no ban, the future of the plastic business for small people like me isn’t good in this country,” said Shah.

The United Nations defines single-use plastics as “disposable plastics, commonly used for plastic packaging that include items intended to be used only once before they are thrown away or recycled. These include, among other items, grocery bags, food packaging, bottles, straws, containers, cups and cutlery.” Of particular concern are multi-layer packaging (MLP) used by some of the biggest processed food-making corporations like Hindustan Unilever, Pepsico and ITC. MLP, like the ones used to package chips and biscuits, are non-recyclable, unlike many disposable plastic bags. Ficci estimates India’s plastic packaging industry to touch $72 billion by 2020 – a growth of 18 per cent since 2015. The food and beverage industry, as the biggest user of plastic packaging, would be the key driver of this growth.

A plastic bag making machine lying idle at a factory in Halol. Photo: Sai Manish

Dump plastic pressure on companies

As public opinion turns against plastics, big food and beverage companies have of late started collecting MLP and selling them to cement factories to be used as fuel or diverting them for use in road construction. A Pepsico India spokesperson said, “We believe in a circular economy of plastic. And, we are working with the government and waste management partners to enhance plastic waste management in the country. In 2019, PepsiCo India is committed to collect, segregate and sustainably recover 30 per cent equivalent of plastic packaging across 20 states.”

The spokesperson said that all Pepsico India’s packaging used for its potato chips brand Lays and other products like Kurkure will become either recyclable, compostable or bio-degradable by 2025. The Indian Tobacco Company (ITC), which is also one of the biggest users of non-recyclable multi-layer plastic, has also put a plan of action in place. "ITC aims to ensure that, over the next decade, 100 per cent of packaging is reusable, recyclable or compostable. In addition, we are addressing the critical issue of waste management through packaging optimization and use of packaging solutions that permit easier recycling," said Chitranjan Dar, group head of Environment Health and Safety, R&D and Projects of ITC.

So what does it mean for some of the biggest multi-layer plastic makers in India? Uflex is a big producer of multi-layered plastics that has FMCG behemoths like Pepsico and Tata Global Beverages as its customers. Its officials said they have developed technologies to recycle multi-layered plastics as far back as 1995 . So why was the technology developed by Uflex to recycle metallised multi layered food packaging like chips packets as far back as 1995 not widely adopted in India? Jeevaraj Pillai, Joint President of packaging and new product development at Uflex said, “We held on to this technology close to our hearts. It is only when we realised that people are lobbying against multi-layered packaging that we started to promote this concept. Secondly, bio-degradable multi layered packaging is a technology that we only recently developed. We could not launch it till now because there are only two laboratories in the country which can validate this product.”

The government may have backtracked on going all out against single-use plastics, but its announcement—accused of being without any policy thought or provision for alternatives—has damaged the small-scale plastic industry. On June 25, months before Modi’s Independence Day speech calling for a ban on single-use plastics, a Reserve Bank of India (RBI) expert committee on micro, small and medium enterprises recommended setting up a Rs 5000-crore distressed asset fund to help manufacturing units in clusters that had become non-performing assets due to a “change in the external environment.”

The RBI committee’s report highlighted the example of plastic units and the consequences of banning them. “A blanket ban on certain activities, for instance on plastic bags or on chemical units, by courts, tribunals, new legislation or by government, leave these businesses helpless. Often these bans serve a larger societal or environmental purpose but end up causing collateral damage as there is little by way of advance notice or even clear direction of policy. Death and calamity will occur. From a micro, small and medium enterprises perspective, the intent must be to mitigate the impact,” it said.

Even as many ministers in the government in addition to the PM called for a ban, there was little mention of setting up such a fund for those who may have to bear the brunt of a blanket ban on plastics imposed with little advance notice. Whether Khushwah would have hung himself had such an emergency fund been created would be a matter of conjecture. But an announcement to ban single use plastics on August 15 that led to fear, rumour mongering, and uncertainty till October 2 has certainly plunged many the businesses of other small plastic makers on the verge of collapse.