Saurashtra's plastic units face closure as polymer price soars

With the rising prices of polymer prices, 340 out of 750 polymer-based plastic units in Saurashtra are facing a bleak future.

"Any further rise in polymer prices will lead to the complete shutdown of plastic products units in the state. Though around 67 per cent of the plastic products in the country are manufactured in Gujarat, there is no system available to provide polymer at reasonable prices to these units," said Kiritbhai Vyas, secretary, Saurashtra Plastic Manufacturers' Association.

"In Gujarat there are 900 units engaged in the production of polymer-based plastic items such as milk bags and oil bags. As much as 1,800 units produce footwear, tooth brushes and combs, while 600 units produce PVC pipes and various agriculture irrigation items.

"Also, more than one lakh people are directly or indirectly employed through this industry," Vyas said.

"Around 90 per cent of the units engaged in this industry are from the small scale sector. Of this 25 per cent are cottage and tiny units, which cannot survive for long in the present situation," Vyas added.

"We have a long pending demand for laboratory facility for product and material testing in the Saurashtra region. At present we have to go to Ahmedabad for laboratory testing with our products which is costing us heavily," Vyas said.

"We meet only 50-60 per cent for our demand for polymer from domestic producers. The rest we meet through imports. If the government reduces import duty from 20 per cent to 5 per cent, the polymer prices will come down which will help plastic manufacturers to stand against global competition," he added.

Domestic producers revise the prices of LDPE and PVC polymers three times in a month. In the last one year prices of polymer have risen by more than 50 per cent.

The prices of polymer were at Rs 48,970 per tonne in August 2003, which jumped up to Rs 73,689 per tonne in August 2004. As domestic manufacturers of polymers are in contact with the international market trends, they revise prices according to probable market fluctuations.

"The petro chemical industry should be put under the Monopoly Restricted Trade Practice Act, as the government has no control on such units over price hikes," said Vyas.