Plastics processors fear that their margins will be hit by 20-25 per cent due to the anti-dumping duty on imports of certain plastics processing or injection moulding machines from China.
Jigish Doshi, chairman of the Gujarat State Plastics Manufacturers Association (GSPMA), said, “Indian machines cost at least 25 per cent more than Chinese machines. While the price varies with size, quality and degree of automation, on an average, Chinese machines cost between Rs 5 lakh and Rs 10 crore.”
He added that machinery and moulds account for nearly 70 per cent of the cost of setting up a plastics processing business, and that margins could be hit by 25-50 per cent, depending on the size of the business and the capital investment required.
There are over 5,000 injection moulding units across the country, of which over 50 per cent are in the small- and medium-sized category. India’s net polymer capacity is around six million tonnes per annum (mtpa), and Gujarat accounts for nearly 60 per cent of the net production. Industry insiders said that the net size of the sector could be Rs 70,000-100,000 crore.
The Finance Ministry has imposed definitive anti-dumping duty on imports of certain plastics processing or injection moulding machines from China. The levy will be in force for five years from May 12, 2009, the date on which the provisional anti-dumping duty was imposed. The announcement came at the end of last month.
The specified percentage ranges from 60 to 174 per cent, depending on the producer. Based on a petition filed by L&T Demag Plastic Machinery Ltd, Chennai, the Designated Authority in the Commerce Ministry had in 2008 initiated anti-dumping investigations on imports of plastic processing machines from China.
K K Seksaria, immediate past president of the Indian Plastics Federation (IPF), said that there are four or five major machine manufacturers in the country, including L&T, Ferromatik Milacron India Ltd, Electronica Machines and Windsor Machines. He added that there is a healthy demand for these machines as well as the injection moulding machine segment, which is clocking a 15 per cent growth rate. The All India Plastic Manufacturers’ Association has stated that the plastics processing industry grew by 20-25 per cent in 2009-10.
Doshi believes that as a result of the duty, imports from China could come down by at least 50 per cent, as processors would now increase sourcing from Indian manufacturers.
