The Hindu Business Line : Plastic producers cry foul over rise in raw material prices

Mumbai, June 19 About 20 plastic manufacturers’ associations from across the country held a meeting with Reliance Industries officials to register their protest against frequent price rise in polymers, raw material for plastic manufacturing.

Market share

Reliance Industries commands over 75 per cent of market share and plans to double its capacity.

Polypropylene prices were revised nine times between May 2 and 31 from $1,405 a tonne to $1,610, a jump of about 15 per cent. The inconsistency in pricing has pushed nearly 100 small units in Pune to shut shop.

Mr Raju D. Desai, President, All-India Plastics Manufacturers’ Association, said the uncertainty in raw material had hit the industry hard. Manufacturers are finding it difficult to negotiate deals with buyers.

“Reliance was supposed to hike price on Wednesday, but it was withheld. We had made it clear that they should honour their commitment on supply,” Mr Desai said.

Interestingly, the contracts that are signed between suppliers and manufacturers have a provision for price revision, but still the companies prefer to stop supply, he added.

Polymers are petrochemical products used for producing a variety of products right from life-saving surgical, agricultural products, FMCG consumer durables and packaging foods, furniture and automobile. The recent rise in crude oil prices has increased cost of polymer production.

No shortage

India produces about 5.6 million tonnes (mt) of polymer while the domestic demand is 5.1 mt. GAIL and Haldia Petrochemicals, the other suppliers, could not attend the meeting.

Plastic manufacturers should urge the Government to probe whether there is a cartelisation among the polymer producers. It is high time we had a regulatory authority, considering that there are many small and tiny manufacturers involved in the plastic industry, said Mr B. Swaminathan, committee member, Tamil Nadu Plastic Manufacturers Association.

There are about 50,000 registered plastic units employing more than 35 lakh people and contributing about Rs 8,000 crore to the exchequer. Manufacturers should also take up imports on a regular basis to keep the supply chain well oiled, he said.

Import duty

AIPMA has urged the Government to abolish the five per cent import duty on polymer and impose a duty on its exports, as it was done in the case of cement and steel.

The Government should withdraw anti-dumping duty on PVC, polystyrene and other polymers and allow import of industrial scrap under open general licence. Mr Kailash Murarka, Secretary of AIPMA, said spiralling prices coupled with uncertain deliveries lead to failure in our commitments to customers.

More Stories on : Plastics | Reliance Industries Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page