Hike in raw material costs hits Kerala’s MSME plastic units

Our Bureau Kochi | Updated on March 09, 2021

Many small and medium enterprises are on the verge of closure

The plastic manufacturing industry in the State has voiced concerns over the surge in raw material prices as it has hit several MSME manufacturing units.

Kerala Plastic Manufacturers Association’s President Balakrishna Bhat Kakkunje and General Secretary MS George pointed out that petrochemical companies, including PSUs, have exponentially raised the raw material prices by 50 to 155 per cent in the last six months. The lack of availability has forced the plastics industry to procure raw materials from the open market by paying an extra cost of ₹15 to 20. The increase in raw material costs has started impacting the prices of plastic pipes, drip irrigation systems and woven sacks. Toy makers are also facing the brunt, they said, adding that many manufacturers are not in a position to cater to the export orders under the present circumstances.

Sharp rise in polymer prices hit MSMEs

It was pointed out that many small and medium enterprises in the State are on the verge of closure. There are around 1,300 units, especially in the MSME sector that provides direct and indirect job opportunities to over a lakh people. Due to the scarcity of raw materials, most units are utilising less than 50 per cent of their working capacity.

The rise in raw material costs and its acute shortage in the open market are leading to escalation in project costs and are adversely impacting the cost competitiveness of MSMEs. Other sectors that use plastic products as raw materials are also witnessing a significant rise in production costs.

The association urged the Centre to ask public sector oil marketing companies to streamline the supply of raw materials at fair prices. They also urged the government to ban the export of raw materials for a period of one year.

Published on March 09, 2021

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