2016 Indian Plastic Industry Market Analysis For more details, please contact, Fatima, Principal Advisor SAATRA Capital Advisory LLP [email protected] www.saatra.com Market Analysis Table of Contents INTRODUCTION ................................................................................................................ 3 Preface .................................................................................................................................... 3 Background ............................................................................................................................. 4 PLASTIC INDUSTRY ........................................................................................................... 5 Plastics Overview ..................................................................................................................... 5 History ............................................................................................................................................ 5 Raw Materials ............................................................................................................................. 6 Characteristics of Plastics ...................................................................................................... 6 Type of Plastics ............................................................................................................................... 7 Production Processes ..................................................................................................................... 8 7 Major Plastics - Classification ...................................................................................................... 9 Plastics - Usage and Application ................................................................................................... 19 INDIAN PLASTIC INDUSTRY ............................................................................................. 20 Structural Drivers for Sustainable Growth of Plastic Industry................................................... 20 Evolving Plastics Scenario ....................................................................................................... 21 Achievements of Indian Plastic Processing Industry .................................................................... 21 An Insight into the Indian Polymer Industry ................................................................................ 21 Technology Trends in the Indian Plastic Processing Industry .................................................... 23 Downstream industry: Methods of plastic processing ................................................................ 23 Plastics Market Analysis ......................................................................................................... 26 Market Size ................................................................................................................................... 26 Import-Export Scenario ................................................................................................................ 27 Demand Supply Scenario ............................................................................................................. 28 Opportunity .................................................................................................................................. 30 Trends and Outlook of the Plastics Market .................................................................................. 31 Market Growth Drivers ................................................................................................................ 31 Challenges in the Indian Plastics Industry .................................................................................... 34 FUTURE PROSPECTS – INDIAN PLASTIC INDUSTRY ........................................................... 36 Emerging Applications of Plastic ............................................................................................. 36 Automotive ................................................................................................................................... 36 Textile fibers ................................................................................................................................. 36 Flexible packaging ........................................................................................................................ 36 Light-weighting ..................................................................................................................... 37 Recycling & Waste Management of Plastics ................................................................................ 38 Dynamics Driving Growth in the Indian Plastic Market ............................................................ 40 Other Factors Driving the Indian Plastic Industry ........................................................................ 41 Indian Plastics - Vision 2020 ......................................................................................................... 41 Replacement Opportunity ...................................................................................................... 41 Short-term Opportunity ............................................................................................................... 41 Long term Opportunity ................................................................................................................ 42 Future of Plastics Market ....................................................................................................... 43 Indian Plastic Market 2020 ........................................................................................................... 43 India – Enormous Untapped Potential ......................................................................................... 44 APPENDIX....................................................................................................................... 46 Plastic Bags Fact Sheet ................................................................................................................. 46 Plastic Bags ............................................................................................................................ 47 History .......................................................................................................................................... 47 Market Analysis Production .................................................................................................................................... 48 Manufacture and Composition .................................................................................................... 48 Biodegradable Materials .............................................................................................................. 48 Types of Plastic Bags .................................................................................................................... 48 Environmental Concerns .............................................................................................................. 49 Opportunity .................................................................................................................................. 49 Reduction, Reuse and Recycling ................................................................................................... 49 Bag Legislation .............................................................................................................................. 50 Issues ............................................................................................................................................ 52 Ban or Tax or What? ..................................................................................................................... 53 The Downfall of the Plastic Bag: A Global Picture ........................................................................ 54 Quick Facts ................................................................................................................................... 57 Campaign Against Plastic Bags ..................................................................................................... 58 Market Analysis INTRODUCTION Preface This report attempts to provide an overview of the Indian Plastic Processing Industry, its growth prospects, challenges faced and emerging applications of plastics in the market. it also highlights select strategic initiatives to bring about a rapid development of this industry. The Indian Plastic Industry gained momentum in early 1990's when the economy opened up with liberal industrial policies. Further impetus was added with investments in raw material production from mid-1990's onwards. This further fuelled investments in plastic processing industry as well as downstream machinery sector. In the last decade, a number of emerging applications of plastics have been developed in many industries for e.g. in Automotive, Packaging, Agriculture, Textile etc. which have changed the day to day lives of the people. The industry has produced better and improved quality of plastics with the help of new technologies especially in the packaging industry leading to replacement of several materials such as wood, metals, glass etc. Currently, in India, there is a greater presence of plastics in the packaging industry with 43% penetration as compared to a world average of 35%. On the other hand, the agricultural sector