India’s packaging industry to touch US $72.6 bn by FY20: ASSOCHAM-EY study

India’s packaging industry to touch US $72.6 bn by FY20: ASSOCHAM-EY study
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Mangaluru, Feb 17: India’s packaging industry is expected to witness an outstanding growth during 2016–21, anticipated to reach the level of US$ 72.6 billion by FY20 growing at a CAGR of 18%, according to an ASSOCHAM-EY joint study.
The Indian packaging industry was about US$ 31.7 billion in 2015. The growth is driven by key factors such as rising population, increase in income levels and changing lifestyles. Increasing media penetration through the means of internet and television are fuelling the demand for packaged products in rural India as well, noted the joint study.
India generates approximately 0.025 MT of plastic waste every day. Out of this, 94% is thermoplastic content, which includes polyethylene terephthalate PET, low-density polyethylene (LPDE), high density polyethylene (HDPE) and polyvinyl chloride (PVC), all of this being recyclable. Thermoset plastics consisting of sheet molded composite (SMC), fibre-reinforced plastic (FRP), multilayered and thermocol forms 6% of the total waste generated that is non-recyclable.
India provides a strong market share for plastic and packaging companies (PPCs).
With an increased focus on urbanization and industrialization, the per capital plastic consumption in India in 2017 was 11 kg, according to ASSOCHAM-EY’s market research and data analysis. The percentage of plastic and rubber in municipal solid waste (MSW) has risen to 9.22% as compared to 0.66% in 1996, as per the Central Pollution Control Board (CPCB) data. By 2031, plastic waste generation will amount to 31.4 million tons per year.
According to the ASSOCHAM-EY analysis, the total demand of plastic in the economic cycle across industry sectors (packaging, building and construction, transport, electronics, agriculture, etc.) is 20 MMT. Out of the total demand, 15 MMT is being fulfilled by virgin plastic and the remaining 5 MMT is coming from recycled plastic which is about 30% of the total consumption.
Approximately, 45% of the 20 MMT of plastic (9.6 MMT) is immediately consumed and released as waste. The rest 55% (close to 11.4 MMT) is the growing stock which is used for a longer span of time products like batteries, bottles, etc.
There are close to 15 large industrial polymer manufacturers that produce virgin plastic. For the recycling players, there are approximately 4,000 unorganized and 3,500 organized units in the nation, highlighted the paper.
The worldwide total volume of plastic has reached 8.3 billion metric tons, the equivalent of more than 800,000 Eiffel Towers, according to the World Economic Forum (WEF). Approximately, 90% of the plastic waste ends up in the oceans and the biggest problem is that plastic takes several years before it gets biodegraded. Concerted efforts are being taken in more than 50 nations to reduce plastic pollution, according to an industry report.
The figure below shows that there has been an enormous rise in action in this area since 2014. Waste management in India involves several players that are part of the value chain. The responsibility of waste management is typically taken up by the municipals/ULBs, formal private firms or the informal sector. While the municipals/ULBs are low cost players they have less effectiveness as compared to the private and informal sector.
While the private sector can significantly improve the situation, it comes at a high cost. The formal sector succeeds on self-financing and is highly complex in its nature but ranks high on effectiveness. The municipals and the ULBs that have the highest responsibility towards waste management, have a significant performance variation.
The government can levy an environmental tax on all manufacturers of plastic bottles/multi-layered plastics (MLP), based on their production capacity and actual production, at the start of every financial year.