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

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India’s packaging industry is expected to witness outstanding growth during 2016–21 and reach $ 72.6 billion by FY20, growing at a CAGR of 18%, according to an ASSOCHAM-EY joint study.
 
The Indian packaging industry was about $ 31.7 billion in 2015. The growth is driven by key factors such as rising population, increase in income levels and changing lifestyles, a press release from ASSOCHAM, quoting the  report, said.
 
Increasing media penetration through the means of internet and television are fuelling the demand for packaged products in rural India as well, noted the study.
 
The release said 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), the  report said.
 
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 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, and so on.
 
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 municipalities and other urban local bodies (ULBs), formal private firms or the informal sector. While the municipalities/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 municipalities and the ULBs that have the highest responsibility towards waste management have a significant performance variation.
 
According to the report, 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. Taxes will be collected and maintained in a separate account by the government.
 
In addition to this, there can be a tax reduction slab as well, based on the quantity of plastics recycled by individual companies. The more they recycle, the more that tax is reduced. If the plastic industry collectively recycles more than 95% of the produced capacity, then they do not have to pay the taxes. Also, a separate tax can be levied on usage of virgin plastic material by the plastic industry. This will encourage them to extensively use recycled plastic in the products manufacturing.
 
Companies need to take care of end-to-end plastic waste management system and need not pay any additional charges to the government bodies. In addition to this, they have to report the plastic waste quantities, which are taken back from the market and recycled, and also produce a certification for the same at the end of every year.
 
NNN
 

(Our News Desk can be contacted at desk@netindian.in)

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