A Roadmap to Unlock Future Growth Opportunities of Plastic Processing Sector in North East India
Subodh Kumar
Deputy Manager, BCPL

Tamagna Ghosh
Deputy Manager, BCPL

Roseleen Ahmed
Deputy Manager, BCPL

Plastic Processing Sector has become the ubiquitous workhorse of the modern economy - manufacturing products with peerless functional properties and optimum cost. The uses of plastic products have increased ten-fold in the last two decades and is expected to double again in the next five years. While delivering many benefits, the current plastics processing sector has drawbacks that are becoming more apparent by the day. This sector offers a new vision and roadmap to overcome the boundaries of today's incremental improvements and fragmented initiatives which will align with the principles of the circular economy, to unlock future growth opportunities with an unequivocally systemic and shared approach. The aim of this sector is to move the plastics value chain into a positive spiral of stronger economics, capture value and better environmental outcome- while creating a shared sense of direction and igniting the spark of innovation. This article outlines the potential of the Plastic manufacturing sector to transform the scenario and thereby usher in the New Plastics Era of North-East India .

Globally, the manufacturing sector is changing rapidly, driven by changing trends and emerging technologies.

With the global petrochemical feedstock slate becoming more diverse, understanding the complex petrochemical markets has become essential in gaining a competitive advantage, and in order to understand the supply -demand scenario, the polymerproducing petrochemicals are digging deeper. It is important to track the global trade flows and keep in line with the longterm and short-term changes in the global and regional market .

The Indian plastic industry has a considerable involvement in the economic development of the country along with its association with the development of other key-sectors like construction, automotives, electronics, etc. The plastic processing sector is gaining notable importance, with developments in the petrochemical sector, and strengthening the capacities to cater the domestic as well as the overseas market. Development of various new applications has provided an impetus to the growth of the plastic industry, and with the growing demand in end-use industries for existing applications, the potential to contribute in bringing foreign investments has also increased.

The Indian plastics processing industry has grown at a CAGR of 10% in volume terms from 8.3 MMTPA in FY10 to 13.4 MMTPA in FY15 and is expected to grow at a CAGR of approximately 10.5% from FY15 to FY20 to reach 22 MMTPA. The current percapita consumption of plastics in the U.S. is 109 kg, 38 kg in China, 11 kg in India, and 4 kg in North-East region. While the outlook for plastics processing in the Indian subcontinent is positive, the industry still faces many challenges.

Figure 1: Overview of per capita consumption of plastics in North-East India with respect to global consumption

Figure 2: Growth in polyethylene and polypropylene capacities in India

Being tucked away in a landlocked corner with limited infrastructure and limited connectivity with the rest of India, the Petrochemicals & Plastic Industry in North-East India are exposed to changing environment, increased globalization of markets, public expectations for improved environmental performance, and the need for increased profitability and productivity. Usually petrochemical industries are primarily located nearer to sea-ports which facilitate coordinated and planned movement of goods and materials. The North-Eastern region has the inherent disadvantage of being located far away from any of the Indian sea-ports due to which supply of feedstock and materials from other parts of the country is a herculean-task which involves time and cost-overrun. On a positive note, the situation also created platform in making domestic downstream plastic processing industries more competitive thereby providing significant opportunity for entrepreneurs.

Changing landscape of Plastic Industry in North-East

Considering the economic and demographic features of the North-Eastern states, in comparison to the rest of the country, the prospects for increased consumption of polymer products than the present levels appear bright. Cross-border trades with Myanmar and Bangladesh, and the India– Myanmar-Thailand Trilateral Highway which is expected to be a boon to the growth of the polymer sector in the NE region, all offers immense trade potential for the NER in the years to come.

Domestic manufacturing is now being promoted through a new policy of the Government for setting up National Investment and Manufacturing Zones (NIMZs) which are a combination of production units, public utilities, logistics, residential areas and administrative services. Keeping in line with the Centre's vision of Hydrocarbon-2030, the government has called upon entrepreneurs to invest in plastic industry. The government has also passed the Easeof-Doing Business Bill-2016, creating possibilities of a single -window clearance system for fast-tracking business projects in the state. The focus is on promoting and attracting plastic-based downstream industries which will not only bring in large amount of investments but also generate huge employment opportunities and socioeconomic development in the region.

Opportune Moment to Act is Now

The plastic industry in the region, at present, is witnessing a dramatic transformation from a low-profile production base accounted for by the local entrepreneurs, to a scenario in which the major-players in the field in the country are focusing on investments opportunities in the region. The major petrochemical players in the region are committed to establish significant presence in the north-east region in petrochemical sector by way of production or sourcing and marketing of quality products, deploying efficient distribution and marketing channels to cater to the needs of target customers. Opportunity of exporting desired PE/PP grades in the adjoining countries is also being explored for expanding market footprints of the Plastic Industry in next few years.

Figure 3 : Key growth drivers for North-East

Coupled with local availability of raw material, campaigns like "Startup -India" launched by the Government are expected to give a further boost to setting up of plastic-processing units in the region. An integrated plastic -park is being set up at Tinsukia, Assam, which is expected to attract entrepreneurs to setup downstream plastic processing units to utilize the polymers produced in the region. The market prospects in the region are promising with around 136 plastic processing industries consuming approximately 1.1 lakhs TPA of polymer which was earlier sourced from outside the region.

With the implementation of economic reforms, India's overall outlook remains positive with a GDP of approximately 7%. This is a positive indication for the Polymer sector, which plays vital role for growth on the overall economic development. In the journey towards sustainable production, the existing petrochemicals have formulated souring and marketing strategies towards "Make-in-India" through boosting entrepreneurship, technology and research and development along with unlocking latent demand in downstream industries.

New Plastics Era Demands New Way of Thinking

An organized development addressing cost-effective plastic processing along with streamlining operations of plastics could pave a growth path for downstream plastic manufacturers in North-East India. Demand for performance plastics such as biodegradable polymers is expected to be on rise across the world including India. Focus areas are going to be modern farming through Plasticulture, packaging for processed food & non-durables, better plastics for Automobiles, infrastructure development, innovative products for Telecommunication and IT sectors. Plasticulture can significantly benefit agriculture by its wide applications in all the areas of farming. It can be used to tackle the specific problems faced by North-East regions.

In order to move beyond small-scale and incremental improvements, and achieve a systemic shift for unlocking the future growth opportunities, existing improvement initiatives would need to be complemented and guided by a concerted collaboration initiative that matches the scale of challenges and opportunities. Standard protocols needs to be established built on the following elements:
  • Continuous efforts to develop and facilitate adoption of globally recognized standards.
  • Redesigning a set of clearly defined collection and sorting archetypes, allowing for continued innovation and regional variation.
  • Developing insights and building an economic and scientific base which accesses the socio-economic impact of the plastic materials.
  • Engaging policy-makers, in a common vision towards a more effective system, and provide them with relevant tools, data and insights related to plastics processing.
  • The leading stakeholders need to come together and define "moon-shot" innovations: which are focused and have practical initiatives with a high potential for significant impact at scale.
Most of the actions listed above require a collaborative effort and in order to accelerate or improve the impact of these actions, a number of considerations must be contemplated to identify the most efficient and effective implementation approach. These considerations may also include acknowledging the pace of cultural change in North-East Regions, and tailoring solutions for SMEs. The agility and specialization of SMEs will be critical in achieving the visions for North-East Regions and while implementing the suggested actions, it is important to ensure solutions are valuable and accessible to SMEs.

Transforming North-East Petrochemical and Plastic Industry for sustainable competitiveness is not a short-term process, and a consistent and supportive policy environment is required over the next decade to provide businesses with stability and allow them to execute longterm strategies. Significant efforts are being made by all the stakeholders to realize the real potential of this industry, and position the North-East Petrochemical and Plastic Industry as a eminent economic player in the region.