Indian Government Plans Plastics-Production Parks

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Researched by Industrial Info Resources (Sugar Land, Texas)--The government of India plans to set up plastics-production parks nationwide in a bid to regularize the small-scale plastic production units across the country. The move is primarily aimed at making the downstream processes of the petrochemical sector globally competitive.

It has been estimated that roughly 75% of the plastic processing plants in India function as independent small-scale industrial units. Under the new initiative, these units will be housed in central plastic-manufacturing parks in each state, based on the cluster model that is currently prevalent in the food processing, textiles and automobile sectors in the states of Gujarat and Maharashtra.

Each park will require an investment of about $42.7 million and approximately 100 to 150 acres of land. The parks will accommodate 100 to 200 plastic processing units and will have outputs of about 200 tons per month. The units will also be entitled to tax benefits and other incentives, as well as exemptions from excise, duties and sales tax. Common facilities such as infrastructure for effluent management, research and development, as well as help to market the output will be available within the premises of the parks.

In addition to the plastic-cluster initiative, sources from the Chemicals and Fertilizer Ministry of India have also urged industry majors to explore potential markets in Latin American, Africa and Commonwealth nations using the "focus market" scheme of the government of India. The ministry has also urged industry majors to increase finished good exports, which currently account for only 45% of total exports, while the remaining exports are primarily intermediates and raw materials.

India's plastic exports in the last fiscal year were about $3.6 billion, while those of China were reportedly about $22 billion. The huge difference in the export capacities are attributable to the fact that out of the 55,000 small, medium and large plastic units in India, most are mainly small-scale production units and are unable to execute large-scale export orders from overseas customers, which are automatically redirected to China.

The first of the plastic parks is expected to be built in a couple of years. A feasibility report on the venture has been submitted to the Planning Commission of India. The review process is expected to take two to three months. Meanwhile, the Chattisgarh state government has planned to set up a plastics-production park at Tilda, in the vicinity of capital city Raipur, while the Orissa state government is making plants for two clusters: an engineering cluster at Mancheswar, and a plastics cluster at Balasore under the Industrial Infrastructure Upgradation Scheme. With these initiatives in the pipeline, India is likely to look for a two-fold increase in plastics exports in 2010-11.

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