Polymer demand outstrips GDP / Third largest consumer after China, US / GlobalData report
Demand for polymer in India has grown rapidly over the past decade, outstripping growth in the country’s gross domestic product (GDP), market research group GlobalData
(London / UK; www.globaldata.com
) says in its report “Polymer Industry in India”. While GDP grew at a combined annual growth rate of 7.6% from 2000 to 2011, polymer demand saw an impressive upturn of 9.1%, despite a dip in recession year 2008 and a less pronounced slowdown in 2011. As India’s long-term economic outlook is positive, the strong upward trend is expected to continue, the researchers say.
India is the third largest consumer of polymers worldwide, GlobalData says, behind China and the US. Its share of consumption rose from 3.5% in 2000 to 5.7% in 2011, driven by rapid urbanisation and industrialisation. Commodity plastics account for the lion’s share of polymer demand on the sub-continent. Consequently, most capacity additions in recent years have focused on PE, PP, PVC, PET and styrene-butadiene rubber (SBR), which together account for more than 90% of output.
Packaging and automotive are key demand drivers
The packaging and automotive sectors are the growth drivers of India’s polymer industry. Packaging currently accounts for more than half of demand, and is showing “huge growth potential,” the report says. The processed food industry alone is thought likely to grow to a value of USD 30 bn in 2015. “Plasticulture,” the use of plastics in agriculture, is currently playing an important role in widening polymer consumption as India struggles to improve its food production. The country’s National Mission on Micro Irrigation (NMMI) scheme, which provides financial aid to implement irrigation techniques, is expected to be an important impetus for consumption.
India’s automotive industry, another major consumer of polymer, is one of the world’s fastest growing. Over the past five years, output of new automobiles doubled from 9.5m units in 2006 to 18.2m units in 2011. Demand from this industry is boosting consumption of PP and SBR in particular, GlobalData notes.
Processed plastics a promising export business
With increasing investment in the plastics processing sector, exports of plastic products are “growing at a phenomenal rate,” the research group says, adding that this has improved efficiency. The export value of processed plastics has doubled over the past five years, rising from USD 1.1 bn in 2006 to an estimated USD 2.3 bn in 2011. Most of the investment in this sector is seen to be taking place in extrusion moulding, which GlobalData says accounts for about a third of plastics processing capacity in India.
Growth in Indian plastics consumption is also being boosted by government promotion schemes. Special petrochemicals/plastics investment clusters have been set up to help integrate the supply chain. The polymer industry is also expected to benefit from the recent approval of 100% Foreign Direct Investment (FDI) in the food processing sector, which is expected to bolster demand for packaging materials. The Automotive Mission Plan (AMP) also will create demand from the automotive sector. The plan has set an investment target of USD 40 bn by 2016.
For more information, see "Polymer Industry in India - Export Opportunities and Promising Growth in Domestic Packaging and Automotive Sectors to Drive the Demand
", GlobalData 2012, Contact: Kevin McHugh
, Tel: +44 (0) 1204 543528 or e-mail email@example.com
19.07.2012 Plasteurope.com [222866-0]
Published on 19.07.2012