India’s ascent in the plastics industry

"India will rise to become the world's third largest plastics producer by 2010. Already Reliance Industries is a major player here. And Asian markets has the highest growth potential," said Mr. Helmar Franz, member K 2001 Exhibitor Council.

Making a presentation about K 2001, the 15^th International Trade Fair Plastics and Rubber, to be held in Dusseldorf from October 25 to November 1, 2001 he said the demand for plastic materials is expected to grow by 5.3 per cent over next decade. This according to him would put the total global demand for plastic materials at over 250 million tonne a year by 2010.

"By then the total consumption in South East Asian markets will have far outstripped that of North American and Western Europe," he added.

When one compares the per capita plastics consumption of Asian countries, the huge potential to be tapped is evident. While some 100-170 kg of plastics and rubber are used per capita in the major European economies, in Japan and the US this number is just 90 kg, in Singapore, Malaysia, Australia and New Zealand accounting for 70-80 kg.

The consumption is much lower in Thailand, China and India at 30, 10, and 13 kg respectively.  This potential is what is enticing investors to announce fresh commitments in South East Asian region. As major user industries like automobiles, consumer durables and electronics now becoming really global, it is but natural for them to look for suppliers to supply locally.

According to Mr. Franz, over the past thirty years, per capita consumption of standard plastics has grown at just about twice the rate of GNP in Germany, an average2.2 times as fast in industralised nations, around three times the rate in threshold countries and over 3 to 4 times in most developing countries.

On the other hand, demand for traditional materials like paper, cardboard etc registered slower growth while demand for steel in fact declined.

Main contributors to the rise in standard plastics consumption are polyethylene and polypropylene while polystyrene and EPS and PVC lagged slightly behind, Mr. Franz added.

Citing the mergers and acquisitions in the plastics industry - BASF and Shell Polyolefin, the linkup of BP, Amoco and Arco and their cooperations with Solvay, the mergers of Dow and Union Carbide, TotalFina and Elf as well as Chevron and Phillips plus the merger of polyethylene activities of Mitsubishi Chemical, Sowa Denko, Tonen Cheical and Nippon Petrochemicals etc - he predicted that similar trend in standard plastics PVC, polystyrene and technical plastics industry. Consolidation of raw material manufacturers has its impact on compounding industry as well. " A few months ago M.A, Hanna and Geon joined forces and created PolyOne, the world's largest compounding company,
Vopak took over Elis & Everard and further mergers are sure to follow," Mr. Franz predicts.

Again citing the International Rubber Study Group report he remarked that natural and synthetic rubber reached a processing volume of 18 million tonne last year, 7 per cent more than in 1999.

Asia accounting for more than 40 per cent of world's rubber consumption, the demand for rubber grew by 8 per cent to 7.9 million tonne during 2000.

The increased plastics consumption globally – 140 million tonne in 1999- and rubber has its beneficial effect on the respective machinery industries. Demand for plastics and rubber-processing machines remained high in the past two years. Germany, Italy, France, Austria and Switzerland accounts for 60 per cent of the world trade in this sector. Japan, USA and Canada are other exporters of plastics machinery.