Rubber and plastic are two completely different commodities, both in terms of their composition, as well as their applications. But, both are equally important in our daily lives, be it within a household or out of it. Their usage, instead of slowing down, is actually going up by the day.
When it comes to rubber, India ranks 4th in its production and is one of the rubber giants of the world.
When it comes to rubber, India ranks 4th in its production and is one of the rubber giants of the world. Rubber is very diverse in its usage. It is extensively pervasive in many different fields. The utility of rubber is extremely widespread. Be it houses to industries, raw materials, intermediate goods or finished goods. Rubber is needed at every step of the way. Tires and tubes, for instance, are the biggest buyers of rubber. Rest of the rubber production is claimed by various other products such as footwear, camel backs, hoses and even belts. The tires and tubes are further divided into the ones used for auto and bicycle. The numbers indicating the growth of rubber industry are only expected to bloom further. These will increase by 8 percent to be exact. The scope for further bloom is immense, as technology is on the rise and so is machinery, which can further fine-tune rubber into more diverse products.
Plastic is also known as the material of the modern generation. It came into the limelight much later, somewhere in the late 1980s. But, it caught onto the bandwagon rather quickly and is today a very popular material. As the environment protection units came into the light, the restrictions on tree cutting for wood increased. Hence, plastic started getting a lot of attention, thanks to its feather light weight, the ease of its maintenance and the natural glimmer it seems to possess. In just a few years, plastic started replacing wood, some metals and also glass. Plastic is extensively used in the automobile industry. Thanks to the bloom of vehicles, plastic has become a force to be reckoned with.
Plastic can further be divided into:
- Thermoplastics, which include elastomers, the popular PVC, the majorly used polythenes and various other resins.
- Thermosetting, Once again include elastomers, cross linked polythene, phenolic and various forms of polyesters.
Plastic is not the humble world of carry bags anymore. It has expanded far and beyond. Various applications including, but not limited to packaging, moldings, automobiles and telecom etc. are lot part of the plastic universe. Many electric appliances, decorations, fittings and equipment also make extensive use of plastic. Various other full-fledged fields such as medicine and even horticulture need plastic to make their day-to-day operations easier.
Polymers have made a place for themselves in the lives of most individuals, as they are ideal containers which can wither almost all sorts of weathers. India is thriving in the world polymer market and is close to being the 3rd largest world producer of polymer. The demand is growing at an unprecedented rate and the market is hot for any and every individual wanting to set up a business in this field.
Plastic Industry In India
Plastic Industry is taking a very significant part in the contribution of the progress of our country. It has contributed greatly to different sectors in the country such as Automotive, Construction, Electronics, Healthcare, Textiles, and FMCG etc. The plastic industry contributes to almost every daily requirement which is clothing, housing, construction, furniture, automobiles, household items, agriculture, horticulture, irrigation, packaging, medical appliances, electronics and electrical items Plastic Industry grows in the huge regional diversification of India, Western India accounts for 47%, Northern India for 23% and Southern India for 21%. Per capita consumption of the plastic Industry is increasing heavily.
A wide variety of plastics raw materials are produced to meet the material needs of different sectors of the economy. These polymeric materials are broadly categorized as commodity, engineering and specialty plastics. Commodity plastics are the major products that account for bulk of the plastics and in turn for petrochemical industry. Commodity plastics comprise of Polyethylene (PE), Polypropylene (PP), Polyvinyl Chloride (PVC) and Polystyrene. While engineering and specialty plastics are plastics that exhibit superior mechanical and thermal properties in a wide range of conditions over and above more commonly used commodity plastics and are used for specific purpose. These include styrene derivatives (PS/EPS & SAN/ABS), polycarbonate, poly methyl methacrylate, polycarbonates, poly oxy methylene (POM) plastics etc.
There are three broad types of PE, viz: Low-density Polyethylene (LDPE), High-density Polyethylene (HDPE) and Linear Low-density Polyethylene (LLDPE). Major plastic materials like PE and PP are derived from Ethylene and Propylene respectively, while other plastics such as PVC, PS & ABS and PC are produced from benzene, butadiene and other feedstock.
India’s plastic has grown 13% annually in the last 5 years and similar growth is expected even in the future. There are over 30,000 registered plastic processing units. Number of plastic processing units in India is as high as 30,000. Growth of the Plastic industry is at a CAGR of 10% in volume from 8.3 MMTPA in financial year 2010 and in Financial year 2015 it was 13.4 MMTPA, and looking at the growing potential in future it is estimated to bloom at a CAGR of around 10.5% to gain 22 MMPTA from financial year 2015-2020. However, for a long time, India’s plastic Industry is facing a huge domestic demand crunch which is affecting over 4 million people employed under it. Per capita consumption of plastic at 11 kg is much lower than the per capita consumption of plastic in China and many other countries.
Packaging industry in India has seen a strong penetration of plastics as compared to global standards. However, agriculture sector still hasn’t explored the benefits of plastics to a large extent. Global average for plastics demand in agriculture is ~8% while India is substantially lower at only 2%.
Plastics are the major product that account for bulk of the Indian petrochemical industry.
India offers strong opportunity for manufacturing of petrochemicals in future with its plan to increase the share of manufacturing in GDP from 16% to 25% by 2022. The increasing demographic dividend, urbanization, growing income levels all support a strong case of increase in both demand and supply of petrochemicals in India. Plastics are the major product that account for bulk of the Indian petrochemical industry.
Exports of plastic finished goods have more than doubled in the last 5 years from ~$1.2 Bn in 2007 to $2.7 Bn in 2012. But fierce competition from countries such as China, Indonesia, Taiwan and other South Asian countries are restricting growth. The exports of these value added plastic products could be a huge growth opportunity if Indian manufacturers can increase/ maintain their manufacturing competitiveness while ensuring high quality.
Global plastics packaging market to hit $399.44 billion by 2023
The plastic packaging market was valued at USD 318.92 billion in 2017 and is expected to reach a value of USD 399.44 billion by 2023 at a CAGR of 3.44% over the forecast period of 2018–2023. The scope of the report is limited to solutions offered by major players, including providers of plastic pouches, bags, wraps, bottles & jars. While the regions considered in the scope of the report include North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.
Owing to its increasing usage across a wide range of industries such as food & beverage, healthcare, cosmetics, and other consumer goods, plastic packaging has become an essential, with its usage growing broadly in line with the global economy. Growth in the demand from retail industry, increasing dual-income households, rising demand for PET bottles in soft drinks and bottled water markets are the factors driving the market. In 2016, around 485 billion PET bottles were produced worldwide, and it is forecasted that it would reach 583.3 billion in 2021. Moreover, rising need for increased shelf life and consumer preferences towards convenient packing solutions, consistent substitution of traditional metal, glass materials in food and other markets, increasing incursions by packaging into food markets, such as in the case of meat, fish, and poultry products are further positively impacting the market. However, government regulations concerning the environmental safety are hampering the spread of plastic packaging.
The plastic packaging market around the world is expected to gradually favor the use of flexible solutions over rigid plastic materials owing to several advantages they offer such as better handling and disposal, cost-effectiveness, greater visual appeal, and convenience. The manufacturers of plastic packaging products are continuously trying to adapt packaging designs to cater to different requirements of the consumers, as each retail chain has a different kind of approach toward packaging. The FMCG sector is expected to further bolster the demand for flexible solutions, by ensuring wide adoption in the food & beverage, retail and healthcare sectors. The demand for lighter forms of packaging and greater ease of use is expected to drive the growth of flexible plastic solutions, which, in turn, may become the asset for the overall plastic packaging market.
The global polymer industry is expected to grow with a CAGR of 3.9% over 2015-2020. The demand for polymer is driven by growth in end use markets, such as packaging, automotive, infrastructure, transport rails, and telecommunication mainly from emerging economies. Polymer is continuously substituting metals, glass, paper, and other traditional materials in various applications due to its lightweight and strength and the design flexibility they offer brand owners along with low-cost. Thermoplastics segment is expected to witness the highest growth over the next five years. Increasing applications of engineered plastics in various fields, such as construction, automotive, and industrial manufacturing equipment to mechanical engineering is expected to drive this market.
The Indian polymer industry made a promising beginning in 1957, but its growth era started after economic liberalization which facilitated the growth of the major polymer end-use sectors. The Indian polymer industry grew at an impressive rate from 2000 to 2011 to become the world’s third largest consumer of polymers after China and the US. Most of this growth has been driven by the packaging sector which is the largest consumer of polymers worldwide. With a rapidly growing economy and the increasing spending power of the Indian middle class, the packaging sector is expected to grow further and create a higher demand for polymers. The automotive sector also is one of the fastest growing polymer end-use sectors and is expected to maintain its growth rate in the future. Plasticulture will be the emerging sector which will drive polymer demand over the next five years. Government support has been crucial for polymer industry growth. The government’s decision to allow 100% foreign direct investment in the processed food industry will drive the demand from the packaging sector. The national mission on micro irrigation will also help popularize plasticulture in the long term.
Replicating the growth in gross domestic product, polymer demand in India grew from 3.459 Million Metric ton per annum (MMtpa) in 2000 to 9.013 MMtpa in 2011 at a Compound Annual Growth Rate (CAGR) of 9.1%. Strong growth in the packaging and automotive sectors will drive the demand further to 14.315 MMtpa in 2016. To meet this growing demand, India increased its polymer production from 3.568 MMtpa in 2000 to 7.377 MMtpa in 2016. Production is expected to increase to 11.575 MMtpa in 2016. India’s processed plastics exports have also grown in the last five years to reach to $2.323 billion in the fiscal year ended 2011. As the investment in the processed plastics industry gradually increases, the scale of operation will also increase. This will result in a larger and more efficient processed plastics industry to complement the upstream polymers industry.
Rubber industry is more than 100 years old. Industrial rubber industry is dominated by one major product tires. Tires are used in large numbers on bicycles, trucks, aircrafts, and automobiles. Automobile tires, inflatable rafts, conveyor belts, rain coats and waterproof cloth tents are produced by impregnating fabrics with rubber, using calendaring process. Molding is another important process in the tire production. Tires are the principal product of industrial rubber industry. It accounts for approximately three-fourth of total rubber tonnage.
Production of rubber goods comprises of two stages- first stage is the production of rubber, either by the natural rubber (which is an agricultural crop) or from the petroleum products. Second stage is processing of the rubber so produced into the finished goods form. Processing of rubber into the finished goods like tires and other products is usually designated as rubber industry. Synthetic rubbers are produced from petrochemicals by polymerization method.
Rapidly growing automotive sector in developing economies and increased demand for high-performance tires, sealing products, and tire adhesive are expected to contribute to the growth of the global industrial rubber market. As on date, Asia Pacific is the largest producer and consumer of industrial rubber, with its tire sector exhibiting promising growth rate. Manufacturers have shifted their production facilities to emerging economies, due to the low labor and operating costs.
In the industrial rubber industry, construction market is estimated to post the strongest gain during the forecast period. Other construction-related products like rubber roofing are projected to register the healthy growth. Mechanical goods is expected to account for the largest share of total demand. Suppliers of hose and belts will gain benefits from increased consumer demand of the durable goods, particularly machinery and equipment.
In terms of region, Asia Pacific lured most of the demand for industrial rubber products in 2016, accounting for over one third of the market share in 2016. This is attributable to the flourishing automotive and construction sector, favorable government policies for auto manufacturers, and the shifting of the production facilities by major players due to the low labor and operating costs. The industrial rubber product market in Europe is likely to contract marginally during the forecast period. This is because the European economy is in the recovery phase and the region is a mature market for industrial rubber products. North America is expected to witness moderate growth during the forecast period. The significant contribution from the U.S., which is considered as the biggest market for mechanical rubber goods and increasing use of rubber products such as blow-out preventers, packers, and seals in the oilfield application in the region is expected to drive the demand for industrial rubber products in North America in near future.
Key players profiled in the Industrial Rubber Products market include Bridgestone Corporation, Cooper Standard Inc., Continental AG, Freudenberg Group, The Goodyear Tire & Rubber Company, HEXPOL AB, Gates Corporation, NOK CORPORATION, Sumitomo Riko Company Limited, Eaton, Myers Industries, Inc., and Yokohama Rubber Co., Ltd. Continental AG concluded acquisition of Veyance Technologies Inc to increase the proportion of revenue from non-automotive business. Companies are seeking to minimize their dependency on automotive sector and expand product portfolio for other industries.
Key challenges before rubber industry in India
The large units segregated, the constituents of the Indian rubber industry are in a general sense MSMEs. A part of them, particularly the micro units are yet to be in the perfect technique of preparing in the fast changing scene of business. Against this backdrop, the challenges are chiefly operational challenges, innovation needs, technology priorities, investing for the future, new product development, marketing challenges, talent management, material costs – mastering the volatility, price reduction pressure, rising labour costs, inventory management, order fulfilment strategies, stiff competition, transportation / logistic costs, becoming environmentally viable, and so forth. Get the job done to state, the critical test is to impact a positive development of the Indian rubber industry into an astute production line of the world – a class of its own – to the bigger idea of Industry 4.0.