Plastic units turn traders of Chinese stuff

If you can't beat them, join them. That's exactly what plastic manufacturers in Maharashtra are doing. They've become traders and are importing unbranded Chinese, Korean and Malaysian plastic products.

Many such manufacturers still continue to make plastic products, though they've scaled down production. Says Mohan Jain, president of the All India Plastics Manufacturers Association and proprietor of the Mumbai-based Indo Plast: "Manufacturers are working at 60 per cent of their production capacities."

But manufacturers say that that it is more cost effective to import unbranded finished products from mainland China. They then pass these off as their own products.Kekin Thakkar, whose firms Colour Concentrate Corporation and Polyprocessor manufacture colour master batches, a mixture of plastic raw materials and colour pigmentation that is used to colour plastic products, and polypropylene woven sacks, respectively, is talking to companies in China and Europe.

"I am in contact with manufacturers in China and Europe for the import of these products. The landed cost of imported colour master batches is 15 to 16 per cent cheaper than the manufacturing cost of Rs 110 to Rs 115 per kilogram in our local industry," Thakkar says.

Similarly, for high density polypropylene woven sacks (used widely for packaging cement and fertilisers) the manufacturing cost in India is Rs 66 to Rs 67 per kg. But when imported from China or Korea, the sacks have a landed cost of less than Rs 60 per kg, Thakkar says.

Another plastic manufacturer has been importing BOPP film and high density polypropylene woven sacks. "As a result of the restrictions placed by the South Asian Association for Regional Co-operation on HDP sacks, Nepal is able to import them at a negligible duty. So traders from Nepal are able to simply flood the Indian market to our detriment. I had no choice but to import to survive," he says.

The import duty on most plastic raw materials and finished goods in India is, on an average, about 30 per cent Yet manufacturers of plastic products find it cheaper to import them than to produce them here.