"In order to manufacture plastic bags above 120-micron, our machinery needs to be upgraded, which will come at a cost. Manufacturers will have to invest in upgrading their manufacturing facilities. This will be an added cost, and making a fresh investment is not viable especially amid slowing demand since the pandemic," said Prerak Patel, president, Ahmedabad Plastic Manufacturers’ Association.
"If the new rules are implemented from September 30, many industries will be compelled to downsize or shut down production," said Patel.
Gujarat is home to some 5,000 plastic manufacturing units, of which 5% units will stare at a total shutdown, and many others will have to suspend operations, if the new rules are implemented, according to industry estimates.
According to plastic manufacturers, a manufacturing unit of plastic packaging requires a minimum capital of Rs 20-25 lakh, as not only the manufacturing but even the cutting and sealing machines will need to be replaced.
"Besides, existing equipment will need to be scrapped, which is a waste of prior investment. At a time when industries are facing a shortfall in revenue, absorbing additional infrastructure costs will not be possible. In fact, most units are micro small, and medium enterprises (MSMEs) and due to the drop in demand, they don’t even spend on routine upgrades unless necessary," said a manufacturer based in Ahmedabad.
Plastic makers have made a series of representations before the state as well as the Centre seeking to relax the norms and also provide an alternative to plastic before banning it completely. "We have urged the government to limit the ban to plastics up to 60-65 microns. We are hopeful that the government will take our appeal into consideration," said Bhagwanbhai Patel, president, GSPMA.
An increase in the thickness will add to raw material costs say plastic manufacturers. "Our costs of production will almost double raising the price of the end-product. This will also increase costs of packaging and other materials," said Patel.
Slump in demand hits plastic packaging sales: The proposed change in rules would be enforced at a time when the industry is already reeling from a revenue shortfall triggered by a reduction in demand. Shailesh Patel, ex-president, GSPMA, said, "Plastic packaging material and single-use plastic items are supplied widely to the hospitality sector, traders, food processing industries and other sectors. A decline in demand across most of these sectors indirectly impacted the sale of plastic materials too. The industry in Gujarat is currently operating at 70% of its total installed capacity, which clearly shows a decline in demand. The additional expenditure will cause a further decline in the industry’s revenues."
Industry demands uniform laws, focus on waste management: Manufacturers have demanded that the Centre imposes uniform laws across the country. "With implementation left to states, there is no uniformity in laws across different states. This puts manufacturers in a fix because there is no clarity on what to manufacture, and where to supply," said Pinkal Shah, a plastic manufacturer in Halol.
Pruthviraj Dhoka, president, Halol Plastic Association (HPA), said, "Most plastic manufacturers are MSMEs, and banning plastics will put employment and livelihood of thousands at stake. Instead, the government must focus on strengthening waste management rules."
(With inputs from Tushar Tere in Vadodara)
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