Plastics processors panic because BIS is delaying clarity about quality standards for implementation
India’s plastics processors have panicked because of uncertainties about the deadline for the binding implementation of the BIS quality standards (Bureau of Indian Standard).
Many processors have stopped placing orders for polymer imports for fear of hurdles in customs clearance in ports if the shipment comes after the planned implementation of the BIS quality standards on October 15th, the government’s quality control agency has neither accepted nor rejected the demand.
The plastics processing industry will be hit hard by the delay in clarifying the BIS. Usually, plastics processors keep the raw material stocks for a month of their consumption. However, the raw materials pipeline is empty today as there is a lack of imported material as domestic processors have started to source goods for their daily needs.
“We have applied for an extension of one year. We hope the government gives us a year, otherwise thousands of plastics processing plants would have to close, which would eventually leave many people unemployed, ”said Chandrakant Turakhia, president of the All India Plastics Manufacturers Association (AIPMA). to polymer update.
Thousands of plastics processing companies, mostly in the category of small and medium-sized enterprises (SMEs), are currently working with systems and machines that are decades old; and ancient technology. The mandatory implementation of the BIS quality standards would force them to upgrade their systems and machines, which would cost them several million rupees.
“Since the outbreak of the coronavirus pandemic (Covid-19) in early 2020, most of these processing units have remained closed due to lockdowns. Although they have been brought back into operation, their low economies of scale mean that they cannot invest a lot of money in modernizing the plants. Unfortunately, due to their poor balance sheet over the past two years, banks and financial institutions would not host them either. Given some time, their financial situation would definitely normalize, which will encourage them to invest in upgrading the facilities, ”Chintan Sanghvi, director of Luckystar International, told Polymerupdate.
In order to add fire to the fire, manufacturers of primary polymers have increased their product prices exorbitantly due to the sharp increase in demand from local plastics processors. This has increased the working capital needs for small and medium-sized businesses. Processors who require small quantities of raw materials have to pay the dealers premiums above their base prices set by the primary producers.
“The polymer import only takes place for certain special materials. For general purposes, low density polyethylene is only imported in small quantities. Laminating film is currently in short supply in India and is therefore imported. There is no shortage of polymer availability in India, ”said Turakhia.
Ironically, foreign exporters are also waiting for clarification on how to register with the BIS. At a time when a gradual easing of Covid lockdown norms is being announced to get the economy back on track, uncertainty will inevitably have a big impact on trade.
According to Turakhia, both the production and consumption of plastic materials would decline in a month if the BIS did not clarify its position on the mandatory quality standards for implementation.
After the government announced the ban on single-use plastics, the consumption of paper glass suddenly increased. However, paper glass must be laminated with plastics. Films used in paper glass lamination are made in India in minimal quantities and are therefore imported in large quantities. The cessation of imports will inevitably affect paper glass consumption in India, added Mr Turakhia.
“The demand for value-added products that are imported has suddenly skyrocketed. There is no quality standard for imported value-added products. We have therefore urged the government to introduce a quality standard for value-added products that will help reduce imports of spurious materials before establishing a quality standard for polymers, ”said Sribash Dasmohapatra, Executive Director of the Plastics Export Promotion Council (Plexconcil). said polymer update.
He added that because of the exorbitant increase in freight rates and also in polymers, Indian manufacturers would not be competitive in the world market. “If the domestic market is conquered by imported goods, where would Indian manufacturers sell their finished products?” Said Mr Dasmohapatra.
DILIP KUMAR JHA