After fighting the depression in revenues due to the economic slowdown post lockdown, plastic packaging manufacturers are now facing another blockade: “the draft plastic waste management (amendment) rules 2021”. This ruleproposes to ban the manufacturing of plastic carry bags and commodities of less than 120-micron thickness with effect from September 30.
This has ignited panic and concerns among manufacturers, as they will be forced to either shut production or make fresh capital expenditures.
In order to manufacture plastic bags above 120-micron, the plastic manufacturer would need to upgrade their machinery, 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.
If the new rules are executed from September 30, many industries will be obliged to economize or shut down production and many others will have to suspend operations.
According to plastic manufacturers, a manufacturing unit of plastic packaging requires a minimum capital of Rs 20-25 lakh, as not only in the production, even the cutting and sealing machines will need to be replaced. Besides, the 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. The plastic-makers have made a series of representations before the state as well as the center, seeking to relax the norms and also provide an alternative for plastic before banning it completely. They have urged the government to limit the ban of plastics up to 60-65 microns.A 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.
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.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.
Most plastic manufacturers are MSMEs, and banning plastics will put the employment and livelihood of thousands at stake. Instead, the government must focus on strengthening the waste management rules.