Press Release

AIPMA seeks government intervention for irrational behaviour of Polymer Producers

The All India Plastics Manufacturers Association, (AIPMA), an apex body of the Plastic Manufacturers in India have been adversely affected by price hike and moreover with monopoly of Polymer producers.

Polymers are petrochemical products made out of items of crude oil and are used for producing a variety of products right from life saving surgical, Agricultural products, FMCG consumer durables and packaging foods, furniture, automobiles and alike.

The recent price hike in crude oil price has affected the global economy and Plastics Industry, in specific, is badly hit. To make the matter worst many leading Polymer producers have taken advantage of the situation and have been raising prices in an erratic pattern.

Rather than the price hike the processors have become the victims of the autocratic behaviour of polymer cartel who have been increasing prices three times in a month.

The Plastic processors / supplier spends most of the time convincing customers about the price rise. The monopoly is such that by the time the processor/ suppliers settles rates with the customers, there is yet again price rise. Such things not only incur huge losses to the processor / suppliers but also disturb the supply chain management.

There are about 50,000 registered plastics unit in the country employing more than 35 lakh people and contributing around Rs.8, 000 crores to the exchequer.

The All India Plastics Manufacturers Association, AIPMA appeals to the government to resolve such issue and save the small and medium industries from becoming sick units.

The All India Plastics Manufacturers Association, AIPMA suggests Government to take following measures to contain this haphazard price rise:

1. To bring down the Customs Duty on Polymers from 5 percent to zero (as done with steel and cement).
2. To impose Export Duty on Polymer as done in the case of cement and steel.
3. To withdraw the anti-dumping duty on PVC and Polystyrene or on any polymers.
4. To allow import of industrial scrap under Open General Licence (OGL).

All India Plastics Manufacturers Association, AIPMA would be grateful to the government and seeks remedial measures to save 50,000 odd industries from closure.

For further Information contact:

The All India Plastics Manufacturers Association
AIPMA House, A 52, Road No .1 MIDC,
Marol, Andheri (e), Mumbai- 93
Tel: 2821 7324 / 25

Joint Memorandum Submitted - by 22 Associations, to the Government

ALL INDIA PLASTIC ASSOCIATIONS FORUM

22, June 2008
Shri Ram Vilas Paswanji,
Hon'ble Minister for Chemicals & Fertilizers and Steel,
Govt. of India,
Shastri Bhavan, New Delhi.

SUB : REQUEST TO CONVENE A URGENT JOINT MEETING OF RAW MATERIAL PRODUCERS (RIL/GAIL/HPL/IOC/HPCL/ONGC) AND PLASTIC PROCESSORS UNDER YOUR CHAIRMANSHIP.

Respected Sir,

The Forum of All India Plastic Associations represent the interest of more than 50,000 Plastics Processing Units all over the country where are mostly Micro and S.M.E.'s.

As you are kindly aware, the Prices of Raw Material (HDPE / LDPE / LLDPE / PP / PVC - All Polymers) have shown an unprecedented increase pursuant to exorbitant levels of Crude prices concomitant with unusual demand of Plastics in China. The Indian Raw Material Producers who unusually announce their prices with revision if any on 1st of every month, have recently increased prices 5 times since May 01, 2008, that too very substantial.

In such circumstances, we have no option but to write to you, as decided unanimously in our meeting held at Mumbai yesterday i.e. on 18/06/08, to please convene a Joint Meeting to over come this crisis and avoid a total chaos in the Industry.

We propose a One - Time Package from the Stakeholders as under for urgent relief to the Plastic Processing Units, spread all over India.

1.    FROM RAW MATERIAL SECTOR (RIL / GAIL / HPL) :

1. To refrain from any further price increase irrespective of increase in Imported Material as exhibited today, pursuant to our yesterday's meeting.
2. To maintain regular and adequate supplies to all customers in the country with top priority to Micro and Small Units.
3. To provide Fiscal relief to all Customers particularly the ones in Micro and Small sector, as a Social Responsibility.
4. To interact with all Plastic Processing Associations at National / State / Local Levels and resolve all issues are restore Goodwill.

2.    FROM CENTRAL GOVERNMENT :

1. To Reduce Excise Duty from 14% to 8% on all Plastic Products and Raw Material.
2. To allow Free Import of Industrial Plastic Scrap for use in Non Food Applications to ease supplies
3. To Reduce the Custom Duty on Naptha from 5% to Zero for production of Polymers.
4. To provide Subsidy in Interest and adequate Working Capital to all Plastic Processors.
5. To Reduce the Custom Duty on Polymers from 5% to 2.5%.

3.    FROM STATE GOVERNMENT :

1. To Reduce the V.A.T. Rates from various Slabs to the lowest slab of 4%.
2. To withdrawal local levies like Octroi / Entry Tax etc.
3. To provide Electricity at the minimum rates.

4.    FROM USERS :

1. To allow price rise in view of rise in Raw Material prices as well fixed costs like Power, Fuel, Interest etc.
2. Reschedule all orders issued from 01 May 2008 onwards to allow Cost of Raw Material as per the last published prices of Raw Material as of 12/06/08.

Sir, an early confirmation will be highly appreciated to save the industry, from closure.

Thanking you,
With Regards,

For and on Behalf of ALL INDIA PLASTIC ASSOCIATIONS FORUM

Copy To :

1. Shri B.K. Handiqueji, Hon'ble M.O.S., Ministry of C & F, G.O.I., New Delhi.
2. Shri V.S. Sampathji, Hon'ble Secy., D.C.P.C., G.O.I., New Delhi.
3. Shri J.S. Pandeyji, Hon'ble J.S., D.C.P.C., G.O.I., New Delhi.
4. The Hon'ble C.M.D.s of RIL / GAIL / HPL / IOC / HPCL / ONGC.
5. The Members of Plastic Development Council of India.
6. The Members of Advisory Forum of India on Petrochemicals.

LIST OF THE MEMBER ASSOCIATIONS

1. The All India Plastics Manufacturers' Association(AIPMA),Mumbai
2. Indian Plastics Institute, .Mumbai
3. Bombay Small Scale Industries Association, Mumbai
4. Federation of Industries of India, Mumbai
5. Organisation of Plastics Processors of India, Mumbai
6. Kerala Plastics Manufacturers' Association, Cochin
7. Gujarat State Plastics Mfrs.' Association, Ahmedabad
8. Andhra Pradesh Plastics Mfrs.' Association, Hyderabad
9. Daman Industries Association, Daman
10. Maharashtra Plastics Mfrs.' Association
11. Plastics Mfrs.' Association of Rajasthan, Jaipur
12. Association for the Promotion of Plastics, Pune
13. The Small Scale Acrylic Plastics Products Manufacturers' Association
14. Saurashtra Plastic Mfrs.' Association
15. All India Flat Tape Mfrs.' Association, Ahmedabad & Delhi
16. Kerala PVC Pipe Manufacturers' Association
17. All India Industries Association, Delhi
18. Tamil Nadu Plastics Manufacturers' Association (TAPMA), Chennai
19. Bhavnagar Plastic Manufacturers Association, Bhavanagar
20. Indian Plastpack Forum, Indore
21. Plastics Exports Promotion Council, Mumbai
22. Surat Plastics Mfgrs' Association, Surat
23. Karnataka Plastics Mfgrs' Association, Bangalore