Polymers: Sunrise or sunset? - Views on News from Equitymaster

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Polymers: Sunrise or sunset?

Dec 22, 2000

Petrochem was considered to be the sunrise industry of the 80's. Subsequently, several textile companies integrated backwards to exploit the opportunities of the new dawn. The sector has lived up its promise registering double digit growth rates over the last decade. The oncoming of the tech sector may have redefined sunrise growth rates, however, the polymer sector has exhibited a very respectable performance growing 14.4% in the last eight years (FY91-FY99). Amongst the fast growers in the polymer sector were HD/LLDPE, PP, PS and ABS whose consumption increased by 19.8%, 21.8%, 13.9 and 16.2% respectively.

Although the share of imports in polymer consumption has decreased over the past decade they still continue to enjoy a significant marketshare. Share of imports in polymer consumption has declined from 52.6% in FY91 to 22.8% in FY99. These rates indicate that polymer production in the country continues to lag demand. Further, it could also signify the extent to which domestic volumes can increase making good the production deficit.

Polymer demand in the country is expected to clock double digit growth rates in the coming years as consumption of plastics increases. Currently, the per capita consumption of polymers in India is 3.3 Kilograms (Kgs) as compared to the world average of 17Kgs. Further, the likely shift in the economy towards disposable products could boost the demand for polymers.

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