Overview of opportunities for international businesses to tap the Indian market for plastics.

1. This note has been prepared by Kanvic for the exclusive purpose of our Clients. The material contained herein cannot be copied, used, circulated for any other purpose. All
rights reserved Kanvic Consulting Private Limited.
Tapping the plastics opportunity in India
Presentation to Plastindia 2015
Kanvic Consulting

2. Contents
2
Understanding the Indian plastics industryA
B
Assessing business opportunities for
international players
About KanvicC

3. India is one of the most promising international markets for plastics
3
y= 2005-14E CAGR consumption / capita
x = Consumption per capita in 2014E (kg)
Per capita consumption of plastics and growth trends in key geographies
Source: Plastindia Foundation, Plastics Europe, China PEC, PolyOne, Press Clippings, Kanvic analysis
0%
4%
8%
12%
16%
0 40 80 120 160
E. Europe: 45
India:
14
China:
67
Latin
America: 32
Middle East
& Africa: 16
Japan: 110
W. Europe:
128
N. America:
141
Note: Bubble size indicates total population in 2014.

4. Plastics demand in India is driven by fast growing end-user industries
4
Packaged goods
Food
Personal / home care
Etc
Consumer durables
Automotive
Electronics / home appliances
Furniture
Etc
Infrastructure
Pipes
Containers
Cables
Etc
Agriculture
Irrigation systems
Plasti-culture
Etc

5. However different parts of the value chain have not reached to same level of
maturity
5
Polymer
Manufacturers
Plastics
Processors
Equipment
Manufacturers
Recycling
Players
Dominated by ~15
large Industrial groups
High
Low
Dominated by
~200 players
~4,000 unorganised units
~3,500 organised units
Fragmented with
~30,000 units mostly
operated by small players
End-userIndustries
Structure and organisation of the Indian plastic Industry in 2014
Source: CRISIL, Plastindia Foundation, Kanvic analysis
Concentration
Flow of recycled plastics
Flow of Virgin Polymers
Flow of equipment
Flow of processed plastics

6. Contents
6
Understanding the Indian plastics industryA
B
Assessing business opportunities for
international players
About KanvicC

7. Key opportunities for international firms can be found in two areas
7
Raw
materials
Equipment
Modernise
equipment
Bridge supply and
demand gap
Key areas Opportunities
1
2

8. With demand rising faster than domestic production there has been an
increasing reliance on Polymer imports
8
Consumption
11.8
+14%
9.1
+9%
4.4
+22%
Imports ExportsProduction
Bridge supply and demand gap1
Flows of Virgin Polymers in India, 2013 volumes and 2004-13 CAGR, MMT, %
Source: Plastindia Foundation, Government of India, Kanvic analysis
1.7
+5%

9. Supported by the Government’s cut in trade tariffs, Indian plastic processors
have gained access to Polymers from international suppliers
9
1999 2004 2009 2014
Average trade tariff for Polymers
Volume of polymer imports
4,467
1,883
753694
7.6
10.0
20.0
38.538.5
20.0
10.0
7.6
Growth of polymer imports as trade tariffs go
down in India, 000 MT, %
1- China
2- Korea
3- USA
4- Saudi
Arabia
5- Taiwan
6- Germany
7- Singapore
8- Thailand
Top exporters to India for plastics by volume,
2014
1 Bridge supply and demand gap
Source: Government of India, WTO, Kanvic analysis
Note: Top exporters are considered for HS code 39 (plastics and article thereof)

10. Some attractive opportunities lie in higher-tech raw materials where Indian
production may take time to build-up to the required level
10
1 Bridge supply and demand gap
2007 2011 2017E
168
85
50
31
1613
Production Consumption
Supply and consumption of Polyamides in India,
000 T, 2007-2017E
Source: FICCI, Secondary Research, Kanvic analysis

11. Plastic processing is becoming increasingly organised creating substantial need
to renew and modernise the installed capacity
11
Modernise equipment2
The market has long been fragmented due to Government
restrictions on the size of plastic processing units.
Pictures of Indian Small Scale
plastic processing units
The last restrictions have been removed massively between
2007 and 2008 to make the industry more competitive.
Small units had low efficiency by lack of technology, scale,
and capacity utilisation.
The market is now likely to concentrate and organise at a
fast rate.
Heavy investments in machinery will be required to ramp-up
the production capacity.
Source: CRISIL, Plastindia Foundation, National Productivity Council

12. There is a clear dynamic towards investing in expansion and renewal of plastic
processing equipment in India
12
2010 2012 2014E 2016P 2018P 2020P
13,563
11,300
9,346
7,9258,098
6,482
6.0
0.4
5.5
Injection Moulding Blow Moulding
Extrusion
Addition of new plastic processing machines in
India, 2010-2020P, units
Cumulative investments required for new plastic
processing machines in India, 2014-2020P, USD
Billion
Total cumulative investment
~USD 12 billion
Modernise equipment2
Source: Plastindia Foundation, Kanvic Analysis
Note: A large part of capacity addition is for replacement since total capacity utilisation is ~50%

13. Indian plastic processors are increasingly relying on international machinery to
modernise their facilities
13
2000 2006 2010 2013
46%40%34%
5%
54%
60%
66%
95%
Domestic Import
Imports contribution to new machines addition in
Indian plastic processing, %, 2000-13
Modernise equipment2
Source: Plastindia Foundation, Kanvic Analysis
Generate scale economies
Higher tonnage equipment
Faster production cycles
Differentiate
New product designs
Cut costs
Better yield
Energy efficient equipment
Priorities for Indian equipment buyers
3,110 4,705 6,482 7,298

14. Contents
14
Understanding the Indian plastics industryA
B
Assessing business opportunities for
international players
About KanvicC

15. 15
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