The study, conducted by FICCI and Strategy&, estimates that a ban on plastic packaging will directly impact plastic industry sales of Rs 53,000 crores, and about 13 lakh personnel
Banning plastic packaging would adversely impact the growth of several industries such as FMCG, food processing, etc, and is likely to raise the cost of products (especially low-cost) by manifold, according to a new study - titled ‘Why Banning Plastics Packaging is Not a Viable Option’ – released by The Federation of Indian Chambers of Commerce and Industry (FICCI) and Strategy& (the management consulting arm of PricewaterhouseCoopers) on May 6, 2015.
“While appreciating the concerns related to environment it needs to be noted that restrictions or ban on plastics packaging would impact the growth of several industries like FMCG, food processing, plastics packaging and allied industries. It could further adversely impact consumers in terms of cost, health and safety,” said Dr A Didar Singh, secretary general, FICCI.
The report comes out as the National Green Tribunal meets today for a hearing on plastic packaging ban.
FICCI has conducted this study to analyse the impact of a possible ban and the findings show that this could lead to unwarranted consequences particularly on low priced products (Rs 5) as the cost to manufacture and distribute these products could rise multi fold. Further this study revealed that plastics industry sales & employment, agriculture sector and farmers could also be impacted.
The study highlights that plastics are the material of choice in packaging products across categories globally. In India, an overwhelming majority of the FMCG products are packaged in plastic – in fact, 90 percent of biscuits, dried processed food items, hair care products, dairy products, laundry products and baked goods sold in India in 2014 were packaged in plastic.
Plastic has been the preferred material for packaging (relative to alternatives such as glass, paper, metals etc) globally as well as in India due to three critical benefits - superior food safety, quality and shelf life; lower environmental impact across the product lifecycle; and better versatility to create more innovative and consumer friendly packaging options.
The study estimates that a ban on plastic packaging will directly impact plastic industry sales of Rs 53,000 crores. Additionally, about 13 lakh personnel across 10,000 firms (mostly SMEs) engaged in plastic packaging for FMCG will need to find alternative employment. “The indirect impact based on multiplier effect will be ever larger - 2 to 2.5x the direct impact on sales and 3-5x on employment levels,” said the FICCI press release.
Further, it is deduced the ban might forfeit the purpose of intention behind it. As alternatives, in general, have lower product to package ratio, resulting in the use of higher quantities of raw materials. They also require higher energy and water during manufacturing.
“It is recommended that the prudent way forward is not an outright ban on plastic packaging but rather finding solutions to the problem of plastic waste management,” added the release.
The study estimates that reuse rates in India are about 70% for PET-plastic, and lower for non-PET plastic. The low rate of reuse is despite the existence of technologies that have been tested in India – such as polymer blending in bitumen roads and co-processing in cement kilns - that can help India solve its plastic conundrum in its entirety.
The report explores the root causes for the low rates of re-use, and recommends a four-pronged approach that various stakeholders including the government and industry should undertake to improve the segregation, collection, recycling and re-use of plastic waste.
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