INDIA AND THE GLOBAL PLASTICS SUPPLY CHAIN, EMAP, LONDON 2004

Françoise Pardos, Pardos Marketing, February 2006

Conclusions, strategy for India

In the general global scene, now and in the next twenty years, India definitely has a place of its own, unlike any other country or area. First, it seems important to differentiate between:

• Domestic demand, as India is to become a world in itself, self-sufficient, another US or another Europe, a major world area.
• Neighboring country demand, that Indian producers and converters can supply
• Global expansion, with strategy of large and smaller players.

The potential is huge and fully open to many strategic routes, among the three above, or combining them.

Of primary importance for India is the domestic development, with a very open world presence, accepting to import what is less profitable to produce at home, and looking for export of added-value, internationally demanded products.

China is not the best example to follow for India, with too much emphasis on exports, not enough on developing the domestic market. The US or Europe at the early times of plastics consumption development are better models for India future.

This attitude does not prevent a strong presence in the global scene, making known the skills and abilities, the cost advantages of the Indian plastics industry for sub-contracting for higher value products, labor intensive assembly work, sophisticated goods, emphasis on quality, reliability, fast delivery, professionalism, all features that rival China has not quite yet achieved. There is a great opportunity for India to establish an image of high quality, an advantage that China has not yet mastered.

The trend has started with a number companies to become global, and this is another facet of the future development of plastics in India, with:

• Strategy of the larger producers Reliance, Haldia, GAIL to invest in the world, like top Asian producers, such as Formosa Plastics or NanYa have already done.
• Entry of smaller players and converters in the world scene.

The target for India is to achieve a good balance between domestic consumption and exports, and a gradual and clever entry into the world markets, with emphasis to the closer areas, South East Asia, Middle East, East Africa.

Partnerships and contracts must also be established with high level technology with European, Eurasian and American top players.

The image that India must create and care for is that of high quality, cutting edge technology and professionalism, to be different from the commodity oriented rest of Asia, and to stay several steps ahead in the higher added value products in international trade.

In parallel, India has started building a fast growing and diversified plastic industry for the domestic demand, ranging from low cost commodities to engineering and high performance plastics. 

The idea is to be present in the best of both worlds, a strong, diversified and growing domestic market, and high quality, higher value presence on the global scene.

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