The objective of this article is to try and understand the challenges and opportunities that exist in the developing the plastics industry in the Indian state of Gujarat.
First and foremost, India ranks near the top when we talk of manpower, easy access to international markets, a stable economy, and it has the goodwill of foreign investors. By 2025, India will be the world’s fifth largest consumer market and Indians will be spending close to $1.8 trillion on consumer goods.
Packaging, healthcare, and agriculture sectors are witnessing a boom because of the country’s growing economy. Plastics and polymers are a common factor across these industries and this has resulted in huge demand for plastics processing machinery as well as related equipment. The situation has attracted foreign players that are keen to invest in this sector in India. The plastics processing sector is going to soon witness the signing of a lot of joint ventures.
The Indian state of Gujarat has emerged as the fastest growing economy in the country. Ahmedabad is the largest city in the state and was listed by Forbes in 2010 as the third fastest growing city in the world. Thus, the state of Gujarat which is already the largest polymer producer in the country is firmly set to play an important role in the developments mentioned above.
Of course there will always be minor issues to iron out; for example sellers of European machinery being aware of opportunities as they arise in Gujarat and coming to terms with how business is done in India; the technicalities, documentations, etc. In order to take care of such things it is best to take the services of an established used machinery broker who knows how both Indian and European markets work.
Indian plastics manufacturers based in Gujarat and elsewhere need to become more aware of the advantages of installing world-class European plastics machinery. Europe leads the world in the manufacture of high quality plastic molding equipment and even second-hand machinery, though expensive, yields great performance and returns over the years. Industry in Gujarat is beginning to understand that used machinery is not always the same as cheap machinery and that it makes business sense to distinguish between the two.
Once this happens, there will be a marked improvement in the order conversion rate and there’ll be a better balance between demand for used plastic processing machinery and its supply. This will happen when processors begin to realize first-hand the enormous cost savings and increase in production that comes with deploying highly automated European machinery.
The plastics industry sector of Gujarat is committed to growth with environmental responsibility. In fact, the state of Gujarat recycles one-fourth of the plastic waste of the country; approximately around 5 lakh tonnes. The state has registered a very impressive growth every year in the production and utilization of plastic.
Manufacturers in the state realize that the need of the hour is to make plastic as green a product as possible. Given that the state is the national hub of the chemical and petrochemical industry, it views its social and environmental responsibilities seriously.
Buyers are also becoming aware of how to get the best out of used plastics machinery by having the machines refurbished when the need arises. There is now a greater understanding about how to deploy lower costing used machinery that is also energy efficient.
The used machinery market in Gujarat is ripe for the entry of a professional broker that can bring together efficiencies of scale. Small traders dealing in used machinery operate under certain constraints, such as inability to secure loans for buyers, refurbishing, helping with documentation, etc. A large player in the field can get you quality machines at affordable prices; a true value proposition unlike bargain basement pricings that can appear attractive but do not yield long-term value for money.
A broker with the size advantage can reach out to buyers across sectors such as beverage, agro-food, and dairy sector. Buyers can avail custom equipment as well. Small and mid-sized businesses have a lot to gain from by exploring purchases through an established machinery broking firm including the setting up of a turn-key project.
Gujarat has great potential as a market and is attracting international players because of several factors in its favor; these include consistent electric power supply, road and rail connectivity, Special Economic Zones to facilitate industry, and a burgeoning polymer production industry.
Foreign players that are planning to come to Gujarat will bring with them a wide range of choices including European, American, and Asian machinery. High productivity and low power consumption are very attractive attributes for manufacturing machinery across sectors and quality used machines fulfill these criteria.
Entrepreneurs in India and the state of Gujarat are benefiting from a strong knowledge base that is developing due to the influx of new technology. A rich pool of technocrats is available that can put new knowledge to practice. Gujarat has everything going for it to become a great investment destination for the plastic machinery business.