ECONOMICS PROJECT

PLASTIC INDUSTRIES

Introduction

The Indian plastics industry made a promising beginning in 1957 with the production of
polystyrene. Thereafter, significant progress has been made, and the industry has grown and
diversified rapidly. The industry spans the country and hosts more than 2,000 exporters. It
employs about 4 million people and comprises more than 30,000 processing units, 85-90 percent
of which are small and medium-sized enterprises.
In today's scenario, Plastic is a major component, used in each and every Sector like
Electronics, Computers, White Goods, etc.
The apex government body(The Plastics Export Promotion Council)is responsible for the
promotion of plastic exports. PLEXCONCIL members comprise large-/medium-/small-scale
manufacturers and exporters & supports exporters by participating in international trade fairs,

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exploring new markets, organising buyer- seller meets both in India and overseas, and engaging
in various other promotion and need- based activities.

● Export of plastic products from India stood at US$ 7.64 billion in FY 2015-16.
● In FY 2011-12,exports of Indian plastics stood at US$ 7.19 B which leads to growth of
47% approx. over the previous year.
● During April 2019-January 2020, plastic export stood at US$ 7.045 billion with the
highest contribution from plastic raw material at US$ 2.91 billion, plastic sheets, films
and plates at US$ 1.22 billion and packaging materials at US$ 722.47 million.
● The Indian plastics industry produces and exports a wide range of raw materials, plastic-moulded
extruded goods, polyester films, moulded / soft luggage items, writing instruments, plastic woven
sacks and bags, polyvinyl chloride (PVC) and others.
● The Indian plastics industry offers excellent potential in terms of capacity, infrastructure and
skilled manpower.
● Industry’s major strength is the availability of raw materials in the country,so processors do not
have to depend on imports. These raw materials, including polypropylene, HDPE,LDPE and
PVC, are manufactured domestically.

Research Problem : -

While calculating the HHI Index for the companies we observed that the Overall market shares
of the companies have fluctuated over the 20 years.

The below table shows the market share of the top 10 selected companies. The companies saw an
increase in market share during 2005 -2010 but witnessed a decrease in the next decade.

New entrants in the industry

Data Collection : -
We have referred from secondary data sources and external databases to collect our data. We
have made use of annual reports of the companies as well as downloaded financial data from
CMIE Prowess software.

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Research Methodology:-

1. We extracted the sales data for all Plastic industries using CMIE prowessIQ.
2. Calculated market share(Si) of all the industries individually using the formula:

Market share (Si)= (Sales of individual company)*100/(Total sales of all the

company)

3. Calculate company.i.e (Si)^2.

4. Finally we calculated Concentration Index .i.e HHI using the formula:-

5. Sorted the company on the basis of largest to smallest market share. Then selected the top
company for an individual project.

Results

HHI Index of the top 10 companies (Supreme Industries Ltd.,Uflex Ltd.,Nahar Poly Films Ltd.
Jindal Poly Films Ltd.,Finolex Industries Ltd., 3M India Ltd.,Cosmo Films Ltd.,Nilkamal
Ltd.,Kkalpana Industries Ltd., Polyplex corporation Ltd.) for the financial year 2018-19= 405.6

Discussions(strategy)

Supreme Industries

Introduction : -

Supreme Industries Ltd. is an Indian company based out of Mumbai. It primarily belongs in the
plastic industry. It was founded in 1942 by Kantilal Mody. One of the largest plastic processors
in India. It handles over 4,50,000 tonnes of polymers annually. Diversified revenue model with a
large product portfolio. 25 plants situated across India with an asset base of over Rs. 3000 crores.
$ 1.5 billion of market capitalisation as of 31st March 2020.

Product Segments : -

1. Plastic piping

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 2. Packaging
3. Consumer products
4. Industrial products

Business Strategy: -
• Boosting New products portfolio through new innovative products.
• Technological tie ups with various foreign partners to enhance innovation capability
• Expanded distribution reaching over PAN India.
• Consistent increase in revenues from speciality and value-added products.
• Cost efficient raw material procurement capability
• Portfolio of several patented products
• 10% decline of YoY revenue due to covid 19.
· An Overall strong fundamentals and business plan kept the company the market leader in
its business.

Finolex Industries

Introduction

Economic situation: During FY 2019-20, the global economy, as well as the Indian economy,
were impacted by factors which resulted in an overall slowdown. Finolex’s markets were also
impacted by these forces which resulted in agricultural distress, slow growth of infrastructure
and a consequent impact on the growth rate of the Pipes and Fittings business.

Outlook: The Indian Economy is expected to slow down to a growth rate of 1.9% in FY 2020-21
from its current levels of 4.2% growth in the current fiscal year. India’s growth rate is expected
to recuperate in FY 2021-22 and is anticipated to touch 7.4% on the back of favorable economic
environment in the second half of CY 2020. The Indian government has introduced fiscal
measures and monetary policies to revive the economy and it is expected to deliver favorable
results in the near term.

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Opportunities: The Government has announced multiple initiatives for both the agricultural and
agricultural sectors. A budget of 2.83 lakh crore has been allocated for the Agriculture and Allied
Activities sector. The Jal Jeevan Mission, which aims to ensure access to piped water in rural
areas, as one of these initiatives. For allied sectors, the focus revolves around housing (Pradhan
Mantri Avas Yojana), healthcare infrastructure (PM Jan Arogya Yojana) and the environment
(Swachh Bharat Mission). These initiatives will eventually improve demand for pipes and
fittings as upcoming projects in these sectors gain prominence and thereby enable a promising
future for our industry.

Plans and strategy: In the coming years, Finolex will be consolidating their Pipes and Fittings
business, more so in the plumbing range, and will continue to expand the product portfolio and
distribution network. They are also increasing branding by participating and sponsoring in
national and international events. In order to reduce its receivables, it Is following “Cash and
Carry” model.

Strategic framework

· Expanding Footprint

· Cash and carry model

· Branding

· Capacity Expansion

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Jindal Polyfilms Ltd

Introduction-Jindal Poly Films Limited is a part of the $ 2 billion B.C. Jindal group, which has
been offering a wide range of products and solutions for more than 6 decades. The group is
involved in diverse businesses including Polyester & Polypropylene films, Steel pipes, Thermal
Power Generation and Photographic products.
Products- 1. Bopet Films
2. Metallized Films
The main business strategy of JINDAL Polyfilms was -

1. To invest and acquire small firms.

2. Maximize the production & metalizing of biaxially oriented polyester
3. In 2005 the company made a public offer by way of 100% book building by issuing
8300000 equity shares of face value of 10 each at a premium of 350 per share amounting
to RS 3000 million.
4. Introduction of special CPP Films.
5. Innovation in Electronic Goods Packaging

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From Table & chart we can conclude that -

1 Assets and income increased with period of time which represents a better share in
the market.

2 Liabilities increased exponentially after 2010 because of acquisition of loss making

firms.

Jain irrigation systems

Introduction : -
Jain Irrigation Systems Ltd, Asia’s largest irrigation equipment maker, It manufactures a range
of precision-irrigation products. The Company is engaged in manufacture of plastic products,
and manufacture of fruit or vegetable juices, their concentrates squashes and powder. It has a
global presence with 33 manufacturing bases spread over four continents. Our products are
supplied to 126+ countries with able assistance from 11,000+ dealers and distributors worldwide.
We have reached over 8.5 million farmers.

Product Segments : -
1. Hi-Tech Agri Input Products
- micro and sprinkler irrigation systems
-polyvinyl chloride (PVC) pipes
-tissue culture and other agri inputs
2. Industrial Products
-PVC sheets, polyethylene (PE) pipes for industrial applications
-fruit processing, onion and vegetable dehydration and solar/green energy
3. Non-conventional Energy.
- wind energy, solar and bio-gas
- plastic piping systems that are used in conveyance of fluids, semisolids, gases
and cables

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Business Strategy: -
1. Total commitment for customer satisfaction.
2. Protection and Advancement of Environment.
3. Sustainable Development of Stakeholders.
4. Reduced dependence on government subsidies on irrigation equipment.
5. Identified Dollar revenues and sold non-core assets.
6. Floated non banking finance company to fund farmers.
7. Company changed its exposure towards government agencies towards farmers and
micro-irrigations, hence reduced receivables by 25%.

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Uflex Ltd.

Introduction- UFlex has over thirty years of experience in polymer technology. Setting
milestones of success and innovation, UFlex is known for manufacturing and supplying
products, delivering customized flexible packaging solutions and services across the globe to
become an inextricable part of customers’ life.
Promoted and founded in 1985 by Mr. Ashok Chaturvedi, a first generation entrepreneur, a great
story of entrepreneurship, perseverance, operational excellence, belief and a proven track record
of success.
BUSINESS STRATEGIES:

1. Growth through innovation to create differentiation

2. Speed to market reach

3. Proximity to customers to ensure quick deliveries & better service to customers

4. Offer wide range of packaging products both in terms of size and types of goods they can
pack

5. Excel in operational efficiencies to enhance competitive position

Product Segments
a. Packaging Films

b. Flexible Packaging Solutions

c. Asceptic Liquid Packaging

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3M India

3M was established in 1990 and is a conglomerate in the industry. It is one of the largest rubber
and adhesive’s producer. Sales of the company have been increasing from the past 2 decades.
There is a slight decrease in the sales in 2019-20 which might have happened due to Covid-19
pandemic. The sales percentage increased more from the year 2005 and decreased from 2019
due to ban of few polyethene products by the government.

Products

· Wires and cable

· Tapes and adhesives

· Dental products

Health care

Strategies

· Collaboration with Karnataka state government for safety kit educations

· Collaboration with central government to work with railways

· Strive for high performance adhesives

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 · Launch of 3M design center in Bangalore

Cosmofilms Ltd. →

Introduction

Cosmo Films Limited (established in 1981),today is one of the global leader in specialty films
for packaging, lamination and labeling applications. Its films offerings include biaxially oriented
polypropylene (BOPP) films, cast polypropylene (CPP) films and soon to be offered biaxially
oriented polyethylene terephthalate (BOPET) films.

From the graphs, we can comprehend that Cosmo Films Ltd. has carved a niche of being the ace
company all over the years & across the globe whose packaging solutions have set a benchmark
in the industry.

BUSINESS STRATEGY:

1. Maintains High standards of quality by conducting stringent tests & high investments on
R & D department, incorporates state of art techniques in its production and marketing.

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2.It architects each and every packing solution keeping in the mind the Comforts of the end
users.

3.Company has been working closely with several FMCG brands and helping them develop
easy-to recycle packaging laminates for their products without compromising on the different
functionalities.

4.Increase inclination towards hygiene and packaged products has also helped in emerging
markets & in increasing sales

5.The return on Net worth for the financial year 2019 stood at 8.4% which is higher when
compared to the previous year.

Nilkamal ltd.

Nilkamal is a plastic products manufacturer based in Mumbai, India. It is the world's largest
producer of molded plastic furniture and Asia’s largest processor of plastic molded products.
The company has a chain of retail stores in the name of @home brand.

The product range consists of custom plastic mouldings, plastic furniture, crates and containers

Business strategy :-

1. Creating World Class Infrastructure

2. Development of Innovative and Value Added Products

3. Logistics and Technology adaptation

4. Sales and Distribution

5. Installation and After Sales Service

6. Aggressive pricing strategy based on market mapping.

7. A well-targeted marketing campaign round the year to attract the online buyers and ensure a
great buying experience.

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Kkalpana industries
Kkalpana Industries (India) Limited is a Public incorporated on 03 September 1985. It is
classified as Non-govt company and is registered at Registrar of Companies, Kolkata.

Kkalpana Industries limited started focusing on their sales & they started more branches all over
India in 2005. Because of the increase in branches sales also increase. We can see in the below
graph that sales are continuously increasing from 2005-06 till 2017 but due to Government
policy in the year 2018 sales started decreasing.

Strategies: -

1- Build brand awareness and equity

2- Enhance enterprise reputation.

3- Understanding use of Digital / Information Technology

4- Leadership

5- Appreciation of long-term trends

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Polyplex Corporation Ltd.