Surge in demand for packaging material fails to cheer industry

Vijay C Roy

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Tribune News Service

Chandigarh, May 26

The surge in demand for low-density polyethylene (LDPE) — a packaging material used in food processing sector, pharma industry and exports — has failed to cheer MSMEs based in Panipat and Karnal. According to the industry, labour shortage and logistics issues in the containment zones have cast shadow over production.

A number of packaging and plastic processor units either reduced or shut down their operations due to nationwide lockdown.

While the Centre has urged state governments to allow manufacturing and transportation of essential products during the lockdown, the packaging material industry faced key challenges on the ground. The industry, which caters to packaged food, textile export houses and pharmaceutical industry, said not getting timely approvals for operations as well as shortage of trucks and manpower emerged as key bottlenecks.

When the Central government allowed non-essential businesses to resume operations from May 4, it resulted in the surge of orders.

The industry members said earlier they were catering to food processing and pharmaceutical sector but now with export houses in Panipat opening up, they were getting orders for export consignments. However, production constraint is the main stumbling block.

The packaging units — a majority of them in the MSME sector — said shortage of labour and logistics was affecting production of plastic processors.

“Since we were categorised as essential industries, nearly half a dozen units were operational in Panipat to cater to food processing and pharmaceutical industry during the first phase of the lockdown. Now, as the export units are opening up, the packaging units are operating at around 50% of their capacity due to severe labour shortage,” said Sandeep Aggarwal, proprietor, Uniflex Industries.

There are around 50 units in Panipat and Karnal which cater to the demands of textile export houses, food processing units and pharmaceutical industry.

“While most of our members have resumed production, we are, however, facing a huge labour crisis as a majority of the migrants have gone to their respective home states,” said another entrepreneur.

Semi-skilled and unskilled labourers, who form the backbone of plastic packaging industry, are required in various operations through the production chain, including transportation.

“A majority of the units are in the MSME category with average consumption of around two tonnes of raw material (granules),” said Pankaj Tyagi, ex-general secretary, Panipat Plastic Industries Association. He said bringing production back to optimum levels would take time.

Northern India accounts for around 25% consumption of plastics in India. A bulk of the demand comes from end-use industries of auto, packaging (including bulk packaging), plasticulture applications and electronic applications.