ADAMJEE PLASTIC INDUSTRY

Analysis Of Pakistani Industries

Presented By:
Tabish Jawed
Hassan Zaib Khan
Waseem Ali Manghi
Syed Muhammad Hassan
Presented To:
Mr. Shahid Hameed
 AGENDA
 Introduction
 History
 Plastic Industry In Pakistan
 Structural Composition
 Sectoral Composition
 Plastic Processing
 Demand & Supply Projection
 Swot Analysis
 Issues Concerning The Sector
 Suggestions /Conclusion
 PLASTICS

“Any of various complex organic

compounds produced by polymerization,
capable of being molded, extruded, cast
into various shapes and films, or drawn
into filaments and then used as textiles
fibers”.
 Why Plastic is Popular?
 Attractive
 Hard
 Soft and Rubbery
 Easy to clean
 Flexible
 Good insulator of heat or electricity
 Light weight
 Hygienic
 Easy to shape and color
 Economical
 Non-rusting Material
 TYPES OF PLASTICS
 THERMOPLASTICS

Plastics, which are capable of being repeatedly

softened by heat and hardened by cooling, are called
Thermoplastics

 THERMOSETTING PLASTICS

These are plastics which when cured change into a

substantially infusible or insoluble product.
 HISTORY
 1947: Hand molding machines are reported to be operating
 1953: Plastics resin is sold for Rs.3.05 per pound in local markets.
 1963: Average prices of plastics resin move up only 90 Paisas in ten
years. Exports Promotion Bureau is created.
 1973: 120% increase is recorded in the prices of plastics resins in 20
years. Plastics products worth 0.465 million are exported for
the first time
 1980: Pakistan Plastics Manufacturers Association is formed. The
association is registered with the Ministry of
Commerce in the month of May.
 1988: Plastics Technology Centre (PTC) is established by FCCCL
with the assistance of UNIDO at Korangi Industrial
Area, Karachi
 1999: Engro Asahi Chemical with an investment of US$80 million
set-up 100,000 tons PVC plant at Port QasiM
 2004: PPMA organizes second (local) exhibition in Lahore. First
international plastics exhibition held in Karachi
 PLASTIC INDUSTRY IN
PAKISTAN
 Plastic industry in pakistan is one of the oldest in the country and its
existence can be traced out even in the 1947

 Today plastics material constitutes as the fourth largest item of

imports.

 Global average growth rate of around 7.5 percent but the pakistan
industry is growing at an annual average of 15%

 The per capita plastic consumption in pakistan has lately risen to 2.7
kilograms

 Plastic industry is growing at an annual rate of 2.2%

 Factor that hampered the development of local plastic industry was

ban on import of brand new plastic machines
 PLASTIC INDUSTRY IN
PAKISTAN (cont…)
 There are some 6,000 plastic manufacturers in the country

 600,000 people are directly and indirectly engaged with this

business.

 Pakistan imports 70-80 percent raw material for plastic making

from different countries

 The prices of raw material of plastic industry depend on

international scenario. During iraq war, the prices shot up by 70
percent

 The recent penetration of cheap chinese products into pakistan

has made the competitive situation in the local plastic industry
very intense
 STRUCTURAL COMPOSITION

 RAW MATERIALS

 FINISHED GOODS
 RAW MATERIALS

 Polyethylene (PE)

 Polypropylene (PP)

 Polystyrene (PS)

 Polyvinyl Chloride (PVC

 RAW MATERIALS (cont…)
POLYETHYLENE (PE)
PE, the leading thermoplastic material, has
established its usage in packaging film, household
articles, automotive and industrial parts. Now there is
no plant producing polyethylene.
POLYETHYLENE QUANTITY VALUE IN Rs.(000)
1999-00 74486 2548275
2000-01 94300 3089661
2001-02 126459 3665918
2002-03 126674 4490603
2003-04 154877 6234121
2004-05 156419 5545009
 RAW MATERIALS (cont…)
POLYPROPYLENE (PP)
PP is used in the form of woven bags, household
articles, furniture and packaging film. There is no
plant producing polypropylene at present.
POLYPROPYLENE QUANTITY (M. Tons) VALUE IN Rs.(000)
1999-00 65160 2202654
2000-01 85691 2369840
2001-02 33294 2556355
2002-03 102457 3205623
2003-04 109466 3956245
2004-05 144051 4785727
 RAW MATERIALS (cont…)
POLYSTYRENE (PS)
PS is being consumed in electrical and electronic parts,
household articles, automotive parts and packing
material
YEAR PRODUCTION IMPORT CONSUMPTION
1999-00 1,470 11,798 13,268
2000-01 1,302 16,387 17,689
2001-02 1,017 14,452 15,469
2002-03 11,627 18,938 30,524
2003-04 16,394 7,756 23,398
2004-05 36,000 N.A 23,400
 RAW MATERIALS (cont…)
POLYVINYL CHLORIDE (PVC)
PVC is an important material used for wide range of applications.
PVC is used for doors, windows, pipes & fittings, profiles, food
packaging, furniture, electronic components, foot-wear and cables

POLYVINYL QUANTITY VALUE IN Rs.(000)

CHLORIDE
1999-00 43848 1338186
2000-01 47861 1521952
2001-02 64103 1779792
2002-03 31604 1120967
2003-04 14884 650554
2004-05 13145 571637
 RAW MATERIALS (cont…)
BREAKDOWN OF PLASTICS MATERIAL
WITH GROWTH

PLASTICS END USE INDUSTRIES GROWTH (%)

Poly Vinyl Chloride Pipes, Artificial Leather, Cable 10
(PVC) Coating, Packaging,
Footwear
Polyethylene (PE) Film for Packaging, Bottles and 27
Pipes

Polypropylene (PP) Woven Bags, Auto Parts, 17

Packaging, Pipes House ware
& Medical Applications &
Pipes
Polystyrene (PS) House & Sanitary Wares, Auto 6
Parts, Electrical Parts
 FINISH GOODS
 PET bottles, Jars, Cups
 Molded Furniture YEAR
 HDPE Sacks & Woven Sacks QUANTITY VALUE
(Million Tons) (Million RS.)
 Commode covers, Flushing
mechanisms,
 Household Kitchenware 1996-97 4,873 238
 Water Filter
 Automotive parts
 Electronics parts 1997-98 12,325 600
 Plastic Sheet
 Forged, Machined & Heat Treated
parts, 1998-99 6,780 443
 Crockery items (Forks, Crankshafts)
 Telecommunication Parts 1999-00 11,035 686
 Fan parts
 Medical Instruments (Syringes. etc.)
 Resin & Allied Products. 2003-04 N.A. 33.4
 Pipes and fittings
 Plastic Films
2004-05 N.A. 111.5
 Waste Processed Products
 SECTORAL COMPOSITION

 PLASTICS UNITS

 LOCAL RAW MATERIAL PRODUCERS

 PLASTICS UNITS
 Presently there are 6000 processors in pakistan

 Lahore and karachi are the main centers of plastics

processing units

 The organized sector is producing best quality products for

domestic, industrial and defense sectors
 There are about 600 to 700 medium sized plastics
processing units

 The un-organized sector has grown much more rapidly then

the organized sector
 Besides these units, there are over 5,300 small scale
plastics processing units providing employment to about
600,000 people.
 MANPOWER ENGAGED WITH PLASTIC
INDUSTRY

18,000, 3%
42,000, 7%
PUNJAB
SINDH
180,000, 30%
360,000, 60% NWFP
BALOCHISTAN
PROVINCE WICE PLASTIC UNITS
Balochistan
3%
NWFP
7%
Punjab
Sindh Sindh
30% NWFP
Punjab
60% Balochistan
CITY WISE PLASTICS UNITS
LOCAL RAW MATERIAL PRODUCERS

 Currently there are four plants in Pakistan

producing international quality plastics raw
material
 Gatron Industries
 Engro Asahi Polymers

 Pak Petro Chemicals

 Dyno Pakistan Ltd.

LOCAL RAW MATERIAL PRODUCERS
(cont…)

COMPANY PRODUCT CAPACITY

(M.Tons)
Gatron Industries PET Material 200,000

Engro Asahi PVC 100,000

Polymers
Pak Petro Chemicals HIPS & PS 36,000

Dyno Pakistan Ltd. Methanol Urea 34,000

Melamine
Total 370,000
 
PAK PETRO CHEMICALS
 OTHER RAW MATERIAL PRODUCERS
Name of company Location Installed Capacity Prod. Capacity

Qaiser L. G. Lahore 30,000 30,000

Shafi Chemical Industry Ltd Lahore 17,500 17,500
Nimir Chemicals Pakistan Ltd. Lahore 15,000 15,000
A.T.S. Synthetic (Pvt.) Ltd. Lahore 14,040 14,040
Ravi Chemicals Lahore 5,000 5,000
Delta Industries (Pvt.)Ltd. Lahore 2,400 1,100
BASF Pakistan Limited Karachi 3,600 1,500
BASFA Lahore 2,400 500
Al-Khair Karachi 2,400 500
Polymer Industries Gujranwala 1,200 380
Indus Resin Ltd. Karachi 1,200 120
Mirza Jee Multan 480 40
Nimir Resins Ltd. Sheikhupura 551 228
Berger Paints Pakistan Ltd. Karachi 266 171

Royal Resin Lahore 266 171

Complex Chemical Hattar 181 76
Premier Resin Lahore 85 38
Shalimar Polymer Ind. Lahore 266 133
 PLASTIC PROCESSING

NO. MOLDING PROCESS PRODUCT

Pipe, Fiber, Film, Sheet & Thermoforming,

1 Extrusion Molding Profile, Pipe, Wire & Cable Etc.

2 Injection Molding Bucket, Housing Of Office Automation

3 Blow Molding Container, Bottle

4 Vacuum Forming Pack case For Egg (Thin Film Product)

5 Pressure Forming Suitcase (Thick Sheet Product)

6 Rotation Molding Bottle, Doll

 DEMAND & SUPPLY
PROJECTION
 DEMAND & SUPPLY RAW MATERIAL

 DEMAND ESTIMATES FOR MACHINERY

 DEMAND ESTIMATES FOR ENGINEERING

THERMOPLASTICS
 DEMAND & SUPPLY RAW MATERIAL
(Metric Tons)

PRODUCTS CONSUMPTION ESTIMATED DEMAND

  2001 – 2002 2004 - 2005 2009 - 2010

Polyethylene (PE) 157500 235000 340000

Poly Propylene (PP) 144000 150000 205000

Polyvinyl Chloride (PVC) 78000 95000 120000

Polystyrene (PS) 23400 35000 45000

Total 402900 515000 710000

DEMAND ESTIMATES FOR
MACHINERY
Injection Molding 250-500

Blow Molding 350-500

Extrusion 1000
DEMAND ESTIMATES FOR ENGINEERING
THERMOPLASTICS
YEAR 2004

ABS 11000

Polyamide 700

PBT Molding Material 200

Polycarbonate 6000

Polydactyl 1000
 SWOT ANALYSIS
STRENGTHS

 Easy availability of cheap labor

 Increasing domestic market having demands from both low-end

and high-end segments.

 Several Large Units are also present.

 Industrial Zones facilities are available.

 Location is a competitive strength.

 Acceptable as international Avenue for Exhibitions / Seminar /

Foreign Buyers visit.

 Sound Cash flows

 SWOT ANALYSIS (cont…)
WEAKNESSES
 The industry is largely unorganized and scattered.

 Professional management is not perceptible in the cluster.

 The manufacturers are dependent on imported raw material from outside.

 Lack of Research & Development efforts.

 Lack of vision / Planning.

 Traditional designs and no innovations.

 Not getting benefits from support institutions.

 Nominal Export.

 Weak Association.
 SWOT ANALYSIS (cont…)
OPPORTUNITIES
 Pakistan is emerging as a major consumer market and
international demand is also on the rise for plastics.

 Globalization and free trade.

 Strong National Economic indicators working for benefit of

Industry.

 Linkages with BDS & Support service providers.

 Product Marketing

 New and innovative products

 SWOT ANALYSIS (cont…)
THREATS

 Globalization and free trade.

 High custom duties on Raw Material

 Local Market Penetration by regional competitors.

 High Quality Standards.

 ISSUES CONCERNING THE
SECTOR
 DUTIES & TAXES

 ENVIRONMENTAL HAZARDS

 PROBLEMS
 DUTIES & TAXES
 Plastics sector remains one of the major contributors

 Import duties have been gradually reduced from 110 percent to

10 percent on major plastics materials

 Adjustable sales tax on manufactured plastics goods is 15

percent

 To calculate total duty

 A factor of 64 percent is used for PP/PVC and 50 percent for PE

 Six percent income tax is not refundable to traders

 Sales tax on manufactured plastics goods is 15 percent

 DUTIES & TAXES (cont…)

DUTIES & TAXES %

Custom Duty (All Plastics) 5%

Polyethylene 5%

High Impact Polystyrene 5%

Pet Material 10%

Sales Tax 15%

Income Tax on Imports 1%

 ENVIRONMENTAL HAZARDS
 Plastic bags are an environmental hazard and their production and use
need to be disallowed in the country.

 Used plastic bags are found in abundance in the streets and are
responsible for clogging drains and sewerage lines.

 In the rural areas, these bags decrease the productivity of the arable
land because they do not rot or turn into compost. The most dangerous
are the black bags, made of recycled plastic which increases their toxic
content.

 Plastic's non-biodegradability poses serious environmental and health

problems. In addition, the additives used in processing plastics results
in the presence of substances that are a serious health hazard.

 Burning the waste releases dioxin - a class of 75 chemicals - which is

carcinogenic and causes birth defects and other serious ailments like
cancer.
 PROBLEMS
 Sales Tax for the organized sector is 15 percent, whereas the
unregistered buyers can get any amount of the Plastics materials by
paying 16.5 percent sales tax.

 Export Promotion Bureau needs to enhance its cooperation with the

manufacturers in international exhibitions.

 Lack of information on potential export markets is an impediment

to export growth.

 Interrupted power supply is not only affecting production but also

damaging the expensive machines.

 Incentive for deletion is limited to a few components.

 Lack of adequate training institutes.

 PROBLEMS (cont…)
 PSI is not playing its due role for better quality control.

 There are no export ware houses particularly for capturing

South African market.

 Lack of financial assistance.

 Sales tax on import of moulds is not adjustable against output

tax.

 Tariff on High Impact Polystyrene (HIPS) has been reduced

to 10 percent from 25 percent that is hurting the local
industry.

 Intellectual property and copyright laws are not strictly

enforced
 SUGGESTIONS
 Creation of a plastics desk in the Export Promotion Bureau
(EPB).

 Establishment of plastics website providing information on

imports, exports, international associations, plastics
processors in Pakistan.

 Export ware-houses in target markets.

 Holding national and international exhibitions.

 EPB should ensure participation of genuine exporters.

 Providing more realistic export rebate for PP woven sacks and

other items.