Dharavi, a key plastic recycling center in India, is witnessing a fall in business owing to a development beneficial to sectors including virgin plastic production — the oil price slump.
Steve Toloken has reported for Plasticsnews.com that several of Dharavi’s more than 1,000 small-scale plastics recycling companies have shut shop as market price for recycled plastic has fallen by more than 50 percent.
By one account, the price has fallen from above 90 rupees ($1.45) per kilogram to about 45 rupees (71 cents).
The industry employs an estimated 10,000 people in Dharavi alone and 60,000 nationally, according to Plastindia Foundation figures.
The slump has impacted the industry globally. Many countries that were good markets for recycled plastics are now showing a decline in demand.
British Plastics Federation had in a statement issued in March stated that low oil prices were making plastics recycling in that country “uncompetitive” and “threatening viability of businesses” and the “recycling record of the supply chain”.
Today supply exceeds demand in the sector globally. And specifically for Dharavi there are the other big, permanent challenges of high electricity costs and shortage of space for factories to contend with besides low oil prices.
Toloken has quoted plastic recyclers’ association sources as saying that power costs in Dharavi were four times that in Silvassa, an industrial area 120 miles north of Mumbai. And electricity prices in Dharavi have been consistently rising over the past five years, the sources have added.
In India, recycled plastic constitutes major portion of India’s plastics supply chain.
Roughly 25 percent of plastic used in India is recycled material. And while the US recycles only 30 percent of all the PET bottles manufactured, India recycles 70 percent of such bottles and nearly 100 percent of rigid plastic containers made.
If the industry goes into a free fall, it will worsen an already precarious pollution scenario in India.
Ajith Kumar S