Tamil Nadu MSMEs feel pinch of rising polymer prices

With the State going to the polls, these units feel they are being orphaned, and any further delay in relief will worsen their lot

Micro, Small and Medium Enterprises (MSMEs) across Tamil Nadu, which spend huge sums on raw material procurement after the lockdown was lifted, face a new challenge: the rising polymer price and a huge shortage of the material.

With Tamil Nadu going to the polls, these units feel they are being orphaned, and any further delay in relief will worsen their lot.

R. Selvam, a plastic components manufacturer at the Thirumudivakkam Industrial Estate, says there is an acute shortage of polymers, especially engineering polymers such as nylons, polybutylene terephthalate, polyacetal and polycarbonate that are used in the automotive industry.

“All the raw materials that I mentioned are imported from various countries. We have been experiencing the shortage for the past 5-6 months owing to the gap in the demand and supply and issues of logistics,” he says.

Mr. Selvam says Indian companies making commodity polymers such as polyolefins and polypropylene have put up their prices significantly for no major reason. He suggests that the government regulate the prices until the demand and supply return to normal. The government can also reduce the import duty and restrict the exports of the locally made polymers.

This particular raw material is a key component for industries such as automotive, aerospace, electrical and electronics and home appliances.

A.N. Rajasekar of the Oragadam Industrial Estate says the high cost is affecting the units’ working capital. “Buyers are not willing to take the impact,” notes Renny Jose, managing partner of Core Plasto Enterprises, which operates from the Guindy Industrial Estate.

K. Jagadeesan, secretary of the SIPCOT Pillaipakkam Industrial Estate Manufacturers’ Association, says his business requires over 300 tonnes of polymer a month. “We have been making dashboard parts for an automobile major. The high price, coupled with the shortage, has affected our export market,” he says. He wants the government to form a price regulatory council to control the abnormal price increase and help the units meet their requirements from alternative sources.

S. Senthil Kumar, a supplier of polymers from the Thirumudivakkam Industrial Estate, explains that the situation worsened in the last one month owing to the cold wave that gripped Texas, U.S., where many companies have halted production. The market is good, but MSMEs have to cut production for want of raw materials.

According to the data given by MSMEs, the price of ABS polymer has gone up 100% to ₹260 a kg, compared with ₹130 before the lockdown started. The prices of the other variants have gone up by 40%-75% a kg.