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Growth Factors of Plastic Pipe Industry In India

  • Anti Dumping Duty(ADD) on CPVC – a boon for organised players

In India, CPVC is ~ Rs. 4,650 cr. market. Due to increased acceptability and application, the consumption of CPVC has gone up and it has become the fastest growing category within plastic pipes. Currently, India does not have CPVC capacities, and it meets ~95%+ of its compound requirement through imports. Large players procure CPVC compound from global manufacturers whereas China and South Korea were key source of CPVC compound for small unorganized players. Small players sourced cheaper resin from these countries and competed aggressively with large players on price. In a span of just 4 years share of imports from these countries had gone up 3 times from ~13% to 36%.

Source – ValueQuest

  • The Buzz around JAL JEEVAN MISSION – 
  • Sector consolidation – 

Source – ValueQuest

This sector consolidation has been driven by – 

1)Sky – rocketing PVC pipes – 

Source- ValueQuest

2)Good & Services tax – 

Source – ValueQuest

  • Plastic Pipes – Growth across each segment for FY19-FY24

Government scheme boosting growth of Plastic Pipe Industry:

  • Irrigation – PMKSY
  • Urban infrastructure – WSS schemes such as Jawaharlal, Nehru National Urban Renewal Mission (JNNURM), AMRUT, Swachh Bharat Mission, Smart Cities Mission
  • Real estate – Housing for All scheme

Source – Prince Pipe & Fittings DRHP, Page no – 130

Source – Finolex AR, Page no – 44

  • Growth in Irrigation segment – 

Source – Reliance Securities, Page no – 11

Source – JM Financial, Page no – 24

Source – Prince pipe & fittings, Page no – 131

  • Growth in WSS(Water Supply & Sewage) – 
  • Driven by the recently proposed “Nal se Jal” scheme, a component of the Jal Jivan Mission, which promises to provide piped drinking water to every household in the country by 2024.

 

Source – Reliance Securities, Page no – 12

Source – JM Financial, Page no – 25

Source – JM Financial, Page no – 132 

Source – JM Financial, Page no – 28

Source – Reliance Securities, Page no – 6

Source – Prince Pipe IP, Page no – 12

Source – Prince Pipe IP, Page no – 11

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