There are large number of local players and recyclers who account for ~35% of the total market.
PVC compound which is 70-75% of COGS consists of resin, additives (calcium) and stabilizers (titanium di-oxide) which are required to be mixed in prescribed proportion to manufacture a pipe of a standard quality (Ideal proportion being 85:10:5). Additive (calcium) is 1/10th of resin cost. Local players manipulate the mix of PVC compound (60:35:5) to achieve low manufacturing cost.
Source – ValueQuest
Raw Materials –
Raw-material for plastic pipe i.e., PVC resin and additives together account ~70-75% of the total COGS. In India, ~ 56% of the total demand of PVC resin is met through imports. There are limited domestic resin suppliers. One of the largest domestic resin suppliers is Reliance.
Unlike large players who enjoy 4-8% discount by procuring resin from Reliance or by directly importing from international resin manufacturers, small players procure resin from importers or distributors by paying a premium of 2-3%. Due to this, large players enjoy a cost advantage of 6-11% over small players. Small / regional players try to eliminate this differential by manipulating the mix of PVC compound!