Ahmedabad: Gujarat’s plastic manufacturing units are facing challenges after a steep rise in raw material costs, driven by higher crude oil prices linked to the Israel-Iran war. Industry representatives said the hike in polymer prices has disrupted production across segments, tightened working capital and pushed many factories into underutilisation.Gujarat contributes an estimated 35% to 40% of India’s total plastic output and has more than 10,000 manufacturing units, making the cost shock especially significant for the state’s industrial base.“Raw material prices have almost doubled in the last six months, and that has hit working capital badly,” said Ramesh Thummar, co-chairman of Plexpo and a representative of the Gujarat State Plastic Manufacturers’ Association (GSPMA). “Small units can now purchase only half the raw material with the same amount. Capacity utilisation has dropped below 50% for most units. If the situation does not improve soon, some units may shut down after Diwali.”Despite near-term pressure, industry leaders pointed to emerging demand drivers that could support medium-term growth. Thummar said new avenues are opening for the sector even as firms grapple with current cost volatility.Pankaj Jain, chairman of Plexpo, said demand is rising from new-age industries. “Plastics consumption is increasing in electric vehicles and the solar sector, and this can lead to a new wave of growth,” he said.GSPMA announced it will hold its flagship plastic exhibition, Plexpo-2027, in Gandhinagar in September 2027, with more than 900 exhibitors expected to participate.
