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Informist, Wednesday, May 7, 2025

 

By Rajesh Gajra

 

NEW DELHI – Lack of supply and production capacity of recycled plastic material are making it difficult for companies such as Dabur India Ltd. to get immediately compliant with the Indian government's amended rules on plastic waste management under the extended producer responsibility framework. The demand for recycled plastic is higher than the supply and the prices costlier than the existing packaging material, the management of Dabur said Wednesday in response to a specific question on the issue from an analyst during the company's post-March quarter earnings conference call with investors and analysts.

 

As per the amended rules, in 2025-26 (Apr-Mar), a company producing or using rigid plastic packaging will have to use a minimum 30% recycled plastic packaging. The same minimum requirement is 10% for flexible plastic packaging and 5% for multi-layered plastic, as per the tweaked rules. According to the management of Dabur, if the government were to mandate these rules then companies like Dabur will have no option but to meet the minimum threshold requirement of recycled plastic packaging.

 

But the industry, including Dabur, has represented to the government to give them time till there is enough production capacity and supply of recycled plastic packaging in the country and till such a time as it becomes cheaper, the management said. "In terms of cost, it (recycled plastic packaging) is pretty expensive," the management said.

 

Dabur India is also reluctant to use recycled plastic packaging material in its food and beverage, and ayurvedic, products, the management said. It argued that Dabur India is akin to a healthcare company where 50-60% of the portfolio is coming from wellness foods and products.

 

"As far as personal care is concerned, which is 50% of the (products) portfolio, we can use recycled plastic," the management said. But it warned that even in this case the expensive existing packaging material will have an implication on the gross margin and the operating margin of the company. On Wednesday, shares of Dabur India closed 0.3% higher at INR 482.10 on the National Stock Exchange of India.  End

 

Edited by Akul Nishant Akhoury

 

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