In a press release shared by the company, Parle Agro reiterated that it has always invested in initiatives and projects with keen focus on sustainability. This includes large scale plastic recycling initiatives in partnership with national bodies to collect and recycle 100% of its PET bottle waste.
The release said while Parle Agro endorses the government-led ban on the use of plastic straws, their plea is to postpone the implementation of the injunction by six months.
India produces and sells a total of six billion packs of paper-based beverage cartons with integrated plastic straws per annum. Presently the available capacity to provide a replacement of plastic straws with PLA straws or paper straws by a local Indian manufacturer is 1.3 million straws per day as opposed to the actual requirement of approximately six million straws per day.
According to the company, the hasty ban will negatively impact the industry and overall businesses of numerous players in the FMCG and beverage segment.
Packaging companies will need to invest in the right infrastructure to accommodate the changes which will require time to ensure the alternative is appropriate and cost effective, especially during inflationary times. Currently, there is no local manufacturer who can accommodate the demand. Importing straws will be six to eight times more expensive making the cost of the product unaffordable; particularly products that are targeted at urban and rural markets.
For Parle Agro, 50% of the company’s turnover is from rural markets as their products are strategically priced to cater to consumers across every corner of India. The increase in cost of the product will lead to a fall in demand and affect sales significantly.
The release said, to replace the plastic straws, companies need six to eight months, to make the necessary changes in technology, and sourcing and ensure smooth transition to environment friendly options of paper or PLA.
“We support the noble intention of the government to ban the use of plastic straws. To implement the changes, we need a postponement of the ban by six months which will allow packaging companies to build the right infrastructure needed to source locally. Even getting approvals from regulatory bodies after appropriate testing to manufacture PLA straws will require time. While the transition process has already begun, the short deadline is a matter of great concern.” said Schauna Chauhan, CEO, Parle Agro.
The percentage increase in cost from plastic to PLA is approximately 122% but if companies were to import the straws, the cost goes up by 259% and 278 % for PLA and paper straws respectively. Therefore, the industry will require time until local manufacturing capabilities are commercialised, all of which are currently underway.