Indian plastic pipes industry size is estimated at around 2.5 million tonnes per annum. There are around 600 manufacturers of pipes, with the top 20 players accounting for 60 per cent of the market, and small players for the remaining 40 per cent.
While large manufacturers make the pipes needed for all domestic, agricultural and industrial applications (such as casing pipes, bore well column pipes, electrical & telecom ducts, agricultural pipes), smaller one’s manufacture pipes needed for last mile connectivity. These include plumbing systems, irrigation systems, electrical conduits and conduit fittings, mostly made of HDPE, LLDPE and PPR as explained in the table below.
*Poly-Propylene Random Copolymer
The Government spend on agriculture sector and irrigation schemes continues to be the main driver of pipes. For instance, Mission Bhagiratha, Telangana government’s initiative to provide piped water supply to every household in the state has given impetus to the pipe industry here. Apart from the main trunk pipelines for about a length of 5,000 km, the mission requires secondary pipelines, stretching over 50,000 km. These secondary pipelines will carry water to tanks in villages from where a village-level pipeline network extending 75,000 km will supply water to households in the state. The village level pipelines specifically require HDPE pipes.
In value terms, the Indian plastic pipes market stands at INR 22,000 Crores and is forecast to grow at a CAGR of 10%. The market is dominated by PVC pipes that account for more than 70% (see figure 1)
Figure 1: The figure below depicts the polymer share of plastic pipes and fittings industry
Apart from national level players such as Astral Poly Technik Limited, Supreme group of companies, Finolex industries, there are a large number of local companies, as shown in the Table 2. The local companies have strong dealer network in their region.
Manufacturing process can broadly be divided into: mixing, extrusion, pipe sizing and down streaming. The extrusion line is customised to users’ needs, and the most important parameter is pipes’ diameter and wall thickness.
- Formulation & mixing: This is required for PVC but not for any of the above-mentioned material.
- Extrusion: Single screw (compulsory for HDPE and LLDPE) and Twin-screw extrusion (TSE). According to the experts, if quality is imperative, one must use TSE, as it can work even without the impact modifiers and flow promoters.
- Pipe sizing: This can be in two ways; a) Pressure sizing, which is suitable for higher diameter pipes and b) Vacuum sizing, which is suitable for lower diameter pipes.
- Down streaming: This includes a number of functions such as cooling the pipes, cutting the pipes, Socketing and printing.
The entry level plant (One extrusion line for manufacturing pipes for construction and irrigation industry of capacity about 100 Kg per hour) can be set up in INR 3 Crores including land, building, and working capital. Requirements for working capital would be large due to large raw material inventory and dealer credit.
Table 3 gives typical cost of machinery, which may change according to the specifications such as wall thickness and diameter of the pipes.
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 Source: Finolex’s MD, Saurabh Dhanorkar interview with DNA – May, 2016
Source; Livemint news article – August, 2016.
Source: HDFC securities – initiative coverage – May, 2017