Bhubaneswar/Angul, Ap 21: The ongoing Middle East conflict has severely disrupted petrochemical supplies, impacting plastic manufacturing units across Odisha. Major industrial hubs, including Jagatpur (Cuttack), Mancheswar (Bhubaneswar), Khordha, and Balasore, have reported significant production challenges.
Over 100 large-scale plastic units and several hundred small-scale units are facing operational uncertainty. About 40% of units remain shut, while the rest are running at only 60% capacity.
Plastic production relies heavily on petrochemical feedstock derived from crude oil and natural gas. Naphtha and natural gas provide raw materials such as ethylene and propylene, which are converted into polymers including HDPE, LLDPE, PP, PVC, and PET. These materials are essential for producing pipes, containers, furniture, packaging, and other plastic goods. An estimated 6,000 products have been affected by supply shortages.
India imports most of its petrochemical raw materials, and sudden supply disruptions have caused prices to surge. For example, HDPE prices jumped from ₹91,452 per ton in February to ₹1.6 lakh in April, a 75% increase. LLDPE prices rose 77% to ₹1.61 lakh, while PVC increased 30% to ₹1.16 lakh. The rise in raw material costs has strained manufacturers’ operations, with many MSME units struggling to fulfill supply contracts.
Due to the price surge, many small units have halted production entirely, while medium and large units are operating at roughly 60% of normal capacity. Production of essential items like bags, pipes, fittings, bathsets, syringes, saline, and household products has slowed. Units dependent on Western Asia and European supplies have been particularly affected.
Exports have also been impacted by disruptions at the Strait of Hormuz, affecting plastic and pharmaceutical shipments. Logistic challenges, combined with rising raw material costs, have further complicated operations.
Local industry representatives have called for urgent government intervention to support MSMEs, many of which are unable to sustain operations under current price pressures. The Odisha Small Industries Association (OSMI) has written to the MSME Ministry, emphasizing that sudden price hikes are making production unviable and risking permanent closures.
