Little choice for beverage cos but to import paper straws as deadline looms

Cost of importing paper straws goes up significantly as India doesn't have capacities to manufacture paper straws yet

Fast-moving consumer goods companies have been compelled to start importing paper straws, as the government’s deadline to ban plastic straws draws closer. The ban is effective from July 1.

Parle Agro, which sells beverages such as Frooti in small tetra packs, has already started importing paper straws. Dabur India, which sells its fruit juices in tetra packs under the brand Real, is also considering importing paper straws.
 

Parle Agro said in an email that it has begun to import paper straws to ensure that it meets requirements when the new rule is enforced, but it added that importing was not a sustainable option.

“The percentage increase in the cost of importing PLA (polylactic acid) and paper straws goes up by 259 per cent and 278 per cent respectively. The economics just does not match up with a ~10 product,” said Schauna Chauhan, CEO, Parle Agro.

Chauhan explained, “There is no infrastructure at present in India to be able to produce the quantum of straws required for the industry. If complete relief cannot be granted, we are seeking a six-month extension to set up local manufacturing capabilities and get them commercialised.”

Chauhan added that a six-month extension will help straw manufacturers in India to build adequate capacity to make and supply biodegradable straws to beverage companies. This will also help the beverage industry transition smoothly without facing the negative impact of heavy import and logistics costs and supply chain disruptions.

Parle Agro has also started to work on developing local micro, small and medium enterprises to be able to produce the required volume of biodegradable straws.

Currently, straws that come with the packaging are integrated and don’t come loose. “All our tetra packs use integrated straws that get discarded along with the pack after consumption as they are placed into the packs. Hence, they go into recycling along with the pack itself and we recycle 85 per cent of our packs,” she said.

Dabur India also maintained with its stance that there is no sustainable alternative for integrated plastic straws available in India today.

“Importing paper straws would also have cost implications on companies and lead to loss of revenue to the government exchequer. We would urge the government to extend the implementation date of the ban till proper infrastructure for producing paper straws locally is developed,” Mohit Malhotra, CEO of Dabur India told Business Standard earlier.

The Action Alliance for Recycling Beverage Cartons (AARC) has proposed an incremental transition plan to the Ministry of Environment, Forest and Climate Change. “We expect that by April-June quarter next year, the industry will be able to replace more than 50 per cent of the straws and complete the transition to paper straws by October-December next year,” Praveen Aggarwal, CEO of AARC, said.

He explained that European nations are also moving to paper straws and there are no manufacturing capacities in India. At the same time, the current global capacities are not enough to meet fresh demand. “India will have to import provided imports are available,” Aggarwal said.

AARC is also working to bring in bio-compostable straws made of polylactic acid. These straws are derived from plants. However, this will require approvals from various agencies — the Food Safety and Standards Authority of India, Central Institute of Petrochemicals Engineering and Technology, and the Bureau of Indian Standards. But the entire process will take at least nine months to a year, AARC added.