Putting it on paper: Closure of plants feared over plastic straw ban

Parle Agro, the makers of Frooti, might have to stop operating its plants making small tetra packs because the company fears the delivery of imported paper straws, made mandatory by the government, could be affected owing to global capacity constraints and logistical and distribution drawbacks.

Apart from Frooti, its flagship juice brand, it sells apple drink Appy and flavoured milk range SMOODH in tetra packs.

With the government banning plastic straws with effect from July 1, the Rs 6,000-crore small tetra pack (between 75 ml and 250 ml) industry making beverages, juice, and milk brands like Parle, Amul, and Dabur have no choice but to shift to paper straws, which are more expensive.

However, despite lobbying for an extension of the deadline by a few months, there has been no response from the government.

Schauna Chauhan, chief executive officer (CEO), Parle Agro, said:Schauna Chauhan, CEO, Parle Agro, said: “India has high demand and to meet additional needs, none of the Chinese or South East Asian Manufacturers have the capacity to supply immediately. Their delivery timeline itself is 3 months and the situation of containers not reaching on time is on-going and will continue for a longer period. As an industry, we are still unclear on the status of the stocks on shelves if the ban comes through. If paper straw arrivals are delayed due to logistical and distribution drawbacks, there will be a complete stoppage of plants which will further lead to loss of sales. Hence, the extension is critical at this stage, for smooth operations and development of local manufacturing capacities. Additionally, we must bear in mind that industries are recycling 80 percent of the integrated straws, which are completely different from loose straws. South East Asian countries like China, Thailand and others have allowed the use of integrated straws.”

She said it was not clear what would happen to the current stocks if the ban was enforced.

“If paper straw arrivals are delayed, the plants will stop working.”

Chauhan said extending the deadline was “critical” for developing local manufacturing capacities.

According to the Action Alliance for Recycling Beverage Cartons (AARC), which has been lobbying for this, FMCG companies using tetrapacks need more than six billion straws annually.

Praveen Aggarwal, association CEO, said only 50 per cent of the global demand for paper straws, a large chunk of it is from Europe, was being met this year.

“Despite paying a higher price for paper straws than we do for plastic straws, we estimate import can meet only 25 per cent of the demand in India till the end of the year. Because of the global shortage, India comes low on the producers’ priority.”

While 30-40 per cent of the paper straws are manufactured in China, the rest comes from Indonesia and some countries in Europe. The prices, say FMCG companies, are two to three times higher than those of plastic straws. Being a temporary measure, companies have to absorb the cost. However, the permanent solution is to manufacture it in India, but, Aggarwal said, the delivery of the machines to manufacture them would take at least a year.

The July 1 ban is for 22 products, which, apart from plastic straws, include spoons, forks, and plates. However, according to Chauhan, 80 per cent of the integrated straws (straws attached to tetra packs) recycled in India are different from loose straws.

Countries like China and Thailand have allowed using such straws. India has not done so.

Clutching at straws

• Paper straw shortages continue as demand has outstripped supply globally
• India might not get even 25% of its requirement till December-end as it is not a priority market
• Only China, Indonesia and some European countries make paper straws
• Logistics and distribution issues impacting delivery