FMCG Giants Might Face Restrictions From Plastic Waste Management (PWM) Norms

Top Fast Moving Consumer Goods companies like Britannia, Nestle and Colgate would be impacted by the restrictions from the Plastic Waste Management norms, as this might lead to an increase in packaging costs for these FMCG Companies.

How will Plastic Waste Management norms impact these companies?

India is one the leading plastic waste generators in the world, Thus plastic waste management norms are thereby essential and should be implemented. India has introduced mandatory regulations for the recycling and reusing of plastic packaging starting from FY2025 to control the plastic waste menace. These regulations would lead to an increase in packaging costs for FMCG companies. The streets are thus expecting companies such as Britannia, Nestle and Colgate to be the most vulnerable here. The increase in packaging would be factored by reasons such as incorporating recycled content into packaging materials which often requires additional processing steps.

Research reports from analysts also mention that companies which have a higher proportion of hard to recycle flexible plastics and Multi-layered plastic products are estimated to incur higher costs. Companies such as Britannia, Colgate and Nestle with their high exposure to MLP are considered to be impacted the most by these plastic waste management norms. Colgate has the highest exposure to MLP products as toothpaste is mainly packed in nonrecyclable laminate tubes.

Which Companies will benefit from this?

Markets are expecting plastic recycler companies like Ganesha Ecosphere and also innovative packaging companies like Uflex Ltd, Essel Propack Ltd and ITC Ltd. to be the beneficiaries of these new plastic waste management norms, These companies would take this as an opportunity and provide solutions to make plastic recyclable and offer a cost-effective alternative to plastics.

Conclusion: The new plastic waste management norms need to be implemented as India is the third largest plastic waste generator in the world, these rules will ensure proper handling of the plastic waste menace but this would also lead to an increase in packaging costs for FMCG companies, But this in return can also be a sustainable move for the long run for these companies. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.