First let’s look at the immediate requirement, packaging of essential goods. As of now the cycle is broken. Most if not all essential goods, such as food, medicines, medical equipment etc are packaged using recycled plastic (on the outside: No direct contact with the product) and mostly recycled cardboard. In terms of plastic, shrink wrap & LD wrap is used to keep products secure & snugged. These products are then packaged in cardboard boxes of a particular dimension for ease in logistics. This chain is completely broken as of now, despite orders in place to let unit’s supplying packaging for essential goods to operate.
The demand is huge and will continue to rise, but the supply side will not be able to meet this demand if the entire chain including collection, recovery, aggregation, pre-processing and final processing at recycling plants are not given the same concessions. Soon (I feel within the next week or so) these packaging units will start running out of stock & with limited raw material coming in to their facilities production will stall. This will create pressure on the system again as demand for packaging material will rise but supply will not be able to meet it, forcing the government to open up recycling facilities that provide the raw material to these packaging units.
Soon the mills & other recycling units will be up & running but will face the same fate as packaging manufacturers. After recycling their stock of raw material these mills too will be forced to slow down & shut shop as the supply chain of scrap plastic, OCC, paper would still not be functional. This again would put pressure on the system, forcing the government to release a new set of guidelines allowing the collection, aggregation & supply of required raw materials to various processing facilities across the country.
This scenario as mentioned above should start playing itself out within the next week or two. We already have E-commerce warehouses opening up. All of these warehouses are serviced by private enterprises, in terms of collection of waste and scrap with collection of waste & scrap scheduled to start from these facilities the moment they open. All vendors servicing E-commerce companies will be allowed to function if they fall under the essential services category. But the question is what will they do with the massive amounts of OCC and plastic that’s generated from these sites & how long would they be able to stock it and pay these companies under contractual obligations if processing units remain closed. This will force these organisations to either charge a fee for collection of recyclables till such time as they can stock it in their warehouse, post which they will refuse collecting material for which, until yesterday competition was cut throat. Similar scenarios will play out at FMGC manufacturing facilities and distribution centres across the country.
Hence in my opinion it’s critical that the entire chain be allowed to function as of yesterday. This as mentioned above will happen within the next few weeks. Speaking to numerous mill owners and recycling facility operators it is clear that they realise that the packaging industry can only function for a limited period of time without their support. At our end we have realised that the processing units can only function for a limited period of time without the support of companies like ours doing the collection aggregation, pre-processing & transportation of raw materials to these recycling facilities. All three sectors now need to realise that their functioning is interdependent on each other and that of support from the government.