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Membership invited for plastics warehouses in U.S.

By Our Special Correspondent

CHENNAI, JUNE 1. The Plastics Export Promotion Council (Plexconcil) and the Commerce Ministry have invited applications and suggestions in respect of the Ministry's project to set up two warehouses initially in the U.S. for finished plastic products.

Suggestions on modalities for operation of the scheme, under the Government's Market Access Initiative (MAI) entailing substantial assistance for exporters, will be considered at a meeting of the committee concerned on June 10, according to S. Ramasundaram, Joint Secretary in the Ministry.

The MAI project for plastics involves the setting up of two warehouses and associated display centres in or around Los Angeles and Chicago initially, and later at New York and Miami on the U.S. east coast. The project is particularly suitable for exporters who already have a market in the U.S. and who can cut distribution costs and delivery time by participating in a common warehouse of Indian exporters, and those who are capable of using an initial presence in the U.S. to build contacts with distributors and retailers. Assistance is also available under the MAI for participation in trade fairs and promotion of products through print and electronic media, including the Internet.

According to a survey done by Frost and Sullivan, on which a presentation was made at the seminar by Anant Rangachary, China commands the largest market share (up to 70 per cent) in the U.S. in a wide range of consumer goods in the plastics sector. However, the scope for Indian exporters is bright, especially in respect of kitchenware/tableware, household articles and toiletries, writing instruments, soft luggage, personal care products and moulded furniture. The survey emphasised that exporters should adopt a culture of forming cartels and avoiding price undercutting, even while being competitive in respect of quality and cost vis--vis exporters from China (where many polymer products are made by foreign companies), Taiwan, Canada, Mexico, the Philippines and Japan.

Rajan Kalyanpur, Executive Director, Plexconcil, said participants in the warehousing project should decide whether to undertake joint promotion and marketing or undertake these talks on an individual basis. The project could have scope for a combination of both these modes. An entity would be floated in the U.S. to operate the project. Legal counsel will be hired to render advice on issues like U.S. regulations on collection/disposal/recycling of plastic material and product liability. Permission would be sought from the Reserve Bank of India for deferred payment terms and consignment sales.

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