By Asmita Pant
Published May 6, 2024
CNBC-TV18.com
Starting April 2024, at least 30% of all plastic in packaging must be recycled plastic.
The benchmark for the use of recycled plastic will increase to 60% by 2028.
Consumer companies spend 5-8% of their revenue on plastic packaging, according to Kotak Institutional Equities.
Companies that use more plastic in their packaging will have to spend more to either find an alternative or in sourcing recycled plastic.
Analysts say Britannia, Colgate and Nestle will face the biggest impact from the new norms.
Companies like Ganesha Ecosphere, which recycle plastic, will benefit from the new norms.
Shares of Ganesha Ecosphere are up nearly 19% since close on March 28 to now (May 6).
Other companies that offer alternative packaging material, like Uflex, EPL, and ITC, will also benefit from the new rules.
Companies like Reliance Industries and Uflex, which offer chemical recycling, may also benefit from the increased recycling in the longer run.
There are two types of plastic recycling: mechanical and chemical.
In mechanical recycling, plastic is crushed and the granulate is used to make new plastic products.
Chemical recycling splits the plastic into components like crude oil and naphtha, which can then be used as raw materials for other products.
However, chemical recycling currently costs twice or thrice as much as regular recycling, according to analysts at Kotak Institutional Equities.