(MENAFN- UkrinForm) The decline began in 2022, and production indicators have continued to deteriorate since, Ukrinform reports, referring to the Foreign Intelligence Service's website .

Output has dropped in 18 out of 30 subsectors of plastics and rubber. From January to July, production fell by 6.3% compared to the same period last year. In July alone, output in categories such as pipes, plates, sheets, and films declined by 11–14% year-on-year. The worst-performing segment was polyvinyl chloride (PVC), which saw a 13% drop.

The industry is facing multiple structural challenges, including a shortage of domestic equipment, a disconnect between scientific research and engineering, a lack of skilled labor, and low productivity.

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The market is rapidly losing participants: 874 companies shut down in the first half of this year.

“Demand is falling, while a weak ruble, high key interest rates, and expensive credit are suppressing investment in capacity upgrades - last year, such investments dropped by nearly 30%,” the intelligence report states.

Additional pressure is coming from a proposal by Russia's Ministry of Natural Resources and Environment to increase the environmental levy fivefold and raise the recycling requirement from 25% to 50%. For polymer packaging producers, this would mean a sharp rise in costs and an inevitable increase in product prices.

As previously reported by Ukrinform, Russia is facing a significant budget deficit, leading to salary cuts and delays, as well as higher utility payments.

Photo credit: gov

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