PETROCHEMICALS INDUSTRY IN INDIA
Indian Petrochemicals Corporation Limited (IPCL) was a petrochemicals company
in India. It was established on March 22, 1969, with a view to promote and encourage the use
of plastics in India.
Its
business
consists
of polymers, synthetic
fibre, fibre
intermediaries, solvents, surfactants, industrial chemicals, catalysts, adsorbents, and polyesters.
The Company operated three petrochemical complexes, a naphtha based complex
at Vadodara and gas based complex each at Nagothane near Mumbai and at Dahej
on Narmadaestuary in bay of Khambhat. The Company also operates a catalyst manufacturing
facility at Vadodara. Its turnover for the financial year 2005-06 has crossed the US $ 2 billion
mark.
In June 2002, the Government of India as a part of its disinvestment programme divested 26%
of its equity shares in favour of Reliance Petroinvestments Limited (RPIL), aReliance Group
Company. RPIL acquired an additional 20% equity shares through a cash offer in terms of
SEBI (Takeover Regulations) and currently holds 46% of Company's equity shares.
The Board of IPCL consists of ten directors led by Shri Mukesh Dhirubhai Ambani as
Chairman, five independent and five non-independent directors.
Effective April 1, 2005, the six polyester companies namely Appollo Fibres Limited (AFL),
Central India Polyesters Limited (CIPL), India Polyfibres Limited (IPL), Orissa Polyfibres
Limited (OPL), Recron Synthetics Limited (RSL) and Silvassa Industries Private Limited
(SIPL) have been amalgamated with IPCL. This marks the entry of the Company in the
polyester sector. The polyester units are based
India's petrochemicals industry has been one of the fastest growing industries in the
Indian economy. It provides the foundation for manufacturing industries such as
pharmaceuticals, construction, agriculture, packaging, textiles, automotive, etc. The major
accelerator for the growth of the petrochemical industry in India is its ongoing economic
development. The Indian petrochemical industry faces a number of challenges for sustained
growth, putting India at a competitive disadvantage in the competition with China. India's
ethylene capacity is far smaller than China's and is unlikely to rise above its Asian rival's levels
in the next 5-7 years. This will make it impossible for India to develop application further
downstream.
Other major issues faced by the Indian petrochemical industry are lack of low cost
feedstock and dependence on western countries for technology. New crackers and derivatives
projects announced are making slow progress and their coming on stream might be further
delayed.
The petrochemical industry in India is oligopolistic with four main players dominating
the market, namely Reliance Industries Ltd. (RIL) along with Indian Petrochemical
Ltd. (IPCL), Gas Authority of India Ltd (GAIL), and Haldia Petrochemicals Ltd. (HPL). One
of the major advantages that this industry has to itself is a competitive range of labor cost and a
huge trained talent pool. Meanwhile, insufficient basic infrastructure, prevalence and use of old
technology and high feedstock cost in comparison to Middle East countries are some setbacks
it continues to face.
However, it is anticipated that the output growth of almost $200 billion from the current
$83 billion will be made within the coming decade. The future of the Indian petrochemicals
industry is bright with domestic demand driving the market for products. With Government
support slowly falling into place, the future could see more investments from multinationals as
well as domestic companies.
In this industry scenario, Taiyou Research analyzes the Petrochemicals Industry in
India. The report covers the following:
- An analysis of the global petrochemicals industry in the aftermath of the Japan earthquake
and the nuclear disaster in Japan. We analyze the global petrochemicals industry in 2011 and an
outlook for the industry.
- An analysis of the petrochemicals industry in Asia in order to establish the importance of the
Indian petrochemicals industry in the region.
- An analysis of the petrochemical industry in India including market profile, market size for
the period ranging from the year 2000 till 2015, the total installed capacity of petrochemicals in
India, major petrochemical complexes in India segmented by state and according to
performance, the installed petrochemical capacity in India by feedstock, by production process,
and by technology, the consumption of petrochemicals in India by end use sectors, market
share of leading players in the petrochemical industry, a look at the mergers and acquisitions
profile of the industry and the latest industry developments.
- We analyze the aromatics and derivatives segment of the Indian petrochemical industry
through a market profile, aromatics and derivatives complexes in India, market size for the
period 2000-2015, the installed capacity of aromatics and derivatives by feedstock, and the
market share of the leading players in the industry.
- We analyze the olefins and derivatives segment of the Indian petrochemical industry through
a market profile, olefins and derivatives complexes in India, market size for the period 20002015, the installed capacity of olefins and derivatives by feedstock, and the market share of the
leading players in the industry.
- We analyze the methanol and derivatives segment of the Indian petrochemical industry
through a market profile, methanol and derivatives complexes in India, market size for the
period 2000-2015, the installed capacity of methanol and derivatives by feedstock, and the
market share of the leading players in the industry.
- We analyze the styrene and derivatives segment of the Indian petrochemical industry through
a market profile, styrene and derivatives complexes in India, market size for the period 20002015, the installed capacity of styrene and derivatives by feedstock, and the market share of the
leading players in the industry.
- We analyze the vinyls segment of the Indian petrochemical industry through a market profile,
vinyls complexes in India, market size for the period 2000-2015, the installed capacity of
vinyls by feedstock, and the market share of the leading players in the industry.
- We carry out a brief analysis of the Indian fertilizer industry as well.
- A SWOT analysis of the Indian petrochemical industry is carried out, along with a look at
industry trends and major projects in the industry. Projects in the industry are analyzed through
company profiles as well as industry segments, namely aromatics and derivatives project
profiles 2011-2015, olefins and derivatives project profiles 2011-2015, styrene and derivatives
project profiles 2011-2015, and vinyls project profiles 2011-2015. Companies whose projects
are analyzed include Indian Oil Corporation, Oil and Natural Gas Corporation, Reliance
Industries, and Others.
- Regulations impacting the Indian petrochemical industry are analyzed.
- Major industry players are analyzed through a company overview, analysis of business
segments, a look at their strategies, and a SWOT analysis. For Haldia Petrochemicals, Indian
Oil Corporation, and Reliance Industries we also analyze their petrochemical capacities
worldwide and in India, along with their overall petrochemical capacities by commodity as
well as their petrochemical complexes.
- Industry outlook for the Indian petrochemical industry includes an overall market outlook,
and outlook for petrochemical demand and production, petrochemical price forecast, forecast
for petrochemical trade. Forecasts for the various industry segments are also divided in a
similar manner.
Taiyou Researchs report on the Petrochemicals Industry in India is a complete profile of this
growingly competitive industry in India that is fast making its presence felt across the world.
http://www.researchandmarkets.com/reports/1878608/petrochemicals_industry_in_india
Overview of petrochemicals industry:
As per national industrial classification, the chemical industry encompasses more than 80000
products and basic chemicals, petrochemicals, fertilizers, paints, soaps, perfumes, gases, and
other commercial products. The products are broadly classified as (a) basic chemicals, which
are in turn processed and converted to (b) downstream chemicals that find use in industrial and
agricultural applications (dyes, fertilizers, adhesives) or (c) direct consumer market chemicals
(cosmetics, pharmaceuticals, paints, etc.).
Petrochemicals are derived from various chemical compounds, mainly hydrocarbons obtained
from oil and natural gas. These include synthetic fibres, polymers, elastomers, synthetic
detergents, plastics, olefins and aromatics, and find use in daily need items ranging from
clothing, furniture, construction, agriculture to medical appliances.
The chemical industry contributes significantly to the economic stability and development of a
country. It provides key linkages in terms of products and technical solutions to several
downstream industries like engineering, automotive, consumer durables, food processing, etc.
The global chemicals industry is the largest manufacturing industry in the world, with sales of
approximately USD 2.5 trillion in 2010; the Indian chemical sector was estimated to stand at
US $91 billion in 2011 and has the potential to reach US $134 billion by 2015.
Growth potential of the chemicals sector is immense, considering the current low per-capita
consumption in the country. It is one of the fastest growing domestic sectors, comprising of
both small and large scale enterprises, and is currently in a state of restructuring and
consolidation. This movement aims to achieve product innovation, branch building, improved
technical services and marketing abilities to stand through global competition. A recent report
by global consultancy firm McKinsey suggests that around $350bn of the estimated $1tn world
specialty chemical industry would move eastwards to Asia to meet manufacturing costs and
downstream demand.
The petrochemical sector has been one of the fastest growing sectors in the Indian economy.
From its modest beginnings in mid-sixties, this industry has come a long way. Today, plants of
global capacities operate in specialized categories and supply to both local and global markets.
Four main players dominate the petrochemical sector, namely, Reliance Industries Ltd. (RIL),
Indian Petrochemical Ltd. (IPCL), Gas Authority of India Ltd. (GAIL), and Haldia
Petrochemicals Ltd.
The Indian petrochemical industry is presently valued at $40bn and is expected to grow at 1215% annually over the next five years, according to a report from the Associated Chambers of
Commerce and Industry of India (Assocham). The sector currently employs more than 10 lakh
people.
Factors that will drive growth in the chemical and petrochemical sectors
Compared to US and China, Indias per capita consumption of polymers (PO +PVC) is
still in nascent stage. Opportunity to reach out to a large population and sustain the current
economic growth would drive Indias polymer consumption.
Asia and Middle East, which provide abundant sources of petrochemical feedstock, are
fast becoming hubs for foreign investments.
Indian government plans to establish new petroleum, chemical and petrochemical
investment regions (PCPIRs) in states like Tamil Nadu and Karnataka.
Low cost infrastructure that India can offer will drive exports projected to reach $300bn
by 2015.
Large unexplored reserves of oil and gas stand to create new opportunities.
Challenges ahead
Indian chemical industry needs to maintain competitiveness and cost-effectiveness to overcome
competition from foreign players and also invite funds. Procurement of raw materials and
feedstock from oil and gas rich countries requires efficient management. There is a growing
need to build support for new technologies, green initiatives and R&D.
For the petrochemical industry, the main areas that demand attention revolve around
overcoming economic difficulties and energy concerns wherein looking at environment
friendly methods to reduce carbon dioxide emissions will draw focus. There is a need to
develop trade and logistics infrastructure to cater to the demands of both domestic and export
markets. According to the Planning Commission, the current logistics cost of the Indian
economy is over 13 percent of GDP, which is higher than that of developed countries. Further,
research and development is a critical area for the petrochemical sector since new applications
lead to synthesis of new and more advanced polymers.
http://info.shine.com/Industry-Information/Petrochemicals/912.aspx
