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Chemical Sector India
December 2013
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Table of Contents
I. Sector Overview
1. Sector Highlights
2. Main Indicators
3. Economic Linkages
4. Production
5. Production and Value Added
6. Costs and Prices
7. Bank Financing
8. FDI
9. Trade
10.Export
11.Import
12.Employment
13.Government Policy
14.Public Sector Undertakings
II. Chemicals
1. Subsector Highlights
2. Production
3. Apparent Consumption
4. Alkali
5. Inorganic Chemicals
6. Organic Chemicals
7. Pesticides
8. Dyes and Dyestuffs
9. Forecast
III.Petrochemicals
1. Subsector Highlights
2. Production
3. Polymers
4. Olefins
5. Aromatics
6. Fibre Intermediates
7. Synthetic Fibres
8. Forecast
IV.Main Players
1. Tata Chemicals
2. Tata Chemicals (cont’d)
3. UPL
4. BASF India
5. RIL
6. GAIL
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I. Sector Overview
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in charts throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
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Sector Highlights
The chemical and petrochemical sector is an important segment of India's economy, accounting for about 3-5% of the country's GDP
and 14-15% of the industrial activity according to different estimates. India's chemical industry was the 12th largest in the world in
terms of volume in 2011. In terms of export share, it is among the top 10 worldwide. Chemicals and petrochemical products account
for more than 10% of the country's exports.
Overview
Recent performance
Players
Challenges
Prior to the 2008 economic crisis, the chemical industry was among the fastest growing sectors in India. Highly connected with number of up-and down-stream productions, the industry was affected by the global slowdown. Nevertheless, the sector recovered quickly, with some segments remaining almost unaffected. It is the recent turbulence in the domestic economy that might slow-down the growth in the sector. Still, the demand has not shrunk substantially, while growing raw material costs have raised pressure on margins. Thus, companies are forced to optimise their production process.
The sector groups both small and large-scale enterprises. While the number of players in the chemicals subsector is huge,
petrochemicals production is generally a highly consolidated industry. Nevertheless, in all segments there are leaders, well-known
abroad with diversified structure and vertical integration that enables them to secure access to raw material.
Along with the need of technological modernisation of some of the facilities and the problematic access to cheap funding (as a result of
high domestic interest rates), a significant burden for the sector development is the lack of appropriate infrastructure in terms of
adequate facilities at ports and railway terminals and good pipeline and road connectivity. This makes the procuring of raw materials
more difficult and expensive.
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Source:
Main Indicators
Chemical and Petrochemical Sector Key Indicators
CEIC, MOSPI
Product 2007 2008 2009 2010 2011 2012
Chemicals production (mn metric tonnes) 7.8 7.4 7.7 8.2 8.4 -
Petrochemical production (mn tonnes) 21.6 20.5 22.0 23.3 26.2 -
Chemical and petrochemical export,USD bn 18.7 20.0 20.5 26.2 32.8 32.7
Sector export, % total 11.4 10.8 11.4 10.4 10.7 10.9
Chemical and petrochemical import, USD bn 25.3 36.4 31.3 39.5 49.6 49.7
Sector imports, % total 10.1 12.0 10.9 10.7 10.1 10.1
GDP at market prices (current prices, INR tn) 49.9 56.3 64.8 78.0 89.7 100.2
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Source:
Economic Linkages
Real GDP at factor costs
Industry and Manufacturing, constant prices
Agriculture, constant prices
Comments
MOSPI, Industry includes mining and quarrying, manufacturing, gas and water supply and construction
Industry accounted for 27% of India's GDP in 2012, keeping its
strong position in the country's economy, despite a lower-than-
average growth in the past couple of years. Manufacturing,
which includes chemical and petrochemical production,
accounted for about 56% of the industrial output and 15.1% of
the country's total product.
Agriculture, on which the development of agrochemicals
production is heavily dependent, had a 12% share in GDP.
39.0
41.6
45.2
49.4
52.4
55.1
9.3%
6.7%
8.6% 9.3%
6.2%
5.0%
2007 2008 2009 2010 2011 2012
GDP (INR tn) Change yoy, %
6.6 6.6 6.6
7.1
7.4 7.5
5.8%
0.1% 0.8%
7.9%
3.6%
1.9%
2007 2008 2009 2010 2011 2012
Agriculture (INR tr) Change yoy, %
11.2
11.7
12.8
13.9
14.4
14.7
6.3
6.6
7.3
8.0
8.2 8.3 9.7%
4.4%
9.2% 9.2%
3.5% 2.1%
10.3%
4.3%
11.3% 9.7%
2.7% 1.0%
2007 2008 2009 2010 2011 2012
Industry (INR tn) Manufacturing (INR tn)
Industry, yoy change, % Manufacturing, yoy change, %
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Source:
Industrial Production Indices
Average annual industrial index (FY 2005=100)
CEIC
Monthly industrial index (FY 2005=100)
Comments
Although chemicals and chemical products manufacturing follows the overall path of development of India's industry, the pace of change is
much more moderate. Despite the strong deceleration of India's GDP in 2011 and 2012, the IPI in the sector remained almost unchanged in
the first year and returned on the upward path in the later.
In 2013, the chemical sector production continued to increase, reaching new monthly all-time high in Aug 2013. The index dropped to 140 in
Sep 2013, but still remained substantially above the 2012 level (127).
121 132 135 126 130 119 131 132 124 131 134 135 137 138 145 140
178 177 176 175 182 176 191 194 191 207 176 173 175 183 176 176
168 167 165 163 172 166 179 182 176 194 167 166 165 172 165 166
Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13
Chemicals and Chemical Products Manufacturing Total index
101 110 118 115 121 123 123 127
110 127
150 154 161 176 181 183
109 123
142 145 153 166 170 172
2005 2006 2007 2008 2009 2010 2011 2012
Chemicals and Chemical products Manufacturing Total index
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Comments
Source:
Production and Added Value
The production structure of the chemical sector shows its high resource dependence. Inputs account for around 80% of the final output, with input prices having a strong direct impact on profit margins.
Operating in a closed and protected economy in the pre-liberalisation period of the early 1990s, India's chemical sector companies spent little on large-scale R&D and intellectual property development. The introduction of the product patent regime in 2005 and the need of modernisation and increase in value-added have pushed companies to invest more in R&D. Still India's chemicals sector spends 1-2% of the turnover on R&D, compared with 5-10% in developed countries.
Chemical sector output (thou tonnes) Chemical sector capital (INR bn)
CEIC, Times of India
2,894.0 2,823.6
3,540.8
459.2 565.7 617.9
2008 2009 2010
Total Output Net Value Added
1,16
9.6
1,15
2.3
1,24
4.8
1,39
0.2
1,43
5.5
1,76
5.9
1,53
8.8
1,52
8.8
1,72
8.1
2008 2009 2010
Fixed Capital Productive Capital Invested Capital
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Source:
Cost and Prices
Compound annual growth rate of energy consumption,%
India has relatively low energy consumption per
capita. In 2010, it stood at 0.6 toe, compared with a
global average of 1.9 toe. Nonetheless the total
energy consumption in the country is in the global
top three, following China and the USA (2012).
With the launch of the Energy Conservation Act
(2001) and National Action Plan on Climate Change
(NAPCC/2008) companies are required to make
regular review of energy consumption and to
undertake effective control on utilisation of energy.
According to Enerdata, the share of chemical
industry in the country's overall industrial energy
consumption has decreased between 1990-2009
from 9% to 8%.
Furthermore, after recording the highest growth in
1990-1994, the chemical industry is among the best
performers in the last two four-year periods, showing
a substantial drop in energy consumption growth.
With an increase of 7.7% it is well below the
manufacturing average.
The rising inflationary pressures in the past years,
however, were reflected in higher costs for the
chemical sector and also higher output prices.
Wholesale Price Index (FY2005=100)
CEIC, Enerdata, "Decomposition of Industrial Energy Consumption in Indian Manufacturing" Santosh Kumar Sahu, K. Narayanan
100
120
140
160
180
Apr
-09
Oct
-09
Apr
-10
Oct
-10
Apr
-11
Oct
-11
Apr
-12
Oct
-12
Apr
-13
Industrial Electirisity Chemicals Petrochemical Intermediates
Industries/Year 1990-94 1995-99 2000-04 2005-08
Aggregate Manufacturing 16.77 9.30 8.01 11.98
Chemicals 15.46 9.09 8.09 7.69
Diversified 12.87 5.57 5.64 18.63
Food&beverages 19.11 5.41 10.53 7.77
Machinery 18.84 9.43 5.43 9.10
Metals& maetal products 15.49 11.78 9.34 15.33
Miscellaneous manufacturing 18.08 5.46 4.88 7.52
Non-metalic mineral products 19.73 9.92 7.60 17.09
Textiles 15.86 6.49 3.92 7.84
Transport equipment 21.71 12.21 10.02 12.56
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Source:
Bank Financing
Chemical sector credit stock as at end-Mar of the perspective year
Outstanding credit as at end-Mar of the respective year (INR bn)
Chemical and petrochemical sector share in total industrial credit
Reserve Bank of India
87 12
3 163 18
7 235 29
8 360 40
5 460 49
5 537
62
82 10
6
98
92 14
3
138
143
158
269
276
72
72
70
83
92
88
100
235
333
441 49
8
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sep'13
Drugs and Pharmaceuticals Fertilisers Petrochemicals
559
626
756
857
1,07
9
1,27
0
1,59
2
1,71
5
14.9%
11.9%
20.8%
13.4%
25.9%
17.7%
25.4%
17.2%
2007 2008 2009 2010 2011 2012 2013 Sep'13
Chemical and petrochemical sector credit, INR bn
Annual change, %
8.0% 7.3% 7.2%
6.5% 6.7% 6.6% 7.1% 7.2%
2007 2008 2009 2010 2011 2012 2013 Sep'13
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Source:
Foreign Direct Investments
FDI in chemical sector (excl. Fertilisers)* Sector-wise distribution of equity FDI (2000-Sep2013)
CEIC, Department of Industry Policy and Promotion * calendar years data
400
248
602
451 450
659
339
476
3.6%
1.3%
1.8% 1.7%
2.1%
2.4%
1.5%
3.8%
2006 2007 2008 2009 2010 2011 2012 Jul'13
Chemical sector FDI, USD mn
Chemical sector in Total FDI Inflow, %
Services Sector 19.0%
Construction development
11.0%
Telecommunications 6.0%
Computer software and
hardware 6.0%
Drugs and pharmaceutica
ls 6.0%
Chemicals 5.0%
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Comments
Source:
Foreign Trade
Although India's total import of chemical and petrochemical products traditionally surpasses the value of exports, there is significant
divergence in trade balances among different product groups. India sells abroad colorants, synthetic fibres, aromatics and pesticides, as well
as some alkali, but is dependent on the import of organic chemicals and some polymers and olefins.
Net Export (USD bn) * Trade in Chemicals, % total trade *
CEIC, * Export/import analysis is based on trade statistics for the following product groups: HS28-29, HS31-34, HS36-40, HS54-55.
-3.2
-6.6
-16.
4
-10.
9
-13.
3
-16.
9
-17.
0
2006 2007 2008 2009 2010 2011 2012 12.2%
11.5%
10.8%
11.4%
10.4%
10.7% 10.9%
10.0% 10.1%
12.0%
10.9% 10.7%
10.1% 10.1%
2006 2007 2008 2009 2010 2011 2012
Export Import
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Source:
Export
Export by product group in value terms (USD), 2012
Chemical and petrochemical export by main product groups, USD bn
Top export partners in value terms (USD), 2012
CEIC, Department of Commerce, EMIS Insight calculations
42.5%
18.1%
9.7%
7.8%
7.3%
6.8%
5.4%
14.9%
Organic Chemicals
Plastics
Rubber
Man Made Filaments
Colourants
Man Made Staple Fibers
Parfumery and cosmetics
Others
0.8
1.1
1.0 1.9
1.8
1.3
7.2
7.5
7.4 9.
1 11.7
12.1
1.3
1.3
1.4
1.7
1.9
2.1 2.8
2.5
2.8 4.
0 5.3
5.2
1.4
1.5
2.0
2.3
2.6
2.2
1.4
1.2
1.4
1.8
2.2
1.9
18.7 20.0 20.5
26.2
32.8 32.7
2007 2008 2009 2010 2011 2012
Inorganic Chemicals Organic Chemicals Colourants Plastics Man Made Filaments Man Made Staple Fibers Total
10.8%
6.7%
4.3%
4.1%
4.0%
3.7%
3.4%
2.5%
2.5%
USA
China
UAE
Germany
Turkey
Brazil
Indonesia
Singapore
UK
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Source:
Import
Import by product group in value terms, 2012
Chemical and petrochemical import by main product groups, USD bn
Top import partners in value terms (USD), 2012
CEIC, Department of Commerce, EMIS Insight calculations
31.6%
19.3%
14.9%
10.6%
7.3%
1.5%
11.7%
Organic Chemicals
Plastics
Fertilizers
Inorganic Chemicals
Rubbers
Man Made Filaments
Others
2.8 4.7
3.4
3.8 5.8
5.3 8.
1
8.6
9.4 12
.6
14.4
15.7
4.6
12.0
6.0
6.2 9.
2
7.4
0.8
0.8
0.9
1.2
1.5
1.5 4.
1
4.5
5.5 7.6
8.4 9.6
1.5
1.6
1.8 2.9
3.9
3.6
25.3
36.4 31.3
39.5
49.6 49.7
2007 2008 2009 2010 2011 2012
Inorganic Chemicals Organic Chemicals Fertilizers Colourants Plastics Rubber Total
22.4%
8.9%
6.7%
6.1%
4.9%
3.2%
3.1%
3.0%
2.7%
2.4%
China
USA
Saudi Arabia
Korea
Germany
Thailand
Iran
Taiwan
Japan
Malaysia
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Comments
Source:
Employment
Chemical production accounts for about 5.3% of the employment in the manufacturing sector, the share remaining relatively stable over the
past years.
Although the government estimates a huge employment potential in the sector in the medium-term (8mn-9mn new jobs in the next decade), it
also emphasises on the need of skilled workers and probable shortfall of 8,000 -10,000 chemical engineers. To secure the availability of
qualified experts, the government plans to set up state-of-the-art departments at local universities as well as vocational training and diploma
institutes.
Employment Companies in the chemicals sector
CEIC, India Chemical Industry Five Year Pan (2012-2016)
8,456 8,418
11,202
5.4% 5.3% 5.3%
2008 2009 2010
Number of companies Share in Manufacturing, %
581,053 588,756 629,881
5.1% 5.0% 5.0%
2008 2009 2010
Number of employed Share in Manufacturing,%
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Source:
Government Policy
Foreign
Investment
Chemical sector projects could be 100% financed with FDI through the automatic route (i.e. without RBI approval of the
deal). Moreover, the manufacturing of most of the chemical products such as organic and inorganic, dyestuffs and
pesticides is licence-free.
An exception of the free production exists for several products, which are considered dangerous, namely hydrocyanic acid,
phosgene, isocynates, di-isocynates of hydrocarbons and their deliveries.
Prices
In an attempt to provide affordable fertilisers to farmers, the government controls the prices of several pesticides. Urea is
sold at statutory notified uniform sale price, and Phosphatic and Potassic fertilises are sold at indicative maximum retail
prices.
As of November 2012, the maximum retail price of urea has been marginally increased by INR 50 per metric tonne to INR
5,360 per metric tonne.
Assam Gas
Cracker
Project
To ensure feedstock availability, the government supports the Gas Cracker Project in Assam, Northeastern India. The
project was approved in April 2006 and is implemented by Brahmaputra Cracker and Polymer Ltd. The originally planned
project costs of INR 54.6bn was later revised to INR 89.2 bn. The financing would come as follows: a Capital Subsidy of
INR 46.90bn on fixed cost basis provided by Department of Chemicals and Petrochemicals; debt of INR 29.6bn and equity
INR 12.69bn. After several time and capital overruns the projects is expected to be completed in Dec 2013 and to generate
substantial employment, both direct as well as indirect, and to attract substantial investments in setting up of downstream
plastic processing industries.
Department of Chemicals and Petrochemicals, Federation of Indian Chambers of Commerce and Industry
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Source:
Government Policy (cont'd)
Research and
Development
Assessing the need for constant modernisation of the sector in order to keep track with global industry development and
preserve competitiveness, in the Five-Year Plan 2012-2017 the government states that the current R&D investment levels
should reach levels of 4% of sales, which implies spending USD 12bn by 2017.
To support the process the Working Group on Chemicals for the formulation of the 12th Five-Year Plan suggests the
government to:
• set-up of chemical council for innovation with representatives from government, chemical companies, industry
associations and highly respected research and educational institutes.
• establish an autonomous USD 100mn chemical innovation fund and INR 5bn technology up-gradation fund.
• regional clusters and innovation centrеs in universities dedicated to chemical industry should be developed.
The total provisional Five-Year Plan Budget for the chemical sector development is INR5.75bn.
Responsible
Care Initiative
India's chemical sector has been tarnished with two major accidents in 1924 and 1984, in addition to misuse of chemicals.
In order to boost corporate social responsibility, the Responsible Care Initiative, first implemented in the early 1990s, was
lately revived. It includes adoption of operations standards on voluntary basis. Currently more than 100 companies have
joined the initiative, with 25 of them having passed the audit process and being allowed to use the Responsible Care logo
on their products. The change in attitude towards more social responsible production is usually shown by larger
companies, while the smaller ones are lagging behind. Therefore many critics think the voluntary initiatives would not be
enough for a sustainable long-term change and government interaction (economic incentives) might be needed.
Five-Year Plan, The Economic Times
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Source:
Government Policy (cont'd)
Tax regime
As of early May 2013 India’s government raised customs duty on polymers from 5% to 7.5%. The action followed a long
standing requests from the industry. The tax hike affected duties on polyethylene (PE), polypropylene (PP), poly vinyl
chloride (PVC), polystyrene (PS) and ethyl vinyl acetate (EVA). The raw materials used for the production of these
polymers such as naphtha and ethylene still have a 5% duty Thus the higher customs duty on polymers should reflect in
better producers' margins. Taking into account the forecasted rising chemicals demand and the supply-demand gap for
many of the products, the higher duties would be easily passed on to end consumers.
The basic customs duty on most chemical feedstock is 2.5%. Import duty on most of the chemical products is at 7.5% ad
valorem. In general, the central excise duty rate for chemical sector is about 10%.
PCPIRs
Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) are specifically delineated investment regions in
India, created on a cluster-manner, thus combining manufacturing facilities with the associated services and infrastructure.
They could include one or more special economic zones, industrial parks, free trade and warehousing zones etc. , but at
least 40% of the designated area should be processing. The area of the investment regions is about 250 sq km. The state
government is responsible for providing power, water, road connectivity, as well as sewage linkages to the RCPIR. The
inner infrastructure is built and managed by a developer (public or private entity). The Cabinet Committee on Economic
Affairs has approved PCPIRs in Andhra Pradesh, Gujarat, Orissa and Tami Nadu. As of October 2013, the first three have
signed a Memorandum of Agreement with the local government and are at different stages of preparation.
Times of India; Ministry of Chemicals and Fertilisers
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Source:
Public Sector Undertakings
Hindustan
Organic
Chemicals
HOC was set up in 1960 with main sphere of activity – manufacturing of chemicals/intermediates which are required for the
production of dyestuffs, rubbers, pesticides, drugs and pharmaceuticals, etc. The products manufactured include phenol,
acetone, formaldehyde, nitrobenzen and aniline among others. The company had sales of INR 5.6bn in 2012 (3% y/y
increase), produced 146,760 tonnes (67.4% of the planned) but ended up the year with net loss of INR 1.38bn as
compared with net loss of INR 0.78bn in 2011.
Hindustan
Insecticide
Ltd
HIL was founded in 1954. Its factory in Delhi produced DDT to meet the demand of National Malaria Eradication
Programme. Currently, HIL is the largest DDT producer in the world. It also has facilities for pesticides production.
The company ended up 2012 with net profit of INR 29.2mn (INR 16.1bn in 2011), sales of INR 2,744.8mn(6.7%y/y
increase) and exports of INR 0.2bn. Thus the accumulated loss has come down to INR 13.8mn vs INR 43mn in 2011.
Brahmaputra
Cracker and
Polymer Ltd
Petrochemical sector joint venture company between GAIL (70%), Oil India Limited (10%), Numaligarh Refinery Limited
(10%) and the government of Assam (10%). It was set up in January 2007 to implement the Assam Gas Cracker Project.
As at Mar 2013 the physical execution of the project was 91% (out of 97.9% planned), with 23.4% being achieved in
FY’13.
Companies data
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II. Chemicals Subsector
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in charts throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
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Chemicals Subsector Highlights
Overview
After the decline registered in 2008, all chemical production segments have witnessed a recovery. The production of
alkali, which accounts for more than 70% of the subsector, has not only recovered to the pre-crisis levels, but
recorded an all-time high output in every year since 2009. Good performance is seen also in the dyestuffs and
pesticides segments, while the production of other inorganic chemicals and organic chemicals is yet to return to the
2007 levels.
Problems
The trade liberalisation in India since 2000 had a negative effect on the chemical sector. The sharp reduction of import duties has resulted in increased imports and dumping of cheaper products from other countries. Most affected are the producers of soda ash and caustic soda.
Other problem is the strong dependence of pesticides and fertilisers on agriculture. In 2012, the unstable monsoon and drought in many regions affected the growth of the country's agriculture sector.
Moreover, the agrochemicals segment is suffering from low capacity utilisation along with insufficient investment in R&D.
Market
Segmentation
Despite the on-going process of consolidation, most of the manufacturers still operate on a small scale compared to
global peers. There is room for further consolidation especially with respect to the organic chemicals industry.
Prospects
With low per capita paper consumption in India as against global average consumption, there is a good opportunity
for paper chemicals business in India.
The same is true for the agrichemicals. Pesticide consumption in the country is 0.6kg per hectare vs. global average
of 3-10kg per hectare. Restricted consumption is due to low purchasing power in the agricultural zones, but also to
unawareness of the existing products and difficult accessibility.
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Source:
Production
Production of main chemical groups (thou tonnes) State-wise chemicals production
CEIC
5,269 5,443 5,442 5,602 5,981 6,113
602 609 513
518
572 574
1,545 1,552
1,254 1,280
1,342 1,396 85
102
105 104
111 120
33 117
110 149
164 171
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2006 2007 2008 2009 2010 2011
Dyes and Duestuffs Pesticides Organics Inorganics Alkali
Gujarat 51.44%
Maharashtra 7.51%
Uttar Pradesh 7.47% Tamil Nadu
6.03%
Punjab 4.34%
Rajasthan 4.23%
Madhya Pradesh 3.80%
Andhra Pradesh 3.65%
Others 11.54%
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Comments
Source:
Apparent Consumption
The apparent consumption is calculated as the sum of production plus imports minus exports.
On aggregated level there is a strong tendency towards higher import quantities, which covers lower domestic production and provide resources for rising export.
Organic chemicals consumption increased at a CAGR of 13.5% in the years 2006-2011. While domestic production shrank from 1.5mn tonnes in 2006 to 1.4mn in 2011, imports increased by 15% and equaled 50% of the domestic output.
Regarding inorganic chemicals, the consumption rose at a compound rate of 8.4% in 2006-2011, as produced volumes remained almost unchanged and imports increased by almost 10%.
Organic chemicals (thou tonnes) Inorganic chemicals (thou tonnes)
CEIC, EMIS Insight calculations
3,19
2 3,76
0
3,80
7
5,32
1 5,87
5
6,00
6 2006 2007 2008 2009 2010 2011
4,81
8
4,21
6
3,07
8
5,28
0
2,35
4
7,21
4
2006 2007 2008 2009 2010 2011
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Copyright © 2014 EMIS, all rights reserved.
Source:
Alkali
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC
Developing at a CAGR of 2.% in 2004-2011, alkali production
represents about 73% of the total chemicals production in
India.
With 7mn tonnes capacity Indian alkali sector has a 4% share
of the world market.
With adequate salt resources, India has sufficient capacity to
meet caustic soda and chlorine demand.
The main competitor in the segment is China – with enormous
scale of production and lower costs.
5,272
5,475
5,269
5,443
5,442
5,602
5,981
6,113
2004
2005
2006
2007
2008
2009
2010
2011 Product 2006 2007 2008 2009 2010 2011
Alkali 7,072 7,490 7,490 7,677 7,698 7,698
Soda Ash 2,651 - 2,952 2,951 2,951 2,951
Caustic Soda 2,561 - 2,647 2,690 2,712 2,712
Liquid Soda 1,860 - 1,891 2,036 2,035 2,035
2,07
8
2,00
2
1,98
9
2,05
8
2,29
9
2,41
1
1,91
4
2,05
1
2,05
0
2,10
4
2,17
8
2,21
6
1,27
7
1,38
7
1,40
3
1,44
0
1,50
4
1,48
6
2006 2007 2008 2009 2010 2011
Soda Ash Caustic Soda Liquid Chlorine
- 25 - Any redistribution of this information is strictly prohibited.
Copyright © 2014 EMIS, all rights reserved.
Source:
Soda Ash
Wholesale Price Index (FY 2005=100)
Following the global dynamics, domestic soda ash
prices began to increase in 2011, continued into
2012 and stabilised in 2013. The dynamics were
result of both energy costs increases and distortions
in the soda ash supply with insufficient capacities in
some regions and over-capacities in Europe and
China. The short-term forecasts are for continuing
price rise.
India's soda ash demand rose by 12% in 2012. The
local market expanded strongly in H1, but witnessed
overcapacity in the later half.
Despite the trade measures introduced in India in
2012, low-cost soda ash imports from Europe and
China continued increasing, with domestic players
losing market position.
Due to the expected expansion of the flat and
container glass manufacturing in India in the coming
years (incl. through new plants), along with forecast
overall economic uptick and logical detergent and
chemical sectors growth, soda ash demand in India
is anticipated to grow 6% through 2016.
Soda Ash domestic consumption
CEIC
100
120
140
160
180
200
Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13
Caustic Soda & Soda Ash
Glass 26.0%
Detergent 37.0%
Others 37.0%
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Copyright © 2014 EMIS, all rights reserved.
Source:
Inorganic Chemicals
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC
India's other inorganic chemicals production has been growing
at a CAGR of 8% in the five years prior the crisis. The
production dropped in 2008-2009, but started to recover in
2010 and stayed on the rise in 2011.
Inorganic chemicals hold almost 7% of the total chemicals
production.
Carbon black accounts for almost 80% of the segment output
and 60% of the market in terms of capacity.
508
544
602
609
513
518
572
574
2004
2005
2006
2007
2008
2009
2010
2011Product 2006 2007 2008 2009 2010 2011
Inorganic
Chemicals 749 716 716 674 814 818
Calcium Carbide 142 - 145 112 112 112
Carbon Black 455 - 455 463 603 607
Titanium Dioxide 108 - 76 76 76 76
Others 43 - 40 23 23 23
92
97
67
22 45
66
422
427
371
219
452
448
63
59
53
61
64
52
25
25
21
15
11
8
2006 2007 2008 2009 2010 2011
Calcium Carbide Carbon Black Titanium Dioxide Other
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Copyright © 2014 EMIS, all rights reserved.
Source:
Organic Chemicals
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC
Annual methanol consumption is estimated at 1.5mn tonnes, the demand for the chemical growing at an annual average rate of 10%. In 2012-2017 no substantial change in the dynamics is expected, with official forecasts for the end-period demand at 2.5mn tonnes per annum. The insufficient current domestic production of about 0.4mn tonnes would drive imports up to cover the demand.
Similarly, acetic acid local production accounts for only 30% of the demand (0.6mn tonnes). Consumption is expected to reach 1mn tonnes by 2017.
Acetic alhydride demand is fully covered by domestic production.
Ethyl Acetate capacity was raised in the past years, resulting in higher production, while a decline was recorded in acetaldehyde capacity and output.
1,506
1,545
1,545
1,552
1,254
1,280
1,342
1,396
2004
2005
2006
2007
2008
2009
2010
2011Product 2006 2007 2008 2009 2010 2011
Organic Chemicals 1,889 1,940 1,940 1,978 2,011 2,026
Acetic Acid 349 - 351 301 301 301
Methanol 385 - 385 473 496 496
Formaldehyde 312 - 315 389 389 390
Ethyl Acetate 131 - 132 118 118 140
Others 713 - 757 697 707 698
288 31
6
203
146
156
161
396
352
238
331 37
0
360
235
243
232 26
0
267
264
164
182
108
59
32 65
88
91
93
104
115 16
7
539
551
488
439
434
445
2006 2007 2008 2009 2010 2011
Acetic Acid Methanol Formaldehyde
Acetaldehyde Ethyl Acetate Other
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Copyright © 2014 EMIS, all rights reserved.
Source:
Pesticides
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC, Government of India, Economic Survey 2012-2013;
The agrochemical segment accounts for 3.5% of the total chemicals market in India. Insecticides form the largest sub-segment, holding 55% of the crop protection market. The development is largely dependent on rice and cotton. Herbicides are the largest growing segment (20% of the total crop protection chemicals market).
Despite the quick development of the pesticides segment in the past several years, the current situation is not optimistic, as the industry is characterised by over-capacity and low capacity utilisation (below 60%), as well as unsustainable levels of production. Moreover there is a lack of investments in R&D and the formulation market is highly fragmented.
94
82
85
102
105
104
111
120
2004
2005
2006
2007
2008
2009
2010
2011 Product 2006 2007 2008 2009 2010 2011
Pesticides and Insecticides 145 146 146 164 168 174
Endosulphan 9.9 - 9.9 14.2 14.2 14.2
Monocrotophos 14.0 - 14.0 10.4 12.8 12.8
Acephate 9.2 - 9.2 9.8 11.0 11.0
Chlorpyriphos 9.1 - 9.1 11.7 11.7 12.3
Mancozab 20.7 - 20.7 42.8 42.8 42.8
Others 82.5 - 74.5 69.6 69.8 76.5
5 5 5 6
10
10
5 5 4 6 5
9 8
11
10
12 14
16
23 27
35
31
26
44
44
54
51
49
55
42
2006 2007 2008 2009 2010 2011
Monocrotophos Cypermethrin Acephate Mancozab Other
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Copyright © 2014 EMIS, all rights reserved.
Source:
Pesticides (cont’d)
Insecticides, fungicides, herbicides trade (thou tonnes) *
Total agrochemicals sales worldwide amounted to USD 53.73bn in 2012, recording a 7% y/y increase. Crop protection chemicals accounted for more than 80% of the total. Asia is the second largest market with share of about 16%.
India is the second largest pesticide producer in Asia and among the top five on the global market. At the same time, the country has a relatively low pesticides consumption compared to other economies. The per acre crop protection chemical usage in India was estimated at 800 grams compared to 16 kg per acre in the US. The demand for pesticides was estimated at 58,368 tonnes in 2011 and according to the Ministry of State for Agriculture will decline to 54,685 tonnes in 2013.
The consumption pattern of pesticides in India differs from the rest of the world. On the domestic market insecticides account for 76% of the consumption, whereas demand on the global market is mostly directed towards herbicides and fungicides.
In 2011, India's Agriculture Minister acknowledged that almost 70 pesticides that are prohibited in other countries are still used in India, mainly due to their low price.
India is net exporter of pesticides, with about 50% of the production being sold abroad.
Pesticide consumption (kg/ha)
Comments
Indian Chemical Industry Five-Year Plan 2012-2017, International Trade Centre, The Economic Times, International New York Times;
* calendar years data
16.6
13.4
10.8
4.5
3.0
0.6
Republic ofKorea
Italy Japan USA Europe India
110 14
3 160
155
206
215
-24
-32
-35
-50
-63
-62
2007 2008 2009 2010 2011 2012
Export Import
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Copyright © 2014 EMIS, all rights reserved.
Source:
Dyes and Dyestuffs
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC
Dyes and Dyestuff production is one of the most developed
segments, having linkages with various forward and backward
industries. Production meets more than 95% of domestic
demand. Most of the consumption (about 70%) comes from the
textile sector.
About 2/3 of the production is exported.
India's share of the global market is estimated at approximately
7%.
28
30
33
117
110
149
164
171
2004
2005
2006
2007
2008
2009
2010
2011 Product 2006 2007 2008 2009 2010 2011
Dyes and Dyestuffs 53 55 55 191 220 248
Acid Direct Dyes 0.2 - - 24 26 26
Disperse Dyes 6 - - 37 37 55
Organic Pigment
Colours 11 - - 13 13 23
Pigment Emulsion 6 - - 5 5 5
Reactive Dyes 6 - - 74 103 103
Others 14 - - 53 54 38
0
8 8 12
16
13
1
22
23
25
29
29
0 5 6 8 10
10 16
26
14 18
22
20
1
41
41
63
65 77
13
17
18 23
23
21
2006 2007 2008 2009 2010 2011
Acid Direct Dyes Fast Colour BasesOptical Whitening Agents Organic Pigment ColoursReactive Dyes Other
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Copyright © 2014 EMIS, all rights reserved.
Source:
Forecast
Targeted segment expansion in 12th Five-Year Plan (2012-2017)
The 12th Five-Year Plan includes official forecasts
and set targets for the development of the chemical
sector. They are as follows:
Organic Chemicals - Demand for basic organic
chemicals has a potential to grow at 10% y/y to
reach 5mn tonnes by 2017. To cater to this demand
and move towards self-sufficiency, the organic
chemical industry must reach a growth of 10-12% y/y
during the plan period.
Pesticides - the segment is expected to grow at 12-
13% y/y with domestic demand increasing by 8-9%
y/y and export demand growing at 15-16% y/y.
Based on the export potential and potential for
increased penetration in the domestic market, the
Indian agrochemical industry targets a size of
USD7.7bn by FY 2017.
Colorants – exports are projected to grow to USD
4.9bn by 2017. Driven by robust exports growth, the
Indian colorants industry has set a target to grow
from the present USD 3bn to USD7.5bn by 2017.
The targets imply that the industry must grow at a
rate of 12% y/y over the plan period.
Indian Chemical Industry Five-Year Plan 2012-2017
8%
12%
12%
12%
12%
13%
Alkali ChemicalIndustry
Colorants Pesticides OrganicChemicals
SpecialtyChemicals
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Copyright © 2014 EMIS, all rights reserved.
III. Petrochemicals Subsector
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in charts throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
- 33 - Any redistribution of this information is strictly prohibited.
Copyright © 2014 EMIS, all rights reserved.
Petrochemicals Production Highlights
Subsector
overview
Total petrochemicals production expanded at a rate of 5.2% in the five years to 2008. It witnessed a 5% drop in 2008, followed by a recovery and significantly higher annual growth of 7-12% in the period thereafter.
Polymers and synthetic fibres account for 60% and 30% of major petrochemicals production, respectively, and are 23% and 10% of all petrol-based products in India.
With 6.6 kg per capita plastic consumption India lags behind other developing countries like China (36.7 kg) and Brazil (24.6kg) and remains far behind developed countries like US (67.3kg)
Problems
Due to recent adverse investment climate, interest in investment in this sector has subsided. Official analysis
concludes that large scale capacity established in the Middle East on the back of subsidised feedstock, along with
high domestic energy cost coupled with high internal transaction costs have resulted in reduced interest in India’s
petrochemicals production in the past years.
Feedstock
Regarding resource availability, India has three cracker complexes based on naphtha and another three based on
gas, with total ethylene capacity of 2.9mn tonnes. More naphtha resources are expected from the upgrade of exiting
refinery projects and new green field facilities. The gas resources will be expanded with the completion of the gas
cracker project in Assam. Nevertheless, the new projects are progressing slowly and the sector development is
deterred by the lack of low-cost feedstock.
Installed
capacity
Although capacities for production of major petrochemicals like ethylene are enough to cover the local consumption
and have increased over the last couple of years, they are still below those of major competitors such as China,
which hurts India’s competitiveness in global perspective.
India’s manufacturing capacity of polymer products is estimated to reach 12 mn tonnes per annum in 2017.
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Copyright © 2014 EMIS, all rights reserved.
Source:
Production
Production of main petrochemicals groups (thou tonnes) State-wise petrochemical production
CEIC
Gujarat 61.9%
Maharashtra 14.8%
West Bengal 10.7%
Uttar Pradesh 4.2%
Tamil Nadu 2.5%
Haryana 1.7%
Others 4.3%
2,250 2,524 2,343 2,600 2,791 2,697
5,183 5,303 5,061 4,792 5,292 6,211
556 585
551 618 639
623 3,437 3,111
3,051 3,885
4,098
4,461
4,995 5,211 4,740
4,579
4,837
6,098
3,447 3,489
3,476 3,596
3,654
3,969
21,084 21,594 20,520
21,982 23,282
26,204
0
5,000
10,000
15,000
20,000
25,000
30,000
2006 2007 2008 2009 2010 2011
Aromatics Olefins Fibre Intermediates
Intermediates Polymers Synthetic Fibres
Total
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Copyright © 2014 EMIS, all rights reserved.
Source:
Polymers
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC, Times of India
Polymers are the largest segment in the petrochemical sector
in India, accounting for about 70% of the production. The
output expanded by approximately 18% in the five years to
2008. The decline in 2008-2009 was followed by quick recovery
in 2010 and in 2011 the segment reached the highest
production in the past decade.
Goldman Sachs calculations showed that polymer demand has
been increasing in India by 10.3% over FY09-13.
4,776
4,768
5,183
5,306
5,060
4,791
5,292
6,211
2004
2005
2006
2007
2008
2009
2010
2011Product 2006 2007 2008 2009 2010 2011
Polymers 5,187 5,777 5,720 6,130 7,406 7,450
Polypropylene 1,860 - 2,035 2,076 2,676 2,676
Poly Vinyl Chloride 985 - 1,105 1,279 1,279 1,279
772
837
817
683 89
7 1,03
3
958
974
942
856
887 1,
119
2,00
1
1,97
8
1,77
1
1,61
7
1,68
4 2,20
9
926
998
1,05
1
1,11
0
1,27
8
1,29
6
526
516
480
526
546
554
2006 2007 2008 2009 2010 2011
Linear Low Density Polyethylene High Density Polyethylene
Polypropylene Poly Vinyl Chloride
Others
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Copyright © 2014 EMIS, all rights reserved.
Source:
PE, PP and PVC
Comments
Poly Ethylene trade * (thou tonnes)
Polypropylene trade* (thou tonnes)
PVC trade* (thou tonnes)
International Trade Centre, ICIS; * calendar years data
Among the polymers, PVC consumption in India was estimated to be 2.25mn tonnes in FY12-13, expanding by about 13% y/y, compared with modest 3% y/y growth in FY’11-12. PVC is one of the major products where capacity growth had been significantly lagging behind demand growth, which resulted in substantial import. Imports rose by 33% in the past five years and by more than 40% yoy in 2012, when there was no capacity addition.
In the mid-term demand is expected to continue outpacing local production, due to strong infrastructure investment and focus on land irrigation expansion, where PVC pipes are needed.
On the other hand, PP production capacities cover not only domestic demand, but also exports, as India is net exporter of polypropylene. PP accounts for approximately 7% of the petrochemical market in the country. The PP consumption in 2012 was estimated at 3.3 mn tonnes (13% y/y increase).
212
357
744
808
742
-201
-474
-433
-385
-488
2008
2009
2010
2011
2012
Import Export
7.8
6.5
8.3
26.6
14.9
-376
-676
-831
-833
-1,181
2008
2009
2010
2011
2012
Import Export
157
49
92
291
220
-602
-1,030
-1,436
-1,047
-1,550
2008
2009
2010
2011
2012
Import Export
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Copyright © 2014 EMIS, all rights reserved.
Source:
Olefins
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC, The National Petrochemicals Committee of FICCI
Olefins are the major building blocks of the petrochemical industry. They represent 23% of the sectoral production and 25% of the installed capacities.
Ethylene capacity reached 3.78 MMT in 2011 and is expected to reach 6.5 MMT by 2016.
Propylene capacity was 2.88 MMT in 2011 and is forecasted to reach 5.3 MMT by 2016.
While the capacities of ethylene and propylene are enough to cater for domestic consumption, the supply-demand gap for styrene is significant (estimated at 496,000 tonnes in 2011).
Butadiene availability is also enough to cover local demand.
4,668
4,671
4,995
5,211
4,740
4,579
4,837
6,098
2004
2005
2006
2007
2008
2009
2010
2011 2006 2008 2009 2010 2011
Olefins 4,475 5,387 5,659 6,964 6,964
Ethylene 2,613 2,841 2,983 3,783 3,783
Propylene 1,581 2,270 2,381 2,886 2,886
Butadiene 281 276 295 295 295
2,68
3
2,81
0
2,63
9
2,51
5
2,66
5
3,32
0
2,08
9
2,15
7
1,88
7
1,85
9
1,93
0 2,52
8
223
244
214
205
242
250
2006 2007 2008 2009 2010 2011
Ethylene Propylene Butadiene
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Copyright © 2014 EMIS, all rights reserved.
Source:
Aromatics
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC
Aromatics followed a strong growth path, increasing at a CAGR
of 7% in 2004-2011. A marginal contraction in production was
witnessed only in 2008. In 2011 the output rose 8.6% y/y.
Paraxylene accounts for almost 2/3 of the installed capacity
and production.
Domestic demand for benzene has increased steadily and is
estimated at approximately 600 thou tonnes per annum. The
capacity installation has followed the rise in demand, so that
local needs are comfortably covered by production.
2,451
2,537
3,447
3,489
3,476
3,596
3,654
3,969
2004
2005
2006
2007
2008
2009
2010
2011 2006 2008 2009 2010 2011
Aromatics 3,528 4,327 4,213 4,340 4,343
Benzene 768 1,111 1,149 1,279 1,282
Paraxylene 2,086 2,296 2,218 2,218 2,218
886
867
880
823 94
5
1,00
2
1,92
5
2,13
7
2,15
5
2,22
3
2,13
7
2,39
4
636
485
441 55
0
572
573
2006 2007 2008 2009 2010 2011
Paraxylene Benzene Other
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Copyright © 2014 EMIS, all rights reserved.
Source:
Fibre Intermediates
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC
Accounting for about 17% of petrochemical production and
installed capacity, fibre intermediates increased at a CAGR of
6.6% in the period 2004-2011.
The segment production started to decline on annual basis in
2007, dropped further in 2008, before recovering in 2009 and
2010. In 2011 the fibre intermediates output reached its highest
ever level.
2,851
2,963
3,437
3,111
3,051
3,885
4,098
4,461
2004
2005
2006
2007
2008
2009
2010
2011 2006 2008 2009 2010 2011
Fibre Intermediates 4,181 5,354 4,774 4,954 4,954
Purified Terephthalic
Acid 2,998 3,073 3,873 3,753 3,753
Mono Ethylene Glycol 733 820 740 1,040 1,040
2,37
9
2,05
9
2,15
4
2,98
5
3,19
1
3,30
8
1,05
8
1,05
2
897
900
907 1,
153
2006 2007 2008 2009 2010 2011
Purified Terephthalic Acid Other
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Copyright © 2014 EMIS, all rights reserved.
Source:
Synthetic Fibres
Production, thou tonnes
Output by main product groups, thou tonnes
Installed Capacity, thou tonnes
Comments
CEIC
With synthetic fibres production being concentrated in Asia and
namely in India and China, the segment weathered the crisis
quite well. India's production declined slightly in 2008 but
quickly returned to growth and reached an all-time high level in
2010. The output declined by 3.4% y/y in 2011.
Domestic availability of raw material has been a unique
advantage for the Indian polyester industry. China's import
dependence reached 64% in the boom years.
1,875
1,906
2,250
2,524
2,343
2,600
2,791
2,697
2004
2005
2006
2007
2008
2009
2010
2011 2006 2007 2008 2009 2010 2011
Synthetic Fibres 3,246 3,431 3,461 2,970 3,013 3,213
Polyester Filament
Yarn 1,877 - 1,848 1,548 1,592 1,791
Polyester Staple
Fibre 1,057 - 1,266 1,174 1,174 1,174
1,19
4
1,35
0
1,26
2
1,34
5
1,49
6
785 91
9
843 98
0
1,03
6
272
255
239
275
258
2006 2007 2008 2009 2010
Polyester Filament Yarn Polyester Staple Fibre Other
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Copyright © 2014 EMIS, all rights reserved.
Source:
Forecast
Olefins, thou tonnes
Polymers, thou tonnes
Fibres, thou tonnes
Aromatics, thou tonnes
Report of the Sub-group on Petrochemicals I
Olefins FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017
Ethylene 3,785 6,805 3,867 7,087 82 282
Propylene 3,700 4,823 4,117 4,987 417 95
Butadiene 124 470 295 528 171 58
Styrene 496 647 0 0 -496 -647
Demand Capacity Gap
Fibers FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017
Purified Terephthalic
Acid 4,350 7,992 3,850 7,130 -500 -826
Mono Ethylene
Glycol 1,836 3,024 1,300 2,000 -536 -1,024
Polyester Filament
Yarn 1,973 3,500 2,582 5,216 609 2,276
Polyester Staple
Fibre 1,214 1,600 1,334 2,000 120 400
Demand Capacity Gap
Aromatics FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017
Paraxylene 2,306 4,576 2,477 5,201 171 624
Benzene 590 935 1,235 2,110 645 1,175
Toluene 440 650 270 270 -170 -380
Demand Capacity Gap
Polymers FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017
LLDPE 1,198 2,076 835 1,960 -363 -116
HDPE 1,657 2,573 1,825 3,090 168 517
PP 2,993 5,015 4,140 4,715 1,147 -300
PVC 2,087 3,102 1,330 1,635 -757 1,467
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Copyright © 2014 EMIS, all rights reserved.
IV. Main Players
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in charts throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
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Highlights
Source:
Tata Chemicals
Financial performance (INR bn)
Other indicators
Tata Chemicals was established in 1939 and is part of the
USD 100bn Tata Group. The company operates broadly in
three sectors – living essentials, industry essentials and
farm essentials through the production and distribution of
chemicals, crop nutrition and consumer products.
Tata Chemicals Limited (TCL) is currently the second
largest producer of soda ash in the world with
manufacturing facilities in India, the UK, Kenya and the
USA. The company is India’s leading crop nutrients
producer with its own manufacturing of urea and phosphatic
fertilisers and a leading player in the crop protection
business through its subsidiary Rallis. TCL is the pioneer
and India’s market leader in the branded, iodised salt
segment and Tata Salt has been recognised as India’s
leading food brand for more than five years.
Along with its operations in India, Tata has three units
abroad – Tata Chemicals North America, Tata Chemicals
Europe and Tata Chemicals Magadi Ltd, managed under a
single holding company.
As at 31 March 2013, the company had 43 subsidiaries (5
in India and 38 abroad).
The company’s profits for the financial 2013 were adversely
affected due to impairment of assets and goodwill at Tata
Consulting Engineers Ltd (TCEL) to the amount of INR
4.84bn.
Company data
2008 2009 2010 2011 2012
EBITDA margin 16% 19% 17% 15% 17%
Fixed Assets Cover 5% 6% 6% 6% 3%
EPS 27.59 25.61 26.10 32.88 15.72
Net debt/EBITDA 2.40 1.98 2.34 2.36 3.02
Return on invested capital 10% 10% 10% 10% 6%
Market Capitalisation
(INR bn) 33.29 79.82 87.16 88.31 82.13
126.
5 94.5
109.
0
136.
6
147.
2
20.0
18.4
18.6
22.8
21.6
6.1
6.5
8.4
6.4
4.0
-6.5%
7.8%
28.3%
-23.3%
-37.8%
2008 2009 2010 2011 2012
Turnover EBITDA Profit after tax PAT yoy change
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Source:
Tata Chemicals (cont’d)
Domestic chemicals market, 2012
Segment-wise revenue breakup, 2012
Product-wise revenue breakup, 2012
Geographical revenue breakup, 2012
Company data
In 2012, Tata Chemicals’ production of soda ash at Mithapur
was 693,396 tonnes compared with 690,181 tonnes in 2011.
The company also achieved its highest ever sales on the Indian
market of 691,372 tonnes of soda ash.
Tata Chemicals holds about 50% of the local sodium
bicarbonate market, reaching all-time high production of 86,724
tonnes in 2012 compared to the 80,285 tonnes produced in
2011. Soda Ash 39%
Complex Fertilisers 23%
Urea 10% Vacuum Salt
6%
Cement 2%
Other Income 4%
Others 16%
Chemicals 50%
Fertilisers 37%
Other Agro Inputs 12%
Others 1%
Asia 67%
America 18%
Europe 11%
Africa 4%
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Highlights
Source:
UPL
Financial performance (INR bn)
Other indicators
UPL, formerly known as United Phosphorus Limited,
is a global company operating in the sectors of
generic crop protection, chemicals and seeds
production. The company is headquartered in
Mumbai.
UPL is among the top ten agrichemicals producers in
the world. The company is the world’s largest
producer of Mancozeb, aluminium phosphide,
Devrinol, Cypermethrin and Monocrotophos.
As at 31 March 2013, UPL operated through 88 global
subsidiaries in 41 countries with a sales presence in
120 countries. The company had manufacturing units
in 23 countries, of which nine in India, three in France,
two in Argentina and one each in Vietnam, Colombia,
the Netherlands, Italy, Spain and China.
UPL is listed on both stock exchanges in India – BSE
and NSE, and the group has a market capitalisation of
around USD 2.5bn.
In July 2012, UPL acquired a 100% in the Dutch
company Agrochem, engaged in the production of
crop protection products. The deal provided UPL with
improved market presence on the European
agrichemicals market.
Company data
2008 2009 2010 2011 2012
EPS 9.88 11.40 12.45 12.03 17.12
EBITDA
margin 19.8% 18.8% 20.5% 19.0% 19.0%
PAT margin 8.8% 9.3% 10.0% 7.7% 8.0%
ROCE 16.6% 15.1% 15.3% 14.5% 14.8%
Market
capitalisation
(INR bn)
42.97 65.69 69.46 60.03 51.87
49.7
54.9
59.0
77.6
92.9
9.9
10.3
12.1
14.8
17.6
4.4
5.1 5.9
6.0
7.4
69.8%
17.1% 15.2%
1.7%
23.3%
2008 2009 2010 2011 2012
Revenue EBITDA Profit after tax PAT, yoy change
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Highlights
Source:
BASF India
Financial performance (INR bn)
Other indicators
BASF entered the Indian market as an independent manufacturing company in 1943. Initially, the firm was involved in the production of expandable polystyrene, but the portfolio expanded over the years.
Currently, BASF India specialises in the production of polymers, agrichemicals, textile chemicals, performance plastics, automotive and coil coatings, construction chemicals and others.
BASF has nine production sites and two R&D centres in India.
The company is in the process of building a new chemical production site at Dahej, Gujarat. The project, worth INR 10bn, will include a hub for polyurethanes manufacturing and will also house production facilities for care chemicals and polymer dispersions for the coatings and paper businesses. The production is planned to start in Q1/2014.
In 2012, BASF India has shut down the expandable polystyrene production due to strong competition along with high overcapacities and low margins.
Despite the turbulent market in 2012, BASF operations remained stable, with a sales increase of 12% year-on-year in in the financial 2012-2013.
In April-June 2013, unaudited financial results showed a 21% increase in net profit and 5% higher revenue from operations.
The company’s shares are listed on BSE and the National Stock Exchange of India (NSE).
Company data
12.4
14.7
31.2
35.2
39.4
0.7
1.0
1.2
1.0
1.1
15.5%
41.1%
21.7%
-14.4%
13.2%
2008 2009 2010 2011 2012
Sales Profit after tax Profit, yoy change
2008 2009 2010 2011 2012
Equity capital (INR bn) 3.9 8.7 9.7 10.5 11.4
Exports (INR bn) 0.6 0.6 2.3 2.2 2.7
EPS 24.35 25.00 27.22 23.30 26
ROCE 30.2 26.5 16.3 13.6 13.5
Number of Shareholders 25,606 44,184 42,963 41,556 40,843
Number of Employees 858 1 224 1 790 2 012 2 076
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Highlights
Source:
Reliance Industries Limited
Financial performance (INR bn)
Other indicators
Reliance Industries Limited (RIL) is part of Reliance
Group, founded in 1977 through an IPO. The
company’s development followed a backward vertical
integration path, thus expanding from the textile
sphere into the production of polyester, fibre
intermediates, plastics, petroleum refining and oil and
gas exploration.
Reliance is a global leader in the polyester yarn and
fibre production and among the top ten manufacturers
of several other petrochemicals.
The company holds 28% of the domestic PVC market,
63% of the PP market, and has shares of 18% in
HDPE, 37% in LLDPE and 42% in LDPE in 2012.
RIL announced the setting up of a Refinery Off-Gas
Cracker (ROGC) at its Jamnagar location. The facility
will have installed capacity of 1.4 MMTPA of ethylene
and 0.2 MMTPA of propylene. Products from the
cracker will be used for the new downstream
petrochemical facilities being built at the same
location.
RIL is listed on the Bombay Stock Exchange (BSE)
and the National Stock Exchange of India (NSE).
Company data
2008 2009 2010 2011 2012
Total Assets (INR bn) 2,457.0 2,510.1 2,847.2 2,951.5 3,185.1
Market Capitalisation (INR bn) 2,397.2 3,513.2 3,429.8 2,447.6 2,498.0
EPS 49.7 49.7 62.0 61.2 64.8
ROCE 20.3% 13.9% 13.2% 11.6% 11.2%
Net profit margin 10.5% 8.1% 7.8% 5.9% 5.7%
Debt/Equity ratio 0.63 0.46 0.44 0.41 0.40
Number of Employees 24,679 23,356 22,661 23,166 23,519
1,46
3
2,00
4 2,58
7
3,39
8 3,71
1
1,48
4 2,02
9 2,58
7
3,46
0 3,79
1
153
162
203
200
210
-21.3%
6.1%
24.9%
-1.2%
4.8%
2008 2009 2010 2011 2012
Operation Revenue Total IncomeNet Profit Profit, y/y change
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Highlights
Source:
GAIL
Financial performance (INR bn)
Standalone production (tonnes)
GAIL was founded in 1984 as a state-owned company, aimed at creating gas sector infrastructure. The firm entered the petrochemicals market in 1999 and the petrochemical business turned into one of its core activities.
Petrochemicals represent about 8% of the GAIL’s turnover and a quarter of its profit before tax.
The company holds 20% of the domestic petrochemicals market.
GAIL is the market leader in North India and runs the only HDPE/LLDPE plant in the region.
The company started a joint venture – Brahmaputra Cracker and Polymer Ltd, which is setting up a 280,000 TPA polymer plant in Assam.
GAIL owns a 17% in 1.1 MMTPA ethylene generation plant (OPaL) led by ONGC.
The company has a 32.5% share in another joint venture RGPPL. The entity operates one of the largest gas-powered generation facilities in the country and is building a 5 MMTPA liquefied natural gas terminal.
As at 31 March 2013, the polymer production capacity of GAIL was 0.41mn tonnes per annum. The company plans further expansion of the installed capacity through opening a new HDPE/LLDPE 500KTA plant in Pata, which is expected to become operational in the financial 2014.
GAIL is listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Company data
253.
6 274.
9 356.
7 447.
4 517.
4
42.8
48.2
58.0
63.5
65.6
28.3
33.3
40.2
44.4
43.7
17.7%
20.8%
10.5%
-1.6%
2008 2009 2010 2011 2012
Sales Profit before tax
Profit after tax Profit, y/y change
2008 2009 2010 2011 2012
HDPE/LLDPE 420,108 417,147 416,396 446,041 441,051
Ethylene 431,580 429,992 428,444 457,080 448,534
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Contact:
Corporate Headquarters
Nestor House
Playhouse Yard
London EC4V 5EX
UK
Voice: +44 207 779 8471
Fax: +44 207 779 8224
Americas Headquarters
225 Park Avenue South
New York, New York 10003
US
Voice: +1 212 610 2900
Fax: +1 212 610 2950
Asia Headquarters
Eucharistic Congress Bldg. No.
III
4th Floor, 5 Convent Street
Mumbai 400 001
India
Voice: +91 22 22881123
Fax: +91 22 22881137
Disclaimer:
The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness
of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional
Investor PLC take no responsibility for decisions made on the basis of these opinions.
Any redistribution of this information is strictly prohibited. Copyright © 2014 EMIS, all rights reserved. A Euromoney Institutional Investor company.
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