POLYMERS Communiqué l February - March 201830

POLYMERS Communiqué l February - March 201831

Avinash Joshi, I.A.S.Managing DirectorONGC Petro additions Limited (OPaL)Dahej, Gujarat

“In a relatively shorter span of time, OPaL has been able to establish an efficient marketing channel network all across, enabling us to have a good customer reach. Product sales of over 8,00,000 MT clocking a turnover of Rs. 6,000 crore stands as testimony to the same,” shares Avinash Joshi, I.A.S. in dialogue with POLYMERS Communiqué.

Q. Being at the helm of affairs at OPaL, how do you see the polyolefins business globally and specifically in India?Petrochemicals play a vital role in the growth of any economy and are the backbone to many key industries like agriculture, packaging, infrastructure, healthcare, textiles and consumer durables.

The global demand for polyolefins stands at 170 Million Metric Tonnes (MMT) with various segments growing within a range of 3.9 - 5.3% in tandem with global GDP growth. The very nature of this commodity facilitates its trade on a global basis, thus endowing geographies with distinct economic edge having access to cheaper feedstocks.

India is the sixth largest manufacturing country in the world, exemplifying its sweet spot in the global economic landscape. At present, we have a domestic polyolefin demand of approx. 10 MMT that is growing in double digits. We have had experience of petrochemicals sector growing at a rate of 1.5 times the country’s GDP and this trend shall certainly continue. The Government of India’s thrust of ‘Make in India’, smart cities, water conservation and its specific focus on agriculture and key infrastructure projects shall remain growth drivers for the sector.

However, we are currently short in polyolefins thereby having net imports of approx. 1 million tonnes. This is likely to see a multifold growth owing to inability of local production to catch up the pace of demand growth. This indicates that the volatility in prices shall increase with much higher tradability of material in this scenario. It is high time that we build economic capacities based on plausible feeds to ‘Make in India’ and cater to our growing domestic need.

BIG STORY

POLYMERS Communiqué l February - March 201830 31

OPaL Sees Immense

OpportunityPetchem

Growing at 1.5 Times the Country’s GDP

While trying to create culture of ‘results’ and not ‘reasons’, we are building a

learning organisation engraining DNA of efficiency and

effectiveness.

POLYMERS Communiqué l February - March 201832

Q. How has been the OPaL business post commissioning of the mega petrochemical complex at Dahej?After the successful commissioning and inauguration of OPaL petrochemical complex by Hon’ble Prime

Minister Narendra Modi on 7th March 2017, it has been our endeavour to stabilise and ramp up operations to bring out world-class products for our customers in diverse markets.

In a relatively shorter span of time, we have been able to establish an efficient marketing channel network all across, enabling us to have a good customer reach. Product sales of over 8,00,000 MT clocking a turnover of Rs. 6,000 crore stands as testimony to the same.

We have managed to export 50,000 MTs of polymers to almost 25 countries including markets like China, Vietnam, Turkey, Myanmar, Malaysia etc.

Our vision is to become a world-class petrochemical company with dominant Indian presence and a preferred choice of customers in terms of quality & value, and we are putting our best efforts to achieve and sustain the same.

Q. At what capacity is OPaL currently operating at and how do you see it progressing in the coming months?We started the production in the month of March, 2017 after completion of pre-commissioning and

commissioning activities. We were operating at about 40% in the first couple of quarters of FY 17-18. We have been ramping up production, with stabilisation of operations in view, reaching 70% in Q4 of the FY 17-18.

Individual plants of the complex have been successfully tried at 100% operating rates, including the dual feed cracker. We do expect to ramp it up to 80 - 90% in the first two quarters of FY 18-19 and would make all out efforts to touch 100% capacity utilisation within the next 1 - 1.5 years.

Q. Do you wish to share any specific market response to your product categories?Our products have reached all consumption pockets in India and abroad. Overall response from the diverse market that we cater to, has been good. While the complex took some time to attain technical maturity so as to deliver product consistency; our team is equally geared up to address any of the concerns that our customers may have at any point in time.

OPaL, when fully functional, will be offering 76 different grades with the objective of curtailing imports. We have been able to introduce and establish our products in various markets in a short span of time, thanks to all our business partners and customers who have put faith in the brand, ‘OPaLene’. Exports of substantial quantity in the very first year of operations reinforce our confidence in the quality of our products. At present, the OPaL grade basket includes 13 - 14 grades with plans of introducing 8 - 10 grades in the coming year catering to a variety of applications. We are sure, we shall soon be the preferred supplier and a brand to reckon with, in the competitive landscape.

I have been blessed with diverse

experience. I have had a stint of over 25 years with State Governments and

Government of India. With OPaL, it is my first industry

experience. The journey has been challenging, yet

wonderful this far.

POLYMERS Communiqué l February - March 201834

Q. Importance of product differentiation in your business. Your thoughts.There is a little scope of product differentiation in the business of commodities. However, the latest and state-of-the-art process technology does provide us with certain head-room for product substitution and enhance domestic access of material, for which the country has resorted to imports for quite some time now. I do believe, access to competitively priced feedstock backed up by an equally efficient

operations and integrated supply chain can be a key differentiator in the business such as ours.

Q. How is the availability of OPaL products through its supply chain?The products, specifically polymers, are now reaching all macro and micro consumption

centres across India through our dedicated channel partners. We are also looking at options of augmenting the established domestic networks with consignment stockist operations and appointment of dealers with clear intent of strengthening the marketing network channels to maximise our geographical and customer reach, be it small customers as well.

So far as polymer exports is concerned, we are in the process of signing agreements with international offtakers. The exports through them shall kick off from the next fiscal resulting in multi-fold increase in the exports volume by OPaL.

While the domestic supplies in chemical streams are on ex-works basis, export parcels are being moved through empanelled chemical offtakers. Going ahead, with full scale of operations, the reach of our products across geographies will certainly be better.

Q. Your views on your human capital resource and constraints, if any... OPaL is a relatively nascent organisation into the domain of petrochemicals, which happens to be one of the sunrise sectors of the Indian economy. We have drawn relevant skilled and technical manpower from the same or similar domain from across the country and outside with due focus on local talent available, thus growing to a strong employee base of 942. With an average employee age of 31 years, OPaL is certainly a young company ready to make its mark in the field of petrochemicals. OPaL is also generating contractual employment for approx. 3,000 people as on date. We have embarked on stringent selection procedures in recruiting and building a team capable of realising our vision to become a world-class petrochemical company.

Q. As you go forward, does OPaL have any plans to have strategic investors from India or overseas?OPaL is a ‘standalone’ petrochemical complex and a company, that is one of its kind in India. With the strategic feedstock and locational access, OPaL has all possible ingredients to make it a successful venture, delivering a superlative value. We are looking to have investors on-board that have strategic or synergistic business interests akin to ours and we should be in a position to crystalise the same soon.

OPaL, when fully functional, will be

offering 76 different grades with the

objective of curtailing imports.

Travelling, to me, is like a refreshing dose of the much-needed oxygen!

POLYMERS Communiqué l February - March 201836

Q. What would OPaL witness in the next 5 years?

OPaL is certainly the newest jewel in the petrochemical arena. With the technology prowess to offer quality products at competitive prices, OPaL shall soon be one of the key players in the growing domestic petrochemicals market. In medium-to-longer term, we are open to make further downstream investments based on streams available for further value-addition after full-scale operations of the complex.

Further, with the intent to be a customer-centric organisation, we wish to reach out to all customers along the length and breadth of the country with our superior product and service value basket. We certainly intend to get rid of bottlenecks in supply chain embarking on ‘just in time’ deliveries for enhanced customer satisfaction. For the petrochemical industry, the best is yet to come and it’s certainly not far away.

Q. There have been growing concerns over use and misuse of plastics. One keeps hearing of banning the use as well. As one of the key stakeholders, how do you see the picture emerging?

Plastics is a wonder material that conserves valuable resources like energy and water. It enhances product’s functional and aesthetic value offerings to the user with higher life cycles. The negative connotations of plastics are purely on account of waste management, more specifically its disposal, recycling and reuse. I think more concerted efforts are required from all stakeholders; be it government agencies, municipalities, corporates and users alike. Raw material manufacturers, processors and end users have larger responsibilities to play in coming together to spread awareness about

positive attributes of plastics based on scientific facts and join hands with common masses in effective plastics waste management, starting from our homes first. As corporates, we need to take it up as focused CSR activity as a socially noble and economic cause.

Q. With a successful stint with the Government of India as an IAS Officer, what

is it that you have been doing differently at OPaL?I have been blessed with diverse experience. I have had a stint of over 25 years with State Governments and Government of India. With OPaL, it is my first industry experience. The journey has been challenging, yet wonderful this far.

OPaL is a nascent organisation which has been built brick-by-brick. It has been my endeavour to inculcate focus and agility in my team so as to value ‘we and our priorities’, backed by sound processes and systems. I am keen to look at interventions that will raise both, engagement and productivity through dedication, focus and deliverables with drive to achieve organisational excellence. While trying to create culture of ‘results’ and not ‘reasons’, we are building a learning organisation engraining DNA of efficiency and effectiveness.

Q. The Avinash Joshi, beyond petrochemicals...I am an avid reader and would love to grab one whenever I can. I also enjoy listening to classical Hindi songs. Beyond books and music, my innate curiosity is to explore nature, people and diverse cultures, which takes me to different places. Travelling, to me, is like a refreshing dose of the much-needed oxygen! I also like elements of adventurism in the form of trekking that instills a new zest and life in me.

It is high time that we build economic capacities based on plausible feeds to

‘Make in India’ and cater to our growing

domestic need.

I also like elements of adventurism in the form of trekking that instills a new zest and life in me.