Petrochemicals Global Trends

&

Opportunities for Investment in India

Date: 5th Oct ’2018

A N JHA ,

Executive Director ( Petrochemical- Project )

Structure of Presentation

2

Petrochemicals Business- Environment scan

Petrochemicals Global Trends

Petrochemicals: Demand Supply Outlook

Opportunity for Investments

Conclusions

Petrochemical Business: Environment Scan

3

India is one of the Fastest growing large Economy

� Polymer Demand is growing at 1.5 times of GDP

Lower per capita Polymer consumption base

� 10 kg/capita compared to global average consumption of 35 kg/capita

Regional imbalance, Polymer per capita Consumption

� Eastern India : 3.4 Kg/Capita

� Northern India : 5.7 Kg/Capita

� Southern India : 7.6 Kg/Capita

� Western India : 17.0 Kg/Capita

Strong Govt. support to boost economy

� Swachh Bharat to boost Water & sewage network, Hygiene and sanitation

� 100 Smart cities

� Digital India

� Make in India/ Start-up India

� 100% FDI in food retail and many more initiatives

� Process Integration – Innovative design considering

downstream

� Utility Integration – Heat, Hydrogen, water, power, steam

Nitrogen, Air etc.

� Utilization of gas fuel - Utilization of Hydrogen, hydrocarbon

present in gas fuel as feedstock

� Crude to Chemicals / Petrochemical Refinery

RefineryRefinery &

Aromatics

Refinery ,

Aromatics &

Olefins

Crude to

Chemicals

Petrochemical Intensity

Index : 20%

Petrochemical Intensity

Index : 35-50%

Petrochemical Intensity

Index : 10%

Petrochemical Intensity

Index : 0%

Global Trends: Refinery- Petrochemicals Integration

Typical Global Refinery-Petrochemicals Integration model

5

Indian Polymer Growth Trend

6

Polymer demand (PE+PP) increased @ 10% CAGR during past 5 years

“Opportunity for Investment in Polymers”Source: ICIS Report, 2017

52996011

65448838

21230 21230

59797171

88029531

19870

28403

522 9861963 1937

-1360

7173

-5000

0

5000

10000

15000

20000

25000

30000

2011 2013 2015 2017 2025 2030

Production DEMAND IMPORTS

KT

A

Indian Fibre Intermediates Growth Trend

7“Opportunity for Investment in Fibre”Source: ICIS Report, 2017

39634314

51546345

10790 10790

51675856

6784 7511

11705

14647

1204 15421630

1166 915

3857

0

2000

4000

6000

8000

10000

12000

14000

16000

2011 2013 2015 2017 2025 2030

Production DEMAND IMPORTS

KT

A

Fibre Intermediates (PTA & MEG) demand increased @ 8% CAGR during past 5 years

India Supply Demand Scenario for Top Imported

Petrochemicals

S.

No

Product Domestic

Production

(KTA)

Demand

(KTA)

Imports in 2017

(KTA)

Value (Rs

Crore)

%CAGR

(2017-30)#

1 PVC 1444 3085 1658 8804 7.2%

2 PX 3160 3780 1320 6749 5.6%

3 Styrene 0 669 672 4661 4.8%

4 PP 4707 4486 504 3092 8.7%

5 HDPE 2065 2075 460 3062 9.0%

6 LLDPE 1761 2105 388 2774 9.3%

7 Methanol 220 1902 1697 2603 5.1%

8 LDPE 305 591 311 2353 5.2%

9 Metallocene

LLDPE

0 274 274 2348 8.9%

10 Polyether

Polyols

57 266 218 2257 6.6%

8*Source: Import data from the website of Department of Commerce, Ministry of Commerce & Industry

# ICIS Report, 2017

India Supply Demand Scenario for Top Imported

Petrochemicals

S.

No

Product Domestic

Production (KTA)

Demand

(KTA)

Imports in

2017 (KTA)

Value

(Rs. Crore)

%CAGR

(2017-30)#

11 Polycarbonate 0 138 142 2143 4.5%

12 Methyl Diphenyl

Diisocyanate (MDI)

0 146 146 1826 6.6%

13 MEG 1608 1985 434 1796 5.2%

14 Vinyl Chloride Monomer

(VCM)

995 1387 392 1771 7.8%

15 Styrene Butadiene

Rubber

143 297 169 1550 8.5%

16 Toluene 905 1285 385 1521 6.6%

17 Ethyl Vinyl Acetate (EVA) 1 159 160 1475 7.4%

18 Alpha Olefins 1 99 98 1417 6.1%

19 Phenol 35 283 253 1337 5.2%

20 Butyl Rubber 0 102 102 1320 9.0%

TOTAL 17,407 25,114 9,783 54,859

9

* Net imports of Petrochemicals has increased from Rs.10,601 Crore in 2007-08 to Rs. 54,859 Crore in 2017

*Source: Import data from the website of Department of Commerce, Ministry of Commerce & Industry

# ICIS Report, 2017

Petrochemicals : Investment Opportunities

10

Based on the domestic Demand-Supply Scenario and future growth rate,

opportunities exists for capacity enhancement of following products:

� Olefins (Polyethylene + Polypropylene)

� Poly-Vinyl Chloride (PVC)

� Methanol

� Styrene

� Ethylene Glycol

� Elastomers (SBR, Butyl Rubber etc.)

� Speciality Chemicals (Polyols, Hydrocarbon Resins, MMA/PMMA etc)

� Polyester Yarn/Fibre -- CP and Downstream

� Olefins -Value added compoundings

Supply Demand Scenario-Major Products, KTPA

11

S.No. Petrochemical Name Total Capacity

(Installed+Under

Construction)

Total Demand

Yr 2025 Yr 2030 Yr 2040

1 PE

(HDPE+LLDPE+LDPE)7683 10,430 15,068 29,493

2PP 8385 9440 13,335 22,734

3PVC 1482 5885 7610 11,425

4MEG 2400 3073 3740 5030

5Acetic Acid 633 1320 1534 2022

6SBR/PBR 470 803 1166 2172

7Butyl Acylate 340 254 325 529

Requirement of C2” and C3” Monomers

12

C2” Year 2017 2025

Monomer Requirement 6305 14520

Existing/Projected Production 4836 7304

C2”from Incremental Refining Capacity - 170

Net Capacity Required - 7046

C3” Year 2017 2025

Monomer Requirement 4486 9440

Existing/Projected Production 4707 7695

C3”from Incremental Refining Capacity - 440

Net Capacity Required - 1305

The monomer requirement is based on demand of bulk polymers namely PVC, PE & MEG as

per Petrochemical Perspective Plan-2040.

Cracker Capacity and Estimated Investment

13

Parameter Yr 2025

Balance C2” required from Crackers 7046

Balance C3” required from Crackers 1305

Total Number of Crackers required

(@1500 KTPA C2” Capacity)5

Approximate Investment (Rs Cr)1,75,000 - 2,00,000 (100% Gas feed)

2,00,000 - 2,25,000 (Dual feed)

� The Crackers may be Gas based or Dual feed based. The choice of feedstock will

depend on prevailing economics, feedstock availability, relative prices of feedstocks

etc.

� The feedstock availability from Refineries shall depend on capacity expansion projects

implemented in future.

� Beyond Yr 2025, In order to meet projected petrochemical demand of Yr 2040, on an

average one Cracker of 1.5 MMTPA capacity is required every year.

Capital Investment Estimations of Olefin Production

14Source ICIS

Short Term (Base cost)Value added Poly Olefins (Compounding & Others)

Mid Term (Standard cost)Poly Vinyl Chloride (PVC)StyrenePhenolElastomersPolyesters

Long Term (Immense cost)

Steam CrackersPoly Olefins (PE & PP)Ethylene Glycols

Strategy for Investment in Petrochemicals

Conclusions:

16

Deficit in Indian Petrochemical Markets & sustainedGrowth

Investment opportunity in olefins and specialitypetrochemicals & chemicals- High Value - Mid term/ LongTerm

Investment opportunity in Deep downstream in Yarn/Fibres and value added polymers . – Low cost - short term

17

Petrochemicals : Japanese Investment in

Neemrana, Gurgaon (India) & Others

18

Company Products

T S Tech Company Limited Resin based Automotive Products for

Motorcycle, seats and other parts

Roki Minda Company Pvt. Limited Automotive air intake system, carbon

canister, Power steering fluids, filters

Mitsui Prime advanced Composites India

Private Limited

Automotive interior and exterior

components

Mytex Polymers(Subsidiary of Mitsubishi chemical corporation, Japan)

High performance engineered

Polyolefin

Sekisui DLJM Molding Pvt. Limited Automotive Interior components.

Kingfa, Basell (Zylog), APPL, Hyundai,

Machino Polymer etc

Automotive Compounders with

Homo/RCP/ICP Polymers (35 - 100 MFI)