|
Indian chemical industry on an upswing
|
|
Our Bureau, Bengaluru
April 01 , 2015
|
|
|
Indian chemical industry is expected to garner revenues to the tune of $190 billion by fiscal 2017-18. This would be primary drive on the demand for a range of chemicals.
According to IBEF, the country’s chemical industry stands as the third-largest producer in Asia and 12th in world, in terms of volume. This industry could grow at 14 per cent per annum to reach a size of US$350 billion by 2021. India accounts for approximately 7 per cent of the world production of dyestuff and dye intermediates and is currently the world's third-largest consumer of polymers and fourth-largest producer of agrochemicals.
According to Tata Strategic Management Group's report titled Spurting the Growth of the Indian Chemical Industry, the current Indian market is estimated at around $118 billion which is three per cent of the global chemical market.
15% of manufacturing GDP
"The market for chemicals is highly diversified and accounts for over 80,000 chemicals. Presently this industry accounts for 15 per cent of manufacturing GDP which makes it very crucial for the economic development of the country," noted the report which was released by Union minister for chemicals and fertilisers Ananth Kumar at the FICCI's 8th India Chem International Conference 2014.
Industry experts see the need for a consensus between the government and regulatory bodies. This is because according to the Tata Strategic Management Group's report there is a low per capita consumption of chemicals across industries.
In order to stall the imports, India needs to give a fillip to its domestic manufacture. The NDA government’s 'Make in India' and Innovate in India action plan is being viewed as the next big manufacturing growth story.
US$350 billion by 2021
The market size of the chemical industry is expected to grow to US$350 billion by 2021. With 72 per cent of the total production share, alkali chemicals form the largest segment in the Indian chemical industry. Total exports of chemicals grew at a compound annual growth rate (CAGR) of 16.2 per cent to reach US$15.5 billion in FY13.
The Government of India has announced a number of measures to improve competitiveness in this sector, which includes abolishing of industrial licensing for most sub-sectors and granting 100 per cent approval to FDI.
The chemical industry has scope for growth in the specialty chemicals market which has expanded at a CAGR of about 12 per cent over FY07-11. The figure is expected to rise to 13 per cent over the next five years to reach US$45 billion by FY17. By 2017, the construction chemicals sector is also set to touch US$1,040 million. The polymer chemicals sector is anticipated to grow at a higher rate due to growth in plastic demand resulting from increased usage in packaging, construction and automotive sectors.
The chemical industry is an integral constituent of the growing Indian industry. It includes basic chemicals and its products, petrochemicals, fertilisers, paints, varnishes, gases, soaps, perfumes and toiletry and pharmaceuticals. It is one of the most diversified of all industrial sectors covering thousands of commercial products. This industry occupies a pivotal position in meeting basic needs and improving quality of life. The industry is the main stay of industrial and agricultural development of the country and provides building blocks for several downstream industries such as textiles, papers, paints, soaps, detergents, pharmaceuticals, and varnish.
APIs market
In addition, for the pharmaceutical sector, there are active pharma ingredients (APIs). According to Manoj C Palrecha, managing director, Lake Chemicals, the market for APIs across the globe is transcending from a price-sensitive phase to a quality-conscious one. Among the price-conscious countries are Latin America and South East Asia. But the global slowdown has seen a huge interest from the big pharma of the West to look at quality-conscious and price beneficial markets like India. The country’s expertise and plants will drive the opportunities.
"This will allow Lake Chemicals to capitalise on the demand. Our documentation efforts and value-added services like synthesis of impurities which have been much sought after," he added.
Export of pharma products calls for rigorous and painstaking efforts in submission of data and plant inspections. In the wake of the global economic slowdown, the pharma industry's efforts are towards payment recovery and to tap new markets. Further the slowdown has resulted in panic situation which has resulted in trimming down of inventories. The uncertainty in the international markets resulted in the big pharma not doing well, which has put a sudden brake on the development on the mid-sized API companies. Although it is after several years of robust growth, the world economy is facing some serious challenges in sustaining its brisk pace, API companies need to view the opportunities.
“This is where Government of India should look at a proactive policy in place. Simplify customs and excise requirements. The recent circular from the Central Drugs Standard Control Organisation to exporters is viewed as a heavy-handed regulation that could cloud the future of many mid-sized units. This unprecedented order from the Government of India has resulted in a negative sentiment among API units. The regulations will further result in time-consuming efforts and delay marring the export deadlines for many companies,” said Palrecha.
Boosting the industry
In order to increase the production of chemicals in India, Rhenus Logistics India Pvt. Ltd, the Indian arm of the globally valued Euro 4 billion Rhenus Group, has opened the second warehouse near Chennai, spanning an area of 55,000 sq ft early this year. It will exclusively cater to the chemical sector and boost the industry in Tamil Nadu.
The Pollivakkam facility is 12 km from Chennai-Bangalore Highway (NH4) which will be an added advantage. Several other multinational giants have their existence close to the facility.
With opening of this warehouse, the company now has two multi-user facilities, with about 1 lakh sq ft of warehousing space near Chennai. Due to the risk involved in handling and storing of chemical products, the industry requires highest level of safety. Now more companies can take benefit of the facility, as Rhenus is among the few logistics players in India which adheres to stringent environment and safety standards.
This warehouse is a state-of-the-art facility and fully enabled with latest technologies, facilitating the company to handle chemical products with the highest level of efficiency and safety. The warehouse is equipped with modern equipment and in-house warehouse management software Rhenus WMS that takes care of inventory traceability and transactions. It has a capacity of 6000 Pallet Positions (PP) with further scalability options, efficient Reach Trucks with the lifting capacity of G+7 racking systems for 1100 kg and forklifts for floor management. It has prospects of fulfilling both JIT and Milk run concepts.
The Pollivakkam facility has got clearance and approval from the Tamil Nadu Pollution Control Board (TNPCB). With this, Rhenus is probably one of the few logistics companies in India which has three PCB (Pollution Control Board) approved facilities for storage and operations of chemicals in India and they are also compliant with the HSE (Health, Safety and Environment) norms.
3 sub-groups
According to the department of chemicals and petrochemicals, Government of India, there are three sub-groups of chemicals. The first is Basic Chemicals. These include organic and inorganic chemicals, bulk petrochemicals, other chemical intermediates, plastic resins, synthetic rubber, man-made fibres, dyes and pigments, and printing inks. These are also known as Commodity Chemicals.
Derived from Basic Chemicals
The second is Specialty Chemicals or Performance Chemicals. These are low-volume but high-value compounds. These chemicals are derived from Basic Chemicals and are sold on the basis of their function. For example, paint, adhesives, electronic chemicals, water management chemicals, oilfield chemicals, flavours and fragrances, rubber processing additives, paper additives, industrial cleaners and fine chemicals. Sealants, coatings, and catalysts also come under this category.
The third is Agro - Chemicals. These essentially are meant for protecting agriculture crops against insects and pests.
Further, the country’s chemical and petrochemical industries occupy a pivotal position in meeting some basic human needs and improving the quality of life. The industry provides vital inputs required to augment food production and save crops from attack by a variety of pests in a safe and selective way. In addition, it also boosts the soaps, cosmetics and pharmaceutical and plastics industry growth. In addition, the sector in 2013 has attracted foreign direct investment to the tune of US$ 1618.2 million.
|
|
|
|
|
|
|
|
TOPICS
|
That foods might provide therapeutic benefits is clearly not a new concept. ...
|
|
|
|
|