indian petrochem

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indian petrochem

  1. 1. Polyolefin Markets in India Ujjal De Vice President Head – Marketing & Business Development Haldia Petrochemicals Limited, India Indian Petrochem – 2006, Mumbai, India
  2. 2. <ul><li>Contents - </li></ul><ul><ul><li>Global PO Industry </li></ul></ul><ul><ul><li>Indian PO Demand Supply </li></ul></ul><ul><ul><li>New Capacities - India </li></ul></ul><ul><ul><li>Demand Drivers & Growth prospects </li></ul></ul><ul><ul><li>PO Prices & Margins - India </li></ul></ul><ul><ul><li>PO Future Outlook - India </li></ul></ul><ul><ul><li>Conclusion </li></ul></ul>
  3. 3. PO Global Demand Supply - 2005 Million MT Source – Nexant 105 mmtpa … Demand Supply Net Trade
  4. 4. Indian PO Industry Structure – Capacity 2006 PE - 1975 KT PP - 1895 KT PO - 3870 KT 3.4 % of Global Capacity
  5. 5. PO Demand Supply – India, KTA Transformed to net exporter … Source – CPMA & Industry PE PP PO
  6. 6. Capacity Additions - India
  7. 7. Capacity Additions - India 5.3 mmtpa addition in next 5 yrs Fig in KTA 360 ONGC 60 GAIL 460 360 600 900 75 Total PP PO PP PE 1000 1020 650 0 250 Total PE 400 75 HPL 900 RIL Gp. 600 IOC 1250 650 2009 1380 1020 2010 ONGC 200 100 GAIL 325 150 2007 2011 2008 900 1460 800 Total IOC HPL
  8. 8. Source – Industry Est PE 4290 KTA PP 137 % capacity addition, 5.3 mmtpa , in next 5 yrs Projected Capacity – India, KTA 146 % 4895 KTA 126 %
  9. 9. PE PP Net export surplus – 2.9 mmtpa … significant player Source – Industry Est India’s Likely Trade – 2011, KTA Growth rate @ 10 % YOY Growth rate @ 12 % YOY 1685 1230
  10. 10. Growth Drivers - India
  11. 11. Growth Drivers - India <ul><li>Robust Economic Growth – 8 % </li></ul><ul><li>Indian Demography </li></ul><ul><li>Growing Retail Sector, Automobile and Consumer Goods </li></ul><ul><li>Change in Govt approach– </li></ul><ul><ul><li>Inviting FDI in Petrochem Sector </li></ul></ul><ul><ul><li>Cluster Development – PCPIR, each with 250 Sq Km area </li></ul></ul><ul><li>Focus on Food Processing & Micro-Irrigation projects </li></ul>
  12. 12. PLASTICS Packaging Doors Panels Component / Battery Plasticulture Packaging Pipes Films Food Processing Consumerism Lifestyles Infrastructure Automobile Agriculture Housing Roads Cement Consumer goods TV / Fridge Mobile/ Washing Machine Retailing Economic Growth Demography
  13. 13. Growth Drivers – Major Sectors
  14. 14. Growth Drivers - PP Volume Share - % CAGR - % Raffia PPCP BOPP Fibre & Filament IM - HP IPP Source – CrisInfac & Industry Est < 10 10 - 20 > 20 < 8 8 - 12 > 12
  15. 15. Growth Drivers - HDPE Volume Share - % Inj Molding Wire & Cables RAFFIA Blow Molding HM Film Pipe CAGR - % Source – CrisInfac & Industry Est < 10 10 - 20 > 20 < 8 8 - 12 > 12
  16. 16. Growth Drivers – LLDPE Roto Molding Butene Film Film – Oct / Metallocene Volume Share - % CAGR - % < 10 10 - 20 > 20 < 8 8 - 12 > 12 LL Injection &Master batch Source – CrisInfac & Industry Est
  17. 17. Prices and Margins -
  18. 18. Feedstock rise > Polymer … Squeezed Margins Naphtha HD Film PP Inj Pricing – SE Asia, $/MT Source – Platts, Naphtha – FOB AG & Polymer – CFR SEA 2006 – Upto October 27.8% 26.6% 2004 2005 2006 2004 2005 2006 2004 2005 2006 13.4% 12% 8.4% 18.5%
  19. 19. Less Increase in India … Import Duty in 2005 Pricing – SEA vs. India Source – Platts & Dom Industry, SEA Prices - $/MT CFR India Polymer – NOM Landed Mumbai @ 54 MT Slab 2006 – Upto October SE Asia PP Inj HD Film India PP Inj HD Film 2004 2005 2006 2004 2005 2006 11.3% 4.8% 3.4% 18 % 2004 2005 2006 2004 2005 2006 13.4% 12% 8.4% 18.5%
  20. 20. Margins – Indian PO Industry <ul><li>Increase in Feedstock Naphtha price was much higher than Gas </li></ul><ul><li>Indian PO Industry is pre-dominantly Naphtha based. </li></ul><ul><li>Steep increase in Feedstock price could not be transmitted to </li></ul><ul><li>downstream Polymers </li></ul><ul><li>Polymer Margins got further squeezed due to successive reduction </li></ul><ul><li>in tariff barrier (45.4 % in 2001 to 5.5 % in 2006 ) </li></ul>Under pressure …
  21. 21. Challenges – Indian PO Industry
  22. 22. Challenges – Indian PO Industry <ul><li>Sustain Margins of Petrochem Manufacturers </li></ul><ul><ul><li>Successive reduction in Import duty </li></ul></ul><ul><ul><li>Compete with Low Cost Middle East supplies </li></ul></ul><ul><li>Petrochem Manufacturers to remain profitable during down-cycle </li></ul><ul><li>Achieve double digit per capita all Polymer consumption by 2011 </li></ul><ul><li>Increase Indian’s share in Plastics Processed Exports </li></ul>
  23. 23. Processed Plastic Exports – Snapshot Despite steady growth, long way to go … 2005 - mmtpa Source – Plexconcil India Indian Exports - Billion USD China S Korea Thailand Malaysia India
  24. 24. Potential – US Market Huge potential … 1.2 mmtpa of PE Resin
  25. 25. Potential – Europe Market Huge market …
  26. 26. Success Stories – Processing & Machinery Sector
  27. 27. Jain Irrigation Systems Ltd. - <ul><li>Pioneered in Micro Irrigation System </li></ul><ul><li>Only company in WORLD producing complete Irrigation System </li></ul><ul><li>Acquired Chapin Watermatics Inc, USA, pioneered in Drip Tape </li></ul><ul><li>Economy of Scale – Fully utilized 100 KTA capacity </li></ul><ul><li>Accredited with ISO 9001 & 14001 </li></ul><ul><li>Sophisticated R&D Lab, recognized by Ministry of Science & Tech. </li></ul><ul><li>Turnover of 200 million USD with exports at 35 % </li></ul>Complete Irrigation systems under one roof
  28. 28. Jain Irrigation Systems Ltd. - Integrated solution provider … <ul><li>Land Survey </li></ul><ul><li>Water Analysis </li></ul><ul><li>Climatological Data </li></ul><ul><li>Hydraulic Design </li></ul><ul><li>Installation </li></ul><ul><li>MIS </li></ul><ul><li>After Sale Service </li></ul>Drip Irrigation <ul><li>Wide Range: 35-315 mm </li></ul><ul><li>PE 63 / 80 / 100 </li></ul><ul><li>IS - 4984 </li></ul><ul><li>IS - 4427 </li></ul><ul><li>DIN 8074 </li></ul><ul><li>ASTM D3035 </li></ul><ul><li>BS - 6437 </li></ul>HDPE Pipes <ul><li>Consultancy & Engineering </li></ul><ul><li>of Agri product </li></ul><ul><li>Largest Pool of </li></ul><ul><ul><li>Agriculture scientists </li></ul></ul><ul><ul><li>Engineers </li></ul></ul><ul><ul><li>Technicians </li></ul></ul>Manpower Strengths
  29. 29. Cosmo Films Ltd - <ul><li>Exporter of BOPP film </li></ul><ul><li>Markets - US & Europe </li></ul><ul><li>Strength - Continuous innovation in high value added speciality films </li></ul><ul><li>Thermal Lamination, Capacitor Film, Breathable Film, Holography Film, Inkjet printable </li></ul><ul><li>synthetic paper, Slip stable film </li></ul><ul><li>Accredited with - </li></ul><ul><ul><li>ISO 9001 </li></ul></ul><ul><ul><li>American Institute of Baking </li></ul></ul><ul><ul><li>British retail consortium </li></ul></ul><ul><li>Captive Power plant – Economical and uninterrupted power supply </li></ul><ul><li>Implemented ERP for better supply chain management </li></ul>Targeting high end segment …
  30. 30. Machine Manufacturers – Rajoo Engg increased self sufficiency & exporting … <ul><li>Multi Layer Films - </li></ul><ul><ul><li>1 st indigenous 7-layer film plant </li></ul></ul><ul><ul><li>Modular co-extrusion die with 3-9 layer stacks </li></ul></ul><ul><li>Range of Machines available - </li></ul><ul><ul><li>Mono-layer & Multi-layer Film Plants </li></ul></ul><ul><ul><li>Sheet Lines </li></ul></ul><ul><ul><li>Pipe & Profile Lines </li></ul></ul><ul><ul><li>Thermoforming Lines </li></ul></ul>
  31. 31. Machine Manufacturers – Lohia Group <ul><li>High Output Tapeline - </li></ul><ul><ul><li>Capacity : 600–900 Kg/Hr </li></ul></ul><ul><ul><li>Innovative Feature </li></ul></ul><ul><ul><ul><li>Grooved feed barrier screws : For proper mixing </li></ul></ul></ul><ul><ul><ul><li>Melt Gear Pump : To minimise tape Thickness variation </li></ul></ul></ul>High capacity & consistent quality … <ul><li>Consistent & High Quality Looms - </li></ul><ul><ul><li>Electronic version of 8 & 10 Shuttle looms </li></ul></ul><ul><ul><li>Consistent high quality fabric for FIBC, Geotextiles & special </li></ul></ul><ul><ul><li>purpose fabric with 4-4.5 metre width </li></ul></ul>
  32. 32. Machine Manufacturers – Ferromatic Milacron <ul><li>All Electric Injection Molding Machine with 50-150T locking </li></ul><ul><li>Product Range: Medical components, Electronic & electrical parts </li></ul><ul><li>Advantages - </li></ul><ul><ul><li>Clean room, Compact space, Precision molding (consistency – 0.01%) </li></ul></ul><ul><ul><li>Power consumption – 30-50% lower </li></ul></ul>machines for wide segment … <ul><li>Two Platen Inj Molding Machine </li></ul><ul><li>Product Range: Large Automotive components & household articles </li></ul><ul><li>Features - </li></ul><ul><ul><li>Locking Capacity: 500T & above </li></ul></ul><ul><ul><li>High closing speed </li></ul></ul><ul><ul><li>15% higher opening daylight </li></ul></ul><ul><ul><li>Hydro-mechanical locking to minimise Oil requirement </li></ul></ul>
  33. 33. Future Outlook - India
  34. 34. <ul><li>Major PO exporter </li></ul><ul><li>2.9 mmtpa export surplus in 2011 </li></ul><ul><li>Petrochemical Industry becoming Globally competitive – </li></ul><ul><li>Going for Brown Field & Refinery Integrated capacities </li></ul><ul><li>Embracing catalytic PO consumption growth - </li></ul><ul><li>Forthcoming “National Petrochem policy” likely to address key issues </li></ul><ul><li>Potential Global Investment Center for Petrochem & downstream </li></ul><ul><li>Creation of PCPIR </li></ul><ul><li>Quantum jump in exports of Plastic Processed Products - </li></ul><ul><li>- Cluster development ‘SEZ’ with adequate infrastructure & level playing field </li></ul><ul><li>- Innovative, large Processors with competitive edge find exports attractive than dom market </li></ul><ul><li>- Encash opportunity after EU antidumping on PE bags with Chinese/Thai origin </li></ul>Future Outlook - India
  35. 35. Conclusion
  36. 36. Conclusion - <ul><li>Robust growth in Indian economy & favorable govt. policies to </li></ul><ul><li>boost PO consumption </li></ul><ul><li>Indian PO consumption likely to grow @ 10-12% in next 5 yrs, to </li></ul><ul><li>reach from 3.5 mmtpa in 2006 to 6.3 mmtpa in 2011 </li></ul><ul><li>India - an emerging Global PO player with huge export surplus </li></ul>
  37. 37. Ujjal De Vice President Head – Marketing & Business Development 1, Auckland Place, Haldia Petrochemicals Limited Kolkata – 700 017, India Phone – Direct +91-33-22831653 Cell No +91-9831090327 Thanks
  38. 38. Import Duty - % India is amongst lowest in Asia 15 Philippines 8.75 Thailand 5 India 10 Indonesia % Country ~ 9 30 China Malaysia
  39. 39. Tax on Plastic Products – % of product value Source – CPMA India - incl ED @ 16% & VAT @ 4-12.5% 17 China 10 Vietnam / Malaysia / Philippines / Indonesia / S Korea 21 – 30.86 India 5 Taiwan / Japan / Singapore Excise & ST, % Country 7 Thailand
  40. 40. India’s PO Import Duty - NOM Steep reduction …
  41. 41. Feedstock Cost Advantage – Middle East Cheapest & subsidised feedstock … 1.15 UAE (Abu Dhabi) 2.0 Bahrain 1.7 - 2.0 Qatar 1.0 - 2.0 Kuwait 0.80 Oman 0.75 Saudi Arabia Feedstock Ethane Cost USD/ mmBTU Country
  42. 42. CAGR ( FY06 - FY11) - 17.5 % Source: CrisInfac & Industry Info BOPP
  43. 43. CAGR ( FY06 - FY11) - 15 % Source: CrisInfac and Industry Info Raffia
  44. 44. CAGR ( FY06 - FY11) – 9.1 % Source: CrisInfac and Industry Info PPCP
  45. 45. CAGR ( FY06 - FY11) – 6.3 % Source: CrisInfac and Industry Info IM - HP
  46. 46. CAGR ( FY06 - FY11) – 11.3 % Source: CrisInfac and Industry Info IPP
  47. 47. CAGR ( FY06 - FY11) – 12.1 % Source: CrisInfac and Industry Info Fibre & Filament
  48. 48. Source: CrisInfac & Industry Info CAGR ( FY06 - FY11) - 6.3 % BLOW MOLDING
  49. 49. Source: CrisInfac & Industry Info CAGR ( FY06 - FY11) - 15.3 % PIPE
  50. 50. CAGR ( FY06 - FY11) - 16.9 % Source: CrisInfac and Industry Info HM Film
  51. 51. CAGR ( FY06 - FY11) - 9.4 % Source: CrisInfac and Industry Info Inj Molding
  52. 52. CAGR ( FY06 - FY11) - 5.3 % Source: CrisInfac and Industry Info RAFFIA
  53. 53. CAGR ( 06- 11) =13.6 % Source: CrisInfac & Industry Info Butene Film
  54. 54. CAGR ( FY06 - FY11) - 6.4 % Source: CrisInfac and Industry Info Wire & Cables
  55. 55. CAGR ( FY06 - FY11) - 11 % Roto Molding Source: CrisInfac and Industry Info
  56. 56. CAGR ( 06- 11) = 7.3 % Source: CrisInfac & Industry Info LL Injection & Master batch
  57. 57. CAGR ( 06- 11) = 16.4 % Source: CrisInfac & Industry Info Film – Oct / Metallocene

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