Mr K Govindarajan


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  • Mr K Govindarajan

    1. 1. Petrochemicals : Growth & Challenges IndiaChem 2006 Conference 9 th November 2006
    2. 2. Presentation Overview <ul><li>Economic Profile : India Snapshot </li></ul><ul><li>Opportunities and Growth of Indian Petrochemical Industry </li></ul><ul><li>Challenges in Indian Petrochemical Industry </li></ul><ul><li>IndianOil integration into petrochemicals </li></ul><ul><li>Conclusion </li></ul>
    3. 3. Economic Profile : India Snapshot
    4. 4. GDP based on PPP; Source : World Economic Outlook 2006 India: 4 th largest economy in world % of World GDP
    5. 5. GDP based on PPP; Source : World Economic Outlook 2006 India: 4 th largest economy in world Real GDP Growth
    6. 6. Opportunities and Growth of Indian Petrochemical Industry
    7. 7. Petrochemicals - Per capita consumption Per capita consumption in India is much lower than world average – Ample potential for growth Task Force Report on Petrochemicals, April 2003
    8. 8. Consumption of major Petrochemicals – last two decades CARG % Growth in consumption during last two decades has been significant and consistent Task Force Report on Petrochemicals, April 2003 CARG achieved : more than double the growth rate of GDP 15.3 16.4 Fibre Int. 13.0 14.0 Fibre 14.4 14.0 Polymer 1995-96 / 2001-02 1985-86 / 1995-96
    9. 9. Growth Potential for India <ul><li>Polymer consumption in developed countries are reaching a stagnation : growth areas in Asia. </li></ul><ul><li>Amongst fastest growing world economies. </li></ul><ul><li>Opening up of petrochemical sector for investment. </li></ul><ul><li>Large and growing domestic consumer market. </li></ul><ul><li>Investments in Infrastructure </li></ul><ul><li>Large working age population </li></ul><ul><li>Growing middle class households. </li></ul>
    10. 10. in KTs Polymer Demand Growth Potential: Snapshot CAGR, % CAGR: 13% CAGR: 15-16% Source: Information from Dept. of Petrochemicals, MOC&F New capacity additions required to meet the growing future demand of Polymers
    11. 11. Domestic Supply Demand Balance - Polyethylene Demand as per recent indication by DOC&P, MOC&F
    12. 12. Domestic Supply Demand Balance - Polypropylene Demand as per recent indication by DOC&P, MOC&F
    13. 13. Emerging opportunities – Fibres <ul><li>Global restructuring of textile and clothing trade post MFA. </li></ul><ul><li>International competitiveness in Quality, Service </li></ul><ul><li>India and China are best placed in entire clothing value chain- cost competitiveness </li></ul>
    14. 14. Domestic Demand projection Synthetic fibre CARG % Demand, KT Source: Task Force report on petrochemicals, April’03 While the Task Force has projected growth of around 6% in future, considering the opening up of the market and post MFA, it is expected that the growth in the fibre sector would be in double digits 5.6 6.4 Total 2.3 - 10.5 1.8 - 9.4 Fibre Int. 6.2 6.7 PSF 5.6 6.6 PFY 2006-07/ 2011-12 2000-01/ 2006-07
    15. 15. Domestic Supply Demand Balance - Fibres Based on Task Force report demand projection Figs. TMT
    16. 16. Domestic Supply Demand Balance – Para-xylene Source : Industry Fig’s in TMT Significant potential exists for addition of new PX capacity
    17. 17. Domestic Supply Demand Balance – Fibre Intermediates Based on Task Force report demand projection PTA MEG Figs. TMT
    18. 18. <ul><li>Indian petrochemical industry has: </li></ul><ul><ul><li>Large & growing domestic market </li></ul></ul><ul><ul><li>Low per capita consumption </li></ul></ul><ul><ul><li>Growing GDP growth </li></ul></ul><ul><ul><li>Expertise in specialized products </li></ul></ul><ul><ul><li>Large availability of trained manpower </li></ul></ul><ul><ul><li>Ability to adapt & assimilate new technology </li></ul></ul><ul><ul><li>Competent managerial & technical manpower </li></ul></ul><ul><ul><li>Emergence of petrochemical hubs </li></ul></ul>Petrochemicals Imperatives Indian petrochemical industry has grown & poised to grow further in near future Indian Petrochemicals on the move
    19. 19. Petroleum, Chemicals and Petrochemicals Investment region (PCPIRs) <ul><li>Government is working on PCPIRs to promote investment both domestic and international markets </li></ul><ul><li>These regions will have state-of-the art infrastructure and support to boost manufacturing, augment exports and generate employments. </li></ul><ul><li>Benefits of co-citing, networking and efficiency through common facilities </li></ul>
    20. 20. Drive for Growth <ul><li>Indian companies are willing for collaboration with international majors to add new capacities in India to explore the growing demand of products. </li></ul><ul><li>Government of India is also advocating and promoting new investments in the country. </li></ul>
    21. 21. Challenges in Indian Petrochemicals Industry
    22. 22. Key Challenges- Polymers <ul><li>Focus/thrust areas on development of newer applications/ value added products: </li></ul><ul><ul><li>Plasticulture: leading to modern farming resulting in improved productivity </li></ul></ul><ul><ul><li>Packaging: processed foods & consumer non-durables </li></ul></ul><ul><ul><li>Automotives: better performance plastics for automobiles & consumer durables </li></ul></ul>
    23. 23. Key Challenges- Polymers… <ul><li>Focus/thrust areas on development of newer applications/ value added products: </li></ul><ul><ul><li>Geo-textiles/Geo-synthesis: infrastructure development – gas piping, canal lining, inter-river linkages, roads (polymer modified Bitumen) etc. </li></ul></ul><ul><ul><li>Innovative products for telecom & IT sectors </li></ul></ul><ul><ul><li>Engineering polymers: electronics, telecom, automobiles, substitution of metals etc. </li></ul></ul><ul><ul><li>Substituting construction materials </li></ul></ul>
    24. 24. Key Challenges- Synthetic fibres <ul><li>Future growth areas: </li></ul><ul><ul><li>New varieties of polyester fibres & yarn </li></ul></ul><ul><ul><li>PP filament yarn </li></ul></ul><ul><ul><li>Acrylic fibres </li></ul></ul><ul><ul><li>Technical textiles including performance fibres </li></ul></ul>
    25. 25. Key Challenges- environmental aspects <ul><li>To achieve environmentally sustainable growth through: </li></ul><ul><ul><li>Innovative methods of plastic waste management </li></ul></ul><ul><ul><li>Recycling </li></ul></ul><ul><ul><li>Development of bio- & photo-degradable polymers </li></ul></ul><ul><li>Approach through: </li></ul><ul><ul><li>Setting up of dedicated plastic park to promote a cluster concept for applications & recycling, which would yield benefit to: </li></ul></ul><ul><ul><ul><li>Areas of technology development </li></ul></ul></ul><ul><ul><ul><li>Best practices </li></ul></ul></ul><ul><ul><ul><li>Market development </li></ul></ul></ul><ul><ul><ul><li>Recycling of wastes </li></ul></ul></ul>
    26. 26. IndianOil Integration into Petrochemicals
    27. 28. Conclusion
    28. 29. Conclusion <ul><li>World has become a single global market – Manufacturers to be highly competitive to survive </li></ul><ul><li>Opportunities are available for growth in Petrochemicals – to cater to India and global markets </li></ul><ul><li>India needs significant investment for addition of new capacities on petrochemicals </li></ul>
    29. 30. Thank You